Do’s and Don’ts of Real Estate Investments 1 I Colliers International Analyse your finances to make the correct assessment of the amount of money that you can afford to invest in real estate. Often this is ignored. Get a pre-approved loan especially if you are looking to finance part of the investment with a bank loan. Understand the process and restrictions in case you are buying property from the sale proceed of another property Overestimate the amount of money that you can set aside for investing in real estate. Overestimate the rental income that can be generated from the real estate asset (more so if considering netting off mortgage payments with rental income). Renting out a real estate asset may be time consuming and may not yield the anticipated income, as it is a function of the market which may change over time. Thoroughly research the property location, market conditions, developer’s background in terms of quality of previous projects, ability to deliver on time and resale value of past developments. Compare shortlisted projects with similar properties in the neighbourhood. If investing under construction residential property, it may be more prudent to invest in those projects that are in an early stage of construction. This is riskier than investing in ready property, but it may likely provide a higher capital appreciation. Try to save money by not hiring professionals, as any mistake can cost a lot in the long term. Do hire professionals to get the best advice, however, check the credentials of your real estate advisors. Avoid bank's criteria for approving property in case you are planning to take a home loan. Check with the developer about the status of all approvals and licenses, development scheme, layout plans and construction schedule. Calculate the total cost of the property by adding basic cost, brokerage fees, finance charges and all statutory costs such as stamp duty and registration. Select the payment plan from Down Payment, Flexi Payment, Construction Linked Plan and No EMI Plan, as to which is best suited to your financial plans and will yield the highest returns. Buy a property without proper legal due diligence. Focus heavily on financial costs; take other factors into consideration like locality, distance from major commercial and retail hubs etc. Assessment of Financing Available for Investment 1 Due Diligence and Financial Analysis 3 Identifying the Property 2