8 PRINCIPLES OF EFFECTIVE AND SAFE REAL ESTATE INVESTMENT

Real estate investment principles
Real estate investment principles
Real estate investment principles

The most attractive and profitable investment channel that many people are interested in is real estate. How to invest in real estate profitably and minimize risks? There are 8 golden principles to pay attention to:

Principle 1: Pay attention to the location

The location is a crucial factor that significantly influences the project’s future development. The profit potential due to the location factor is higher, and the value of real estate is greater. Projects located in city centers or key economic areas will have a higher value than similar properties in suburban areas.

Projects along main roads or important traffic intersections also have higher value compared to properties in other locations. Evaluating the location advantage of real estate is extremely important, especially during the price assessment.

Principle 2: Choose the right time to survey the project

Many people have the habit of visiting projects during the day. However, the most accurate time to survey the project is in the late afternoon or evening around 8 pm – 9 pm when buildings and residential areas are illuminated, as this is when the activities and lifestyle of residents are most clearly reflected.

Principle 3: Pay attention to the price of real estate

Choose real estate that suits your financial capability. Use financial leverage, meaning borrow additional money for investment. However, it is advisable to borrow only below 50% of the real estate value to avoid the burden of future interest or the higher risk of capital shortfall, leading to selling real estate at a loss.

Principle 4: Ensure the project’s high liquidity

Whether you plan to invest in real estate in the city center or the suburbs, an important criterion for high profitability is the liquidity of the project. Liquidity is simply the ability to convert into cash. Ask yourself some questions to assess the “liquidity of the project”: “Can you sell it immediately after buying?” or “If you need money now and sell it at a slightly lower price, is there an immediate buyer?”

Principle 5: Clear legal factors

Investing in a project with clear legal aspects helps buyers avoid transaction risks and enhances the property’s liquidity. Buying real estate from reputable developers ensures quality products, timely completion of infrastructure, and transparent legal matters. Currently, developers focus on disclosing legal information and bank guarantees for each project to build trust with customers.

Principle 6: Coordinated infrastructure and transportation

Infrastructure, facilities, and transportation networks are crucial factors to consider for future high-profit real estate. Projects located at key traffic intersections with easy connectivity will bring significant value to the area’s infrastructure, elevating real estate projects to new heights.

Principle 7: Geographic factors

Real estate investment requires careful calculation to ensure that the land acquisition cost is higher than the construction cost. Areas where land value is higher than construction cost indicate rapid urbanization in the future. Conversely, projects with higher construction costs suggest a slower urbanization process, resulting in less profitable investments.

Principle 8: Surrounding community

The living space and the surrounding community have a significant impact on the quality of life and future investment potential, especially for rental purposes. Two questions to address this issue are: “Who are your neighbors if you buy this project, and is the community cultured?” This will play a significant role in determining whether your project is truly attractive for business.