What does it mean to invest in the Real Estate Industry?
This journey doesn’t come with a map, and the path until your first investment has some homework in it. However, there are things you can do to ensure your best chances of success!
Let’s start by saying that investing is about purchasing a property that will eventually produce an income of sorts.
Before getting ahead of ourselves though, experts globally agree that before investing in anything, a well-structured plan is a must!
Here are 5 tips for you if you are planning for future investments in Cyprus:
Tip 1 – What Type of an Investor Are You?
Buy-and-hold investing is a classic example of real estate investment. In this case, you buy up a property and rent it out for consistent monthly income. While many people think that renting out a property is the only example of a real estate investor, it is actually just one type.
Another type of real estate investing is the fix-and-flip type. In this scenario, you will find a real estate deal that’s undervalued for the market. Then, fix it up and market it for resale at a much higher price. Once the buyer is found, you will get to keep the difference between the initial investment and the final sale price as profit.
Then there is the buy and hold long-term strategy, where you will purchase a property and rent it out to benefit from the passive income.
Eventually, you can sell the asset for more money, considering that real estate generally increases in value over the years.
Tip 2 – Pay Attention to The Trends
If you are looking to invest in the Cyprus real estate industry it is important to stay up to date with any new developments around the town or area of interest.
When you decide to buy in an up-and-coming neighbourhood that has not yet reached its peak, you set yourself up for rewards later. When neighbourhood values increase, your return of an investment will go up just as rapidly. The biggest sign of up-and-coming areas is the appearance of new homes and businesses in the area. The neighbourhood in which you buy will determine the types of tenants or buyers your property attracts. It is also worth noting that newly flipped homes are a sign that buyers who don’t want to take on repairs or renovation will be drawn to the stylish renovated homes.
Equally important are young people. These kinds of move-ins from a younger generation is often considered to be the creative tastemakers who determine which locations will be the upcoming trending areas of a city.
Tip 3 – Understand the Market
Understanding the real estate market can help you determine your negotiating and purchasing power from the beginning. When you’re in the process of selling your assets this knowledge will help you price your home and anticipate your offers and selling timeline.
To become an effective real estate investor you need to acquire an in-depth knowledge of your selected markets. For example, a good practice is to narrow in on a particular geographic region and focus on residential versus commercial properties.
This will help you determine important facts about the market you are about to join:
- Price Fluctuations
- Market Growth
- Commercialization of the Area
- The Desirability of the Area
Keeping up-to-date on current trends, including any changes in consumer spending habits, and most importantly mortgage rates are key factors to evaluate if the area is worth investing in.
All of these factors can help you to predict when trends may change, creating potential and critical opportunities.
Tip 4 – Invest in Quality
Once a project is completed, its market price or return of investment depends on the quality of the product, its location, and its specifications.
An unimpressive design may become irrelevant in a few years and not fetch a good resale value. So, an investor needs to look at the functional aspects of the design of each project they invest in to reduce the risk of the property becoming obsolete in the future.
- Well-thought designs
- Efficiently planned floor plans
- Quality Materials of the Construction
- Interior Materials
- Amenities of the Building and/or Area
These are some important factors that will help solidify your future investment and help it to be profitable long term or even short-term.
Tip 5 – Find a property that Converts
Commercial properties often provide worthwhile cash flow streams when rented out; however, the appeal of commercial real estate does not stop there. Commercial property can be used in a variety of ways depending on the zoning regulations of the property. Converting commercial property to residential can be a highly lucrative investment strategy.
In the right area, commercial properties can be perfect candidates for new residential housing options. In your search make sure to find properties in Cyprus that are eligible for conversion from commercial to residential to maximise that property’s potential.
Commercial properties are just one side of the coin though. Finding a lucrative investment in the residential property market can be sometimes a daunting task, but if you do find the right opportunity it can prove to be even more rewarding.
Looking For More Tips?
Sometimes, it can be very difficult to make the right decision when investing. If you are willing to make it through, real estate can prove to be the most resourceful investment you’ve made.
However, all that time and effort can be bypassed when being advised by the right property consultant. The right individual will find the investment opportunity you need in no time. Yet, creating a plan remains an essential part of the process. This can be taken care of by one of our highly experienced and trained Property Consultants!
Make sure to visit one of our CENTURY 21 offices in Limassol, Paphos, or Larnaca and we’ll have a conversation about how we can help you invest the right way!