Part 1: The Basics of Real Estate Investments

Real Estate

As all types of investments, it is important with a well thought through market research.

Before you dive in to a project that is available on the platform, you have du create your own image regarding how the current situation of the economy is. During the fall of 2008, during the period of the financial crisis, there was a very bad time to make an investment in properties, no matter how good the project looks on paper.

It is also important to look how the development curve för the real estate project will be, is there a greater demand than supply or the other way around? Has there maybe been a decision from the government regarding that type of property that will increase the demand during the building of the project?

The next step is to look how the property is placed.

Everyone that has ever purchased a house or an apartment have hard the sales pitch from a real estate agent that it is close to the city centre. However that pitch is getting old, since more and more people are looking for housing outside of the city regions, that is why there is a lot more projects outside of the city centre and towards the suburbs.

When you do your research for the project you are interested in, it is important that you are both wide and narrow in it. How does the current supply and demand ratio look for that type of property the coming 10 years? If similar properties will be built nearby, there is a possibility that the supply increases and the demand stays at the same level or goes down. Alternatively an expansion of the public transport will be made to the area that the properties are located, which will most likely increase the demand.

As we said it is also important to be narrow in your research, so you need to think about that specific property that you are interested in investing in. Is it better located than other properties in the area? Better view? Maybe lakeview? Important to remember is that all objects are unique!

In Part 2 we will explain more about the risks of real estate investments and what is important to think about so you can prepare.

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