5 Essential Tips for Buying an Investment Property

Written by: Tasnia Tajin

Real estate is not just about buying and selling homes, it is in fact, a great investment sector as it offers stability unlike other investment sectors such as share markets, bonds etc. Although initially you may be skeptical to be a real estate investor since it is such a high-end product, you can navigate the process easily with a little research and expert help.  Before you get down to business, here are 5 essential tips for novice real estate investors in Bangladesh to consider:

Financial preparation

If you are thinking of buying an investment property, you need to check out loan offers and current interest rates in the early stage of property hunting to get the best deal. Perhaps the biggest tax break property owners enjoy is a deduction from mortgage interest; as a result, the income tax liability would be substantially reduced when you purchase an apartment with loan.

Rent or resell?

When investing in real estate properties in Bangladesh, you need to decide whether you want to rent it or resell it. You should consider the expected ROI and tax implications in both the cases. If you choose to rent apartment unit, you can earn more ROI if you have more than one. It will give you a steady cash flow throughout the years. Rental properties, however, also require long term property management services. On the other hand, if you want to resell, and if you can do so quickly, you can earn a faster ROI.

Survey the real estate market

Before investing in real estate market, it is wise to survey current market scenarios. In Bangladesh, real estate market is relatively stagnant compared to other industries. Compare current pricing of similar properties and go beyond the pricing, such as look at apartment features, amenities etc. You should definitely check out real estate company’s background to ensure you are investing in a trustworthy company.

Real estate experts suggest that if you choose to resell your apartment, it is important to survey current market conditions. If the market seems slow, hold onto the property until the property value appreciates.

Location

A location is undoubtedly a primary factor for real estate even when you are buying a property for investment purpose. The location will determine your rental income. For instance, elite areas like Gulshan, Banani, Dhanmondi will definitely give you higher ROI than rental properties in areas, such as Mirpur, Kalabagan, Banasree etc. The same goes for reselling a property as the price per square footage area is higher in highly developed areas.

Repairs and other costs

Whether you are renting your property or reselling, you need to factor in repair and other costs. For instance, for reselling a used apartment, you need to consider repair and renovation costs to get a higher ROI.  Usually, cosmetic renovations cost less than structural and electrical repairs. If you cannot sell the property fast enough, you also need to consider property tax, utility bills, etc. On the other hand, if you plan to rent, then it is smart to avoid renovation works that are too costly.

Although investing in real estate may feel daunting to you at first, it can be a lucrative investment choice. To start looking for investment properties in Dhaka, Chittagong and Comilla, you can browse through bti properties for sale.