9 essentials to ensure a successful real estate investment

Investing in real estate is somewhat similar to investing in stocks, as achieving profits from real estate investment is based on determining the value of the real estate that you intend to buy and then making a good guess as to the amount of profit resulting from these investments, whether through rent or sale (ownership).

However, investing in real estate requires a relatively long period of time with large capital. Therefore, the expected profits must be commensurate with the amount invested and the required time period.

Successful real estate investment:

1- Investment evaluation

That is, determining the expected return in the future. This step gives you a clear vision of the feasibility of this investment through current and future information about the real estate market and then analyzing it to estimate the required capital and the required time period.

2- Market movement

The real estate market, like any other market, is subject to continuous changes accompanied by fluctuations in prices. Therefore, market movement and current conditions are considered the main factor affecting investment decisions in terms of increase or decrease in real estate prices. Here, it is preferable to buy real estate when its price is low and then sell it when the demand for it increases.

3- Study the residential area

If you want to make a successful real estate investment, you have to be fully aware of the residential area in which you want to buy in terms of services provided, prices, and population. Some people advise investing in the place where you work or live, because you will be more aware of the advantages and disadvantages of the area.

4- Buy below market price

 When you buy a property and sell it in a short period, you should not buy the property at the market price. A successful investment lies in buying the property at a lower price than the market price so that you can resell it at a higher price to achieve the required profits.

5- Choosing the property

One of the most important factors that contribute to the success of the real estate investment experience is choosing a property that can continuously generate profits during the expected period. Buying a particular property may not be suitable for renting or owning during a certain period, which makes the period of non-utilization of the property long, and thus does not generate profits. So, make sure that the property is able to benefit from it by renting or owning within a short period.

6- Determine operating costs and expenses

They are the expenses that you incur with the first steps of real estate investment, such as the interest rate and fees associated with real estate financing, real estate appraisal and consulting fees, in addition to the fees that you pay after receiving the property such as insurance premiums, administrative fees, maintenance fees and maintenance costs of facilities, all of these costs reduce the net profits generated of investment.

7- Seize opportunities in new areas 

Investing in new or under construction residential areas is a good opportunity, because you may make profits when this area flourishes and the demand for it increases, as the purchase cost will be lower and then sold at high prices.

8- Experienced advice

 Do not forget to consult contractors and experts in the market, as you always need their services and advice, provided that you ensure the accuracy of the information and the quality of service to obtain the best investment results at the lowest possible price.

9- Rental prices decline

 If you intend to buy a property and then collect profits from the rent, you must evaluate this investment objectively based on the lowest expected rental price so that you do not reach a stage where the rental income decreases and then the net profits decrease unexpectedly.