Property is a long term investment that usually always goes up in value over a period of time. It is taken for granted that the value of any property will improve and grow as the years pile on. But this is not true. There are many properties whose values shrink and fall. Take the example of a town that loses a big corporate company and there are no jobs and a lot of people are moving away and once thriving areas are now ghost towns. Obviously the property rates in such towns and cities will plummet. But for the most part, property is a very good and safe bet for investors who do not need ready cash and just want a steady and reliable growth in the value of their tied-up monies.
This is one of the major views on property investing. If you are in possession of money that you do not need, buy property when the sales prices are low and sit on it until the market shifts and sales prices are on the higher side. If you have bigger goals, you could consider staging / improving the property ensuring you make a bigger profit when you sell. Becoming a landlord is another option whereby you rent or lease out your property thus making more profit and you wait for the market to shift in your favour thus eventually making big money overall.
One has to remember that there are different viewpoints on property investments and as a realtor one needs to know all the different theories in order for us to be able to advise our clients in a responsible manner. The same exact house and property located in one town is worth one price but the same type of property in another town will be worth less or more. Still as a long time investor there are certain things to consider before we suggest to our investors that they buy a certain property.
Investing is guessing on the future. Can you predict that a certain property will be in high demand after a few years time? Why do you think so? What are the stats and facts and the criteria for suggesting that this property will be worth more in a few years time. Also there is the specific value that a property may hold just for a single client. This boils down to properly understanding the needs of your client and his / her mindset. A particular property may have certain special features that may hold great value to your client immediately in the future despite what the projections in the property values in the are are pointing to.
A simple example is Mumbai in the year 2018. There is large scale Metro & Underground Metro construction work happening all over the city. Depending on a person’s current age and outlook, he or she may devalue and degrade the value of a property which is close to an upcoming Metro station. An older person may feel that life has become a living nightmare what with the constant digging, noise and dust pollution, clogged roads and traffic jams etc. This person may feel that considering that there will be no respite for the next 5 years or more from the above elements, the home has lost it’s erstwhile charm and he / she may want to sell out at whatever price he / she can get and move away to a more peaceful location. On the other hand, a younger person or a young couple with small kids might look at the rosier picture once the Metro construction is finished and imagine how good and convenient life will become five years from now when the Metro halts at a station right outside their doorstep! Obviously the latter will hold the properly in high value compared to the elderly couple. The property is still only square footage, brick and mortar, wood, nails, screws and bolts, concrete, wiring, plumbing pipes, paint etc. The property is still the same. It’s the perception in value in the eyes of the beholder that increases or decreases 🙂
Chloe is a real estate advisor and investment advisor with Gupta & Sen Associates. With a combined experience of over 15 years in varied industries, she is a vocal and knowledgeable ally for buyers and investors who want to make informed choices when buying a property in India. With superlative communication and marketing skills, Chloe handles our PR, real estate marketing strategy and client management.