Today, investing in real estate is a complex task that heats up information that not every simple person knows how to do. If you want to make a high-quality and correct real estate investment, in the following article you will get a glimpse into the field and also a few tips that can make your investment the most successful investment you will make in your entire life.
How to Invest in Real Estate
These are the most important rules when you approach real estate investment:
- Look for unicorn investments: The unique investments – the investments have a lower present value than the value that can be achieved. In other words, buy real estate that requires a little renovation, invest a little in it, and sell it for large profits. Another way to earn a property at a relatively small price is to look for houses that are about to be demolished and take advantage of the opportunity.
- Resource allocations: Be aware of your costs throughout the purchase or renovation process. If you are buying a house – be aware of the increases in the construction input index because it can go up and down without a glass ceiling. The real estate market is a market that can change every month, so always keep in mind that every transaction will cost you a little more than you originally thought. Another tip for a beginner real estate developer, pay attention to the rental prices around you – it may be that the cost of the property you buy is not worth the income coming from it.
Additional Tips for a Successful Real Estate Investment
Due to the risk that exists in real estate investments, it is always important to come prepared for the worst. The more money you invest in real estate, the greater the amount of profit you will make from it. However, it is important to make sure that you do not jump over the pubic and endanger more than you can contain. The solution to this situation is to invest in an apartment in the periphery where the equity is relatively low, but at the same time, the rent is accordingly.
What is the reason why it is better to invest the money in real estate than to deposit it in a bank?
The reason why it is better to invest the money in the bank than in a bank deposit is because the return is very low. In the past, yields were higher at the bank, but today this is not the case. Moreover, many economists claim that in the foreseeable future, the return received from the bank may be zero or even negative. In contrast, in the real estate market, this is not the case. The prices of apartments are rising steadily and their value is only increasing. In addition, it is possible to rent out the apartment and get a much higher return.
Investing in a bank vs. investing in the stock market
Investing in real estate, unlike investing in the stock market, is much less risky. In other words, it is a stable investment that is not subject to extreme fluctuations. On the other hand, investments in the stock market are subject to extreme fluctuations. If the value of the stock is high today, it may suddenly drop and lose its value. Investing in real estate may not make you rich in a very short time, but it is a wise and informed investment in the long run.
Do you want to make an investment in real estate? Get into the project as soon as possible
If you are investing in any real estate project, you should invest in the project as early as possible. This is because the yield for a low-income apartment is lower than for apartments under construction. The reason for this is that if you invest in any real estate project, you should not procrastinate and invest as quickly as possible. This is because the yield for a low-income apartment is lower than for apartments under construction. The reason for this is that apartments that are in the construction stage are significantly cheaper, and after construction, their price jumps.
Moreover, agricultural land for sale may even be a better investment. The reason for this is that agricultural land can later be designated for the construction of commercial and residential areas. Which, in fact, will cause the value of the land you bought to jump significantly. Considering that there has been a construction boom in Israel in recent years, this could be a great option.
Real estate investments in land for sale are much cheaper than buying an apartment
Agricultural land for investment is much cheaper than buying a new apartment. Thus, in fact, even those who have only a relatively modest amount of money will be able to invest in the purchase of land. On average, land for sale costs about NIS 100,000 to NIS 200,000, and even if all the necessary amount is not available, in many cases it is possible to obtain financing, a mortgage or a loan in order to purchase the land. Overall, this is an investment that requires relatively low equity with high long-term return potential.
How to purchase agricultural land for sale?
In order to derive the highest possible profits from the investment of buying land, it must be bought in the initial stages while the prices are still low. On the other hand, you also need to know which land you should buy. This is because not every agricultural land will necessarily become land intended for the construction of residential and commercial areas. In other words, the idea is to purchase the land at the lowest possible price, but with a high chance that later on the land will be thawed, so that its value will skyrocket.
What type of land is recommended to buy?
- Agricultural land for sale at low prices that may later become land designated for construction
- Lands in sought-after areas (usually in the Gush Dan area, or in areas with a high construction boom)
Real estate investment in land will require you to have zero maintenance costs
Real estate investments, in most cases, may require you to incur various incidental expenses. The reason for this is that there are different maintenance costs, such as: various repairs in the apartment, maintenance of the apartment, plumbing, etc. However, real estate investments of agricultural land for sale do not include any associated costs. Thus, in fact, this is a net profit and there are no expected unexpected expenses.
Investing in real estate will make you no longer have to look for a tenant
Investing in land for sale will make it unnecessary for you to look for tenants for your property. This is time-consuming and involves a lot of work. What’s more, sometimes the apartment can remain empty for a while, due to the fact that no tenants can be found. On the other hand, agricultural lands do not require any involvement in this at all. Agricultural land for sale, it is recommended to sell the land when it is approved for construction or after the construction project is completed.
Where is it recommended to purchase land?
It is recommended to purchase land in more central and sought-after places. The reason is that the more sought-after the place is and the more it is located in a central location, the higher the chance that the land will be thawed. Therefore, one of the most important parameters that should be emphasized is the issue of location.
How to search for land for sale?
Here are the details that you should pay attention to before buying land for sale:
- budget
- Estimated thawing time
- Where you want to invest
- The planned zoning plan in that area
What is the reason why it is recommended to see the land before purchasing?
Arriving at the site of the ground in a physical way will allow you to get a real impression of the size, type and location of the soil. In addition, if there are aspects that interest you as a developer or as a purchaser of the land, this is the exact way to get all the details you need without talking to the municipality or the private landowner.
What are the critical things to check before purchasing the land?
When investing in real estate, there are several stages that must be passed before you purchase the land:
- You must check in whose name the ownership of the land is registered: There is a difference in the conduct between land registered in the name of the Israel Lands Administration and land that is registered privately. The sweeping preference is to use privately owned land in order to avoid complications with the legal system, or in short – to avoid unnecessary bureaucracy. Another advantage that can be obtained from privately owned land is the ease of building permits.
However, it is advisable to check that there are no debts, liens or various foreclosures on the land you want to buy, and it is also imperative that you check whether the landowners are indeed legally registered on the registration wording.
If you do choose to lease through the Israel Lands Administration, you must check whether there is a clause that allows the state to take back ownership of the land. If this is the case, make a U-turn from the deal and look for another real estate deal.
- What are the plans for the future and what building rights you are entitled to: As mentioned before, it is important to check the plans, restrictions and rights to which you are entitled before you make the purchase of the land.
Details that are important to examine in depth:
- Number of Housing Units
- Building Percentages
- The number of floors allowed in the same area.
It is also recommended to obtain as much information as possible from the city’s planning committee and the local authority regarding the timing of the thawing of the land you intend to buy and whether there is a possibility or chance of changing its designation for construction.
The process of land thawing is a long-term process that is combined with difficult bureaucracies, since it involves obtaining approvals from a variety of bodies, each operating according to its own procedures. Sometimes, the opposition to construction stems from environmental organizations or alternatively from residents who do not want additional buildings to be built next to them. Our recommendation in this regard is to check that there is no objection even before purchasing the land – many projects can fall due to delays in time.
Therefore, our proposal is to choose land that is in the more advanced stages of thawing, building permit, and zoning. Such a test will be worth a lot of money to you down the road.
- Look around, around: It is very important to do a check around the land you are interested in purchasing based on the idea that land that is close to public areas such as factories, factories and nature reserves is less preferable than land that is located near residential areas.
And why? The closer your land is to residential areas, the more you can get a zoning change, following which you will also receive building permits.
Other important things to pay attention to: Is there proximity to public transportation and main road routes, is the land close to parks, playgrounds, culture and leisure, and what are the public institutions that exist near the land. These parameters will directly affect the land thawing and building permits, as well as the value of the area.
- Negotiations, or in other words – how much will it cost me: When you purchase land, there is a tax of about 6% of the value of the transaction you will make. At the time of sale, the seller is obligated to pay a tax called betterment tax, because the sale of the land increases its value by up to 20%.
Another payment you will have to make is a betterment levy, when approving a plan and turning the designation of the land from land prior to construction to land approved for construction.
Therefore, land that is in the process of being compromised will be the most worthwhile and will yield you the most economically viable deal, both in terms of costs and in terms of time to money that can be earned from the transaction.
In conclusion
Mani Group – Marketing, Entrepreneurship and Finance incorporates a variety of fields and is home to the real estate and investment sector. If you want to make a real estate transaction or if you want to know better how to invest money in a profitable way, whether as an entrepreneur or as a marketer or a financier, you can find the right connections for you through the Mani Group company. Mani Group is a partner in a variety of projects, so it is worthwhile for you to check with them before making a purchase in the real estate field.
