5 Must-Know Tips for Buying Properties to Resell

5 Must-Know Tips for Buying Properties to Resell - read article for successful investment

Investing in a real estate property is a widely accepted way to earn passive money. There are two types of income from real estate investment, Rental Income and Capital Gain. Rental Income is the monthly or periodic income in exchange for use of the property and Capital Gain is the gain on the sale of the property. While rental income is only applicable to ready to use properties such as house, apartment, shop, office, etc, capital gain is applicable to all types of real estate properties including plots and even files of plots or shops. Capital Gain is the most lucrative form of passive income in the real estate industry as it reaps the benefit from the rising prices. The article has some best tips that can be helpful if you intend to buy properties to resell.

What are the Top 5 Tips for Buying Properties to Resell?

If you also intend to earn capital gain by investing in a real estate property, this article is intended to educate you about the things that you should consider. Let’s get a grip on tips that nobody will tell you about buying properties for capital gain.

related: Is Commercial Real Estate Property a Better Investment than a Residential one?

1. Location of Property

Location is one of the key tips for buying properties to resell, as it plays a vital role in determining market demand and value. An ideally located property will get more potential buyers; this increases the supplier power of the seller and hence, yields a good selling price.

So, what is an ideal location? The best location (of a property) would easily be accessible from nearby landmarks and housing societies. Moreover, it should offer all kinds of necessary amenities for a comfortable lifestyle at a reasonable distance. Hence, always prioritize a property with a more favorable location. 

2. Excess Cash

When you buy a property with the intent to resell it for profit, you should be financially prepared for unforeseen situations (such as not finding the right buyer in time which means delayed recovery of invested money). In short, keep a long-term investment horizon in mind for capital gains in the real estate market. Occasionally, you may be able to sell your property at a very lucrative price in merely a few months. However, the general time period is much longer to get a comfortable profit. 

Therefore, in general, make sure that you have sufficient money in your bank account or some other steady source of money before you buy the property. Because you may not find a buyer immediately and if you are only relying on the profit you are expecting to earn, then waiting for the right buyer can be harder if you do not have excess money.

3. Maintenance Cost

For the time period that the property is in your possession, you will have to bear the cost of managing the property, pay relevant taxes or any additional charges levied by the society. This is another vital reason that you should have surplus money before you buy a property for capital gain. Selling your property under the pressure to pay outstanding dues will lead to a distress sale and a smaller profit. 

4. Is Investing in Multiple Properties a Good idea?

Diversification is the key to investment risk management. If you can buy more than one property, try to buy different types of properties to diversify. For example, instead of buying two apartments, you should buy an apartment and a shop; instead of buying two residential plots, buy one residential and one commercial plot. 

Related: 5 tips before selling a house

5. Be Patient!

Don’t rush to sell the property if you’re unable to find the right buyer. You might not choose the buyer wisely and end up selling it for a lesser profit if your only focus is to sell the property as fast as possible. 

In the meantime, you can fix the flaws of the property, this will increase the market value of the property. You can maximize the profit by doing minor fixes in your property. Even if your property is a plot, you can get a better deal by waiting for the right time!

Conclusion

You must be clear about a few things when you are buying a property to earn capital gain by reselling it for profit as discussed above. Moreover, you should be aware of the legal status and condition of the property. Make sure that you have enough money for sustenance of the property before you reach the right time to sell. Do not rush the selling process to make an uninformed decision. Instead, consider the valuable tips for buying Properties to resell and size up the possibilities before investing.

Follow us on Instagram and Facebook for the latest real estate updates!

Related Posts

Popular Projects

Compare listings

Compare
Register as an Agent

Fill the simple form below to register yourself as a “Real Estate Agent” and get featured for this project! For Free!

You will be contacted by our representative shortly.