As an investor, you do not need to jump on the bandwagon due to the hype in the property market. It is never too late to invest in real estate. Whether you are buying your first or twentieth property, you should be concerned about the future prospects of a city not the past. And because real estate involves a substantial capital commitment, you need to first do a fundamental research. Ask probing questions to uncover the potential of the area and ascertain the reasons for rising demand to determine whether the momentum can be sustained or not. Before you buy any property, consider the following:
Rising average income
If an area's average income is rising faster than the state or regional average, property prices will be propelled upward. Strong demand may push price up even when average income in an area is unchanged or declining such as when retirees are attracted to an area. This can only be profitable in the short-run but not in the long-run.
Growing population
The influx of people into an area is an indication that property prices may rise. If an area can boast of a conducive environment to business, people will be attracted to it. The availability of ample job opportunities, proximity to an industrial estate, security, lower tax rate, friendly labour law and industrial harmony signal that property prices will rise in the future.
Proximity to a town witnessing a price hike
Real estate boom in a town or city may eventually spill over its borders into neighbouring towns. A redeveloped area witnesses a price hike that spreads to surrounding older towns.
Transportation expansion
Major transportation upgrade pulls in buyers and tenants. This drives property values up and reduces vacancies.
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