Common people identify real estate investments as something highly coveted, highly attractive — and uncomfortably unfamiliar. Airavata is here to make you lead your thoughts and reflect on how to proceed on the same.

Although it’s widely accepted that a strong real estate investment has the potential to generate considerable wealth, until recently relatively few investors had the chance to acquire first-hand experience with the asset class. And despite its many advantages, real estate can be a complex investment. With today’s wide availability of opportunities, it’s as important as ever to know how to approach all types of real estate investment methods.

Shrewd investing starts with knowing how to ask the right questions. That’s where this article can help. No matter which method you plan to use to put your first dollar toward real estate, these are questions you should consider beforehand. By studying the points and potential pitfalls outlined here, you can learn some of the crucial ways to assess an investment before committing your hard-earned cash.

Questions to Ask Before Any Real Estate Investment

Let’s start with questions that every prospective real estate investor should think about, no matter what kind of investment model they’re considering.

Do you have the time and expertise to invest actively, or would it make more sense for you to invest passively?

There are major differences between active and passive real estate investing, and most investors will have a clear inclination for one over the other. However, if you’ve just started to think about real estate generally, you might not have figured out exactly where your preference lies. Once you do, you’ll likely identify which option best suits your situation — or you might recognize that one model is simply not feasible or economical for you. For example, love the idea of owning a piece of land which multiplies returns? Look at active options. Alternatively, simply don’t have the time to deal with properties and processes first-hand? Consider passive investments. Those decisions can have an immediate impact on the specific investment you pursue, and how much it costs for you to get started.

What’s your investment timeline? How important will liquidity be to you in the future?

Defining a timeline, or investment horizon, is crucial for any investment, though some kinds are particularly illiquid. That makes identifying a comfortable timeline even more important when it comes to real estate investing. Make sure you know if and when you’ll need liquidity and, if so, whether the investment can support your particular needs.

What makes a particular real estate investment attractive to you? How would you define success?

“Money!” might seem like the obvious answer, but responses can differ as much as people themselves. For some, an adrenaline-pumping fix-and-flip is their first choice real estate scenario, while others want to stay as far away from hands-on work as possible. Knowing what matters most to you in investment will help you determine a clear view of what success in this investment can look like. It will most likely involve a return goal, but will it include any other aspects, benefits or responsibilities?
At Airavata, we ease everything for you and lead the processes towards high return on investment while involving you in profits and taking care of the rest. For detailed know-how on the subject, you can contact us.