Retirement Planning with Real Estate

If you're fed up with meager returns you get on mutual funds, low interest rates on long term fixed deposits from banks, and uncertainty from stock markets, you might consider turning to real estate to supplement your retirement income. But it's not for everyone. Consider the following tips to see if real estate can help you construct a good retirement portfolio.

Goals: The days of making a quick buck with buying and selling in real estate are gone. Real estate is the best performing asset class in south asia, they can provide a steady income and massive capital gains if your investments are planned properly. You should be prepared to do lot of research to secure a property in a good location that can have potential appreciation. You'll have to crunch your financial numbers to figure out if a property will work out. A decision to invest can have an impact on your lifestyle and cash outflows.

Neighborhood:Location, location and location are said to be the three important factors of real estate. If you are planning to buy real estate, you need to know what you're getting into. Look out for planned developments like ring roads, shopping malls and office spaces. Research on trends on home occupancy and rentals, this can give you a decent idea on demand and rentals.

Invest Local: I've seen my friends living in Bangalore and went on to buy land in Poonamalle, Chennai. There was a rumor of an airport near the Nokia factory and land was sold like hot cakes. Now there aren't any takers for the same land and people are sitting on big losses. There's no suburb that you're familiar with than your own. Plan to invest local. The farther you are from your property, the harder it gets to manage or monitor them.

Buy Small: Buying huge land can get you massive returns, the downside being your money is locked and the risk is quite high. Plan to start investing in one bedroom condominiums as they are easy to rent,maintain or liquidate them when required.

Soft Launches: Builders have come out with new strategies to raise interest free capital, they soft launch a project for potential investors lock in prices. This helps the buyer by reducing massive cash outflow and locking the price at early stages of the project.

If your idea still seems solid of getting into real estate, the next step is to research and jump on.