Considerations for Investors and End-users in Real Estate

Are you planning to invest in a real estate asset or buy a property for end-use? Whatever your decision may be, it’s crucial to make an informed choice and set clear objectives before putting your hard-earned money into the realty market. Confused about where to start? Don’t worry; 99acres is here to help! 

In this guide, we’ll walk you through some essential aspects that you should consider before investing your funds into a property deal. Whether you’re looking to buy a house for yourself or invest in a property, our tips will come in handy. So, let’s dive in and explore the differences between investing and end-use and what factors you should check before making a decision.

Understanding the difference between investor and end-user

Real estate investment can be bifurcated into two major categories – investment and end-use. The objective of an end-user is significantly different from that of an investor. Hence, the factors governing the decision-making process also vary considerably in both scenarios. An individual who purchases a property with the intent of residing is commonly referred to as an end-user. On the other hand, an investor acquires a property with the purpose of earning a return on investment.

Key considerations while choosing between investing and end-use

Location

End-users: When considering owning a home to live in soon or in the future, one of the most crucial factors to consider is location. It is essential to ensure that the area is conveniently situated and can cater to all of your needs. You should verify that it has access to critical facilities such as schools, hospitals, and malls while being well-connected to other parts of the city. Considering the neighborhood and determining if it aligns with your lifestyle preferences is also essential. Additionally, even if you are looking at a suburban area where you do not plan on relocating immediately, it is essential to consider factors such as the political stability of the region, infrastructure plans proposed by the municipal body and central/state governments in the area, as well as major residential projects in the pipeline. By doing this, you can better assess the livability index of the locality.

Investors: When considering the purchase of a property for investment purposes, it is crucial to conduct thorough research on the location beforehand. Real estate experts recommend exploring newly emerging localities situated on the city’s outskirts or suburbs, as they offer the potential for healthy returns on investment (ROI). Such developing areas may not yet have all the necessary social and physical amenities in place, but they feature a lower entry price and, thus, better opportunities for price appreciation. It is, however, essential to determine the desired investment timeframe accurately. For instance, if the investment period is around ten years, it is advisable to invest in a locality that is still in its early stages of development. On the other hand, if the investment period is between three to five years, it is preferable to opt for a location that has shown some development and price appreciation but has not yet reached its peak.

If the primary goal is to earn rental yield from the investment, other factors, such as the proximity to an economic hub and the livability of the area, should also be considered.

Construction Status

End-users: It’s important to know what stage the house you’re buying is in. It decides how much you’ll be paying in EMIs every month if you’re taking a home loan. If you’re already renting a place, it might be better to buy a house that’s ready to move in or almost ready. This way you won’t have to pay rent and EMIs together. But if you decide to wait until the house is almost ready, it’ll cost you more than if you buy it when it’s first launched. So, think about the pros and cons before making a decision.

Investors: If you want to make a quick buck, getting in on the pre-launch or launch phase is a good idea. You’ll pay less upfront, but there’s more risk involved because you can’t be sure it’ll be finished on time. If you want to sell early, you can do it when the building is only half done and use that cash to invest in another property. But if you’re willing to wait a bit longer, you’ll get the most bang for your buck by selling it when it’s finished. If you don’t want to wait too long, you can invest when it’s almost done. It’ll cost you more, but you can rent it out in less than a year and start earning some cash.

Infrastructure

End-users: If you’re planning to buy a property for yourself, make sure the location has good infrastructure. You should check for things like good roads, popular schools, hospitals, parks, and other fun places around it. Also, try to find a place near important transportation hubs like airports, metros, railway stations, and bus stops. This way, you’ll have an easier time getting around and living your life happily.

Investors: Sometimes, the suburbs and outskirts of a city aren’t the best in terms of infrastructure. But it’s important to check if the locality is part of the city’s master plan. Also, it’s good to know if the government has any upcoming projects that could make the area more attractive and bring in more investment and rental growth.

Type of property

End-users: Only you can determine which type of property would best suit your family’s needs, whether it’s a plot, house, villa, or apartment. So, when making your purchase decision, make sure you consider your family’s requirements.

Investors: If you want to make some good money on your investment, you gotta pick a property type and configuration that people want. To do that, you’ll have to talk to many property consultants and do some research online. Check out real estate communities and forums to see what people are looking for. Every city has its own favorite type of property – for example, in big cities like 2BHK and 3BHK, people love society apartments, while in smaller towns, people prefer individual houses. 

Of course, there are many other things to consider when you’re making this kind of investment. So, it’s best to do some research on your own or get advice from a real estate expert before making your final decision.