Many new investment choices emerged as we entered the modern era. Investors have a variety of options for storing their money, including equities, bonds, fixed deposits, mutual funds, digital currency, and crypto currency. However, out of all of them, real estate continues to be one of the safest and most advantageous routes for a long-term, successful kind of investment.
Investing in real estate is an intelligent decision. The value of real estate always rises with time. When it comes time to sell, a wise investment might provide a sizable profit. Additionally, rents have the propensity to rise over time, increasing cash flow. History shows that you will profit more from real estate the longer you hold on to it. But what are the actual reasons why prices go up? In this article, you’ll learn five key points that explain why real estate increases in value – from the expertise of economists to the forces of supply and demand. Read on to find out more!
Real estate – how can people make money out of it in various ways?
- Profit from long-term rentals in real estate
- Gain financial gain from commercial property rentals in real estate
- Invest in real estate and flip houses to make money
- Use Airbnb and holiday rentals to make money in real estate
- Real Estate Investment Groups (REIGs)
- Mortgage Investment Corporations (MICs) and Mortgage-Backed Securities (MBSs)
5 Factors Driving Real Estate Value
- Infrastructure Development
Infrastructure is the backbone of any real estate market. Here are a few ways that infrastructure development can increase the value of your real estate investment.
Better access to transportation: Improved roads, public transit, and other forms of transportation make it easier for people to get around, which makes your property more accessible and desirable. For instance, if a metro is proposed along any corridor the rates of that particular courridorr keeps on increasing while the metro is in development stage additionally one can expect a huge leap in the PSF rates once the metro becomes operation. Similar concept is adopted by airports and bus networks as these are the primary sources of commute on which people rely upon.
Improved amenities and facilities: A good lifestyle is something which everyone are eyeing at. The major reason for people to relocate is in search of better oppurtunities of living Infrastructure development can also include the construction of new parks, schools, and other amenities that make your community a more attractive place to live. This increased demand for your community will drive up prices.
Excellent safety: Well-designed infrastructure can help to improve public safety by providing better lighting and security features like Access control system, Security gates, Surveillance cameras, Smoke detectors etc. It makes your community a more desirable place to live and can lead to higher prices for your property.
- Workplace Connectivity
For a real estate investment to be successful, the property must be located in an area conducive to business activity. Therefore, a critical factor in determining the value of real estate is the connectivity of the workplace. Businesses can easily connect with potential customers in an area with good workplace connectivity. This type of environment is typically found in areas with high population density and good infrastructure, like flats in Mira road in Mumbai.
To assess the workplace connectivity of an area, it is crucial to consider factors such as which industries are planning to establish their businesses in the area, the existing set of companies and the commute distance. A well-connected area should have good transportation options so businesses can easily reach their customers.
- Network Externalities
According to Real Estate Economics, one of the main reasons real estate increases in value is network externalities. It is often seen in technological products like cell phones, where early adopters benefit from connecting with a more significant number of people, and late adopters are at a disadvantage.
The same is true for real estate. As more people move into an area, housing demand increases, and prices increase. Again, it is because people are willing to pay more to live in an area with a good reputation, better schools, and more amenities. And as prices go up, even more people are drawn to the site, creating a positive feedback loop. As a result, top real estate players like MICL Group have projects in the major areas.
- General Inflation
As the cost of living rises, your home’s value goes up too. Also, Inflationary pressure can also come from excess demand in the economy. When more money is chasing after limited goods and services, prices go up. It works on the principle of demand and supply. There are several ways that inflation affects real estate. As an illustration, the cost of constructing a home rises dramatically as a result of increased salaries and more expensive supplies and material, as prices go up, their purchasing power declines While inflation can drag the economy, it’s good for homeowners because it increases the value of their biggest asset – their home.
- Zoning Laws
When zoning laws change in a way that favours development, it can increase the value of the real estate.
Zoning laws can also have a positive impact on neighbouring property values. For example, if a new commercial development is approved in an area, it is likely to increase property values in the surrounding area. It is due the new development will bring more foot traffic and customers to the site, which will benefit businesses and increase demand for housing.
In conclusion, there are many reasons why real estate can increase in value over time. From location to economic growth, these factors contribute significantly to the long-term success of an investment. Flats in Mira road east from Real Estate brands like MICL are the best-selling ones. In addition to getting great returns, you’ll also be able to enjoy all the benefits that come with owning a home or property, something that is both rewarding and fulfilling at the same time.