If you are thinking about purchasing a house or an apartment, or if you already own one, then factor in the following to ensure that you get a high Return On Investment (ROL) when you decide to resell it. ROL is calculated by subtracting the expenses incurred (including purchasing cost, renovation cost, real estate agent commission and taxes) from the overall resale cost.
* Buy a hassle-free property. While houses and apartments with legal issues (such as outstanding loans, taxes and bills) or a less than desirable condition can sometimes be purchased at a much lower price than the prevailing market rate, their lower cost is not a good enough reason to purchase them. This is because you will end up paying more in order to resolve the outstanding debts and/or legal issues pertaining to the property, as well as to renovated it, all of which will lower your ROL considerably.
* Get expert advice . When purchasing a property, make sure you ask three to four real estate agent to estimate what its resale value will be after two to three years. Purchase the property only if its price is expected to increase by at least 40%
* Location, location, location. Ensure that amenities and recreational avenues such as shopping malls, parks, educational institutes and major thoroughfares are within a two-kilometre range. This will increase the ROL by eight to 10%. Other factors that ensure a high ROL include access to amenities such as security, regular water supply, and a well maintained neighborhood.
* Renovate. Renovations, especially those pertaining to the bathrooms and kitchens, as well as the addition of storage space, extra rooms, porches and patios, increase the ROL by nearly seven to 15%. Similarly, the incorporation of ‘green’ features (such as solar panels, rainwater harvesting and water recycling systems, and insulated rooms that maintain optimal internal temperatures) ensures a five to eight percent increase in the ROL.
However, avoid the installation of elaborate features suich as swimming pools and fountains; they are difficult to maintain and reduce the ROI.
By Uzma Nawaz