KEY THINGS TO KNOW BEFORE INVESTING IN REAL ESTATE
                     KEY THINGS TO KNOW BEFORE 
INVESTING IN REAL ESTATE
Property Location
• A key when considering property location is the mid-to-long-term view regarding 
how the area is expected to evolve over the investment period.
• Thoroughly review the ownership and intended usage of the immediate areas 
where you plan to invest.
Source: Investopedia 
Valuation of the Property
• Property valuation is important for financing during the purchase, listing price, 
investment analysis, insurance, and taxation they all depend on real estate 
valuation.
Source: Hcorealestates.com
Real estate valuation methods
• Sales comparison approach: Recent comparable sales of properties with similar 
characteristics
• Cost approach: The cost of the land and construction
• Income approach: Based on expected cash inflows suitable for rentals
Source: Moneycontrol
Investment Purpose
• Sales comparison approach: Recent comparable sales of properties with similar 
characteristics
• Cost approach: The cost of the land and construction
• Income approach: Based on expected cash inflows suitable for rentals
Source: Moneycontrol
Expected Cash Flows 
• Cash flow refers to how much money is left after expenses. Positive cash flow is key 
to a good rate of return on an investment property.
– Expected cash flow from rental income (inflation favors landlords for rental 
income)
– Expected increase in intrinsic value due to long-term price appreciation
Source: Investopedia 
Leverage
• Loans are convenient, but they may come at a big cost. You commit your future 
income to get utility today at the cost of interest spread across many years. 
• Be sure you understand how to handle loans of this nature and avoid major pitfalls.
Source: Real Estate Investment
New Construction vs. Existing Property
• New construction usually offers attractive pricing, the option to customize, and 
modern amenities. 
• Risks include delays, increased costs, and the unknowns of a newly developed 
neighborhood.
Source: Myupdate Studio
Indirect Investments in Real Estate
• Managing physical properties over a long-term horizon is not for everyone. 
Alternatives exist that allow you to invest in the real estate sector indirectly.
Source: The Financial Express
Credit Score
• Your credit score affects your ability to qualify for a mortgage, and it impacts the 
terms your lender offers. 
• If you have a higher credit score, you may get better terms which can add up to 
substantial savings over time.
Source: The Financial Express 
Overall Real Estate Market
• As with other types of investments, it's good to buy low and sell high. Real estate 
markets fluctuate, and it pays to be aware of trends. 
• It's also important to pay attention to mortgage rates so you can lower your 
financing costs, if possible.
Source: Investopedia