Investing in Real Estate: When to Stay, When to Exit

As the real estate market is recovering and the property scenario is coming back to its normal phase, investors are showing a renewed interest in putting their money into this sector. The property market of India is counted among the most lucrative ones in the world. Steady rise in property values are attracting more investors.Investing in Real Estate: When to Stay, When to Exit

However, as an investor, you must be cautious about real estate investment. Experts suggest that there are two types of investors- those who wants regular returns and those who want capital gains. If you belong to the first category, you would be inclined towards staying invested for a longer span, putting the home on rent and enjoying regular rental returns. Whereas, the second category investors are more inclined towards studying the market situation, speculating and selling the property when its value is at peak in order to enjoy heavy capital gains.

If you belong to the second category, you might be confused about when to hold the property and when is the right time to exit. Real estate experts are of opinion that property investment should necessarily be a long term bet. One should wait for at least three to five years to sell the property in order to enjoy good returns on investment. The ‘holding period’ for an investment property also depends on the market scenario. According to records, those who have enjoyed awesome returns are the ones who sold between 5-7 years of the property’s lifecycle.

Waiting for the highest possible profit can make you wait for a lifetime. A good way to enjoy returns is to invest in new projects in the pre-launch or new-launch stage and sell it when it is close to completion. One to two years after possession is also a good time to get comparatively good returns.

As an investor, it becomes really important for you to take important points into consideration such as the ‘holding time’ of the property, value appreciation and the real estate market in general.

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