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- April 1, 2023
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- 01 Min
Indicators Of A Profitable Real Estate Investment
There are countless real estate properties in Nigeria, and investing in them is the right choice. However, every investment aims to have profitable returns at the end of a set period of time. When investing in real estate, there are important factors to consider. These factors act as indicators pointing towards a viable real estate investment location, and these are discussed below;
LOCATION
This remains the most imperative thing in actual property investing success. Residential and commercial property assessments put into consideration the status of the community, proximity to amenities, accessibility to markets, ease of transportation and so on. Investors must take a mid-to-long-term standpoint on how the environment is expected to develop in the investment period. Factors attached to location include population growth and expansion, housing pricing and affordability, landlord-tenant laws, the standard of living and so on.
VALUE
Property valuation will not only help you to know the value of the property you’re investing in but also the worthy cost, possible income and sales as well. If after considering all these the property doesn’t hold much financial value, it would be better not to invest in such.
FUTURE PROSPECTS
Consider your reasons for wanting to invest in a property and see how well the considered property fits into your plans. Investors must understand the prospects of the property if it’s to be purchased for use, lease, or sale either on the short or long run.
ANTICIPATED CASH FLOW
Cash flow is the amount of cash left after expenses. A profitable return on investment relies upon having a high-quality money flow.
It is important to predict or calculate the upcoming earnings or income on the property. A positive cash flow indicates a viable investment while a negative cash flow is a turn-off for such.
NEW BUILDINGS VS EXISTING PROPERTIES
Modern amenities, attractive pricing, and openness to customization are usually advantages of new property construction but unexpected delays, the higher prices of development and the unknowns of a freshly developed location are all risks. Existing properties also come with advantages such as ease of access, existing facilities (such as utilities and landscaping), and regularly decreased prices.
You must find out the maintenance expenses that will go into the property and if there are any debts or unpaid fees, if it’s an existing property because these factors might cause a negative cash flow.
