While property investment promises great returns on investment globally several factors must be taken into account in order to realize the full potential of the said investment.
Some of the investment tips include;
Understand your needs
For a first time investor or any other investor for that matter, the million-dollar question is always one, ‘what do I want to achieve? Some investors may be tired of paying rent and are looking for an appropriate investment for a home development; others may be looking for an investment opportunity or land banking while others yet may be looking for land to subdivide. All these investors will be looking for different ‘things’ in their quest to invest.
The basic rule here is to analyze your needs critically and settle on the best available investment opportunity that suits your needs.
Be a visionary investor
Over a couple of years, I have been in the real estate business I have met different types of investors with different attributes and tastes. One of the most distinct investor traits that I have come to appreciate is the need to see beyond today as you make your investment.
Are you able to see the future now? How will this particular area be in the next three years? Will the changes then be a disadvantage or an advantage to your investment if you go ahead and invest? What will be the impact of the change to your investment?
“Before this place got to the current prices in millions of shillings, I advised a relative not to buy at Kshs 35,000 six years down the line” Those were the exact words a client used to describe what had happened in the course of their property investment journey.
If you have the financial muscle to invest right within the town center, go ahead and invest, but if you do not have the money to do it right now, identify an alternative location that will appreciate over the years and invest there. Once upon a time, your local towns as you know it today was once a grazing field!
Property investment involves a lot of risks like a fraud among others. Proper due diligence will save you lots of headache and loss.
That said, however, high returns attract high risk. Take calculated, well-informed risks whenever you are investing in the real estate business.
Don’t procrastinate every venture involves risk. You are better off starting today than tomorrow.
Plan out your finances and Keep it simple.
Early this year I was disposing an apartment block to a willing client. After the usual processes, she approached her bank to finance her deal to acquire the apartment. The bank after checking her banking records advised her to go ahead; pay the down payment, get into a sale agreement and have a valuation done after which the bank would take up the process and pay the difference. She did.
Thereafter the bank blatantly refused to finance her deal saying that the client’s financial status would not allow them to finance her deal. Unbelievable, isn’t it? I am sure you are thinking that maybe you would sue them or take remedial measures to recover your loss. That’s true. But do you realize that you won’t get back your wasted time and every other non-financial resource that you had invested?
Have you not heard of people whose properties got auctioned because they no longer could meet the bank’s loan repayment installments? Is it worth losing your health (to high blood pressure other stress-related diseases) to gain material wealth?
Keep it simple. Understand and plan out your finances well to avoid or minimize losses. Know what you can afford comfortably and to what extent a financial institution can finance your property investment.
Having all that in mind will help you in making wise investments and remember that real estate investment remains the least affected investment in terms of market fluctuations and yet the best in terms of returns on investment.
By JK Mwangi,
Sales ManagerEnjoy Properties