To be successful in real estate investment, there’s one absolute essential. You need to make informed, intelligent decisions, and not let instinct or your heart overpower your mind.
This is a short guide to the simple process of making the right decisions, and the steps you need to follow. It’s based on the principles practised worldwide, buyers experience in selling and renting to buying a family home and my own experience as a very successful real estate professional in Dubai.
Step 1: Knowing what you want
Establish your budget. Whether you are buying with mortgage or cash, for living in or for renting as investment purposes, your purchase should be comfortably affordable.
Step 2: List your key essentials
List your key essentials - Number of bedrooms, proximity to schools, work, shops, countryside which you are not ready to compromise. Think of your family life cycle and its needs. For instance, what sort of property suits you the best, ticking off those essentials? Is it the Apartment, Ready Home or Off plan?
Step 3: Discover more about your location
Look at an area you know well already, or do your homework thoroughly on the location. What are your objectives? Your time frame for moving in, your plan for reselling? Find a Knowledge Partner who knows real estate, and the area you’re looking in, well. A professional who understands contracts, tax etc. to guide you in making sound decisions.
Step 4: Research – Gathering data
When you have established those criteria go out and research the market, making a list of options which best suit you. Ask questions, visit the site, examine the local market and gather essential data to create a fact sheet for each options. A) Median price per square ft, number and total value of sales at the location and current and future property supply. B) Study the price per ft and overall property cost for the last 5 transactions at the location. C) Compare the price being quoted with that data to establish whether the offer represents good value. You can find all this sort of data online. This will guide you to identify the best investment options. I call this process CAAD: Comparison, Analysis, Assessment, Decision. The next step is to go into the fine detail of each property to create a more accurate fact sheet for each property to make a final decision.
Step 5: Know the Market Trends – when to buy
The property market fluctuates and buying (or selling) at the right time can make a huge difference to the price you pay and the return on your investment. If you buy in a boom phase of the market cycle, you will end-up paying more: the right time to buy is when it is depressed, when sellers will be making better price offers. But you must always follow the CAAD process.
Step 5- Finalising the deal
Before you complete any deal, make sure that the contract covers everything from any maintenance, repairs etc to the exchange of keys. ALWAYS consult your Knowledge Partner at every stage and get them to negotiate the deal for you. Before completion, also consult a property law and tax expert etc: they are specialists who will cover everything. Finally, when you have arrived at ‘best price’ don’t hesitate – make the purchase or you might lose it.
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