Stowe Real Estate: Important Considerations When You Invest in Real Estate

Tuesday, January 6, 2015, 3:00 AM | Leave Comment

When compared with other kinds of investments, the real estate involves some favourable elements in the risk verses reward profiles, but the liquidity may be low because of the ease of both entry and exit. Before you venture into this kind of investment, you would want to look at a few things.

A Stowe real estate agent might help you make the right decision in determining the property you want.

Among the most important considerations are;

  • Location of property

    You cannot overlook this one factor when investing in real estate property.While it has been an age-old punch line, it is certainly among the most important factors.

    If you do not consider the location, you could get a property that is located within the wrong area, and it may affect your profitability in investment.

    Things such as the peaceful conforming areas, amenities, scenic views, and neighbourhood will help in residential property valuations while for the commercial property valuations, you expect to look at things like warehouses, markets, transport hubs, and tax exempt areas.

  • Valuation of property

    Another factor you will want to examine before you invest in real estate property is the valuation.

    A number of aspects will depend on the real estate valuation such as the financing during purchase, the listing price when selling a home, the investment analysis, as well as taxation and insurance premium.

    If you have proper valuation done, it will help in other process like financing, determining the sale price, and in applying for insurance policy.

  • Expected cash flows

    The purpose of investment will help determine the cash flows or profits you expect from your property.

    However, due to the low liquidity coupled with high value investment in this market, if you do have the right investment horizon, you may end up with a property that does not bring the kind of profits you anticipated.

Lack of clarity on investment purpose could result to unexpected financial distress as may happen when the property has a mortgage and does not yield substantial amount to pay for the loan.

You need to establish whether you are purchasing for self-use, lease, or sell in order to understand how much profit you may get.

The cash flow may be determined by things such as value appreciation, mortgage loans, and renovation before you sell, tax benefits from depreciation, and inflation.

When you examine these and other factors, you may be able to determine the kind of real estate property that you should own.

It also helps you realize the kind of cash flows and financial benefits you intent to get from the property without being unrealistic.

This way, you have a property, which can bring returns whether through sale, rental, or lease arrangement.

If you are seeking for new construction properties, these present attractive pricing and you can have customization in designs as well as clarity in documentation like titles.

An existing property will need a thorough check on its documentation, the planning, designs, and compliance with legal matters such as survey and designs.

Author bio

Frank Bruce has worked in real estate consulting firms and often contributes ideas on real estate investment.

Throw us a like at

Post a Comment on Content of the Article


This is not a billboard for your advertisement. Make comments on the content else your comments would be deleted promptly.

CommentLuv badge