IS BUYING AN APARTMENT A GOOD INVESTMENT OR NOT?

“Is it profitable to invest in an apartment? Is it the best time to invest in apartment buildings? Or is it better to invest in a villa plot?”
These are evergreen questions that keep breaking the heads of a majority of first-time investors in real estate today. Especially when it comes to metropolitan cities, for instance, the real estate Bangalore, the plethora of options seems to be never-ending.
Investing in real estate is different when compared to other sectors of investments. You need a lump sum amount of guaranteed fund flow over the long term to make it worthy of investing. On the other hand, stepping into the shoes of the investor, he/she will have to get ready, to let go of a huge sum, with a forecast of getting it back in the form of good returns. In simple terms, only when what you let go is surpassed by what you receive, any investment is deemed to be profitable. The same is applicable to investments in the real estate regime too.
It is a unanimous conclusion that the real estate sector, on the whole, is highly unorganized but robust. We can’t give outright answers to questions like, “Are apartments good investments?”. It depends upon several factors and their cumulative effect which is highly subjective. However, there are a lot of things that when considered, you can be sure of taking a better wiser decision. On that note, without much bragging let’s start exploring a few tips that will help you figure out if investing in an apartment building is profitable for you or not.
Questions that will help you decide if apartment buildings are good investments or not:

• • What is your investment goal?
  • What is the size of your investment?
  • What is the tenure of your investment?
  • Do you want to hedge?

What is your investment goal?
Begin by asking yourself, ‘Why should I invest or what is that I am trying to get out of the investment?
Are you trying to buy a new home or are you going to rent it out? In the case of the former, it is better to make a higher one-time investment. For instance, a luxurious 2 or a 3 BHK, depending upon your requirements.
If you are planning to rent it out, then there are a lot of budget-friendly apartments that will fetch you stable returns in the long run. Apartment buildings have a lot of flexible options like 1, 2, 2.5 & 3 BHK that can better suit your investment needs. Thus, picking the right one that aligns with your investment goals is the first tip to making an apartment a good investment.
What is the size of your investment?
If the size of your investment is very big then you can very well choose posh apartments like the DSR Parkway and DSR Vertex & Apex. Such luxurious apartments will have a range of world-class amenities in their kitty. Moreover, there are also properties in prime locations that are always in demand in metropolitan cities. Apartments in Sarjapur, 2 & 3 BHK flats in Whitefield, and flats for sale in Electronic City are a few such options. These apartments always have good buyers, evergreen! Hence investing in such apartments will be profitable.

On the other hand, if your size of investment is small and your main aim is to earn lucrative returns in the form of promised rent, then go in for small apartments in key locations stated above. Even a decent 1BHk in a strategic location is fair enough. In such instances, smaller apartments are good investments for you without any doubt. Thus, having a clear idea about your investment size will also make buying an apartment a good investment.
What is the tenure of your investment?
If you are aiming for a long-term investment, say 10+ years. Then eye developing locations that promise a good land value in the future. Spotting areas in close proximity to the IT Hubs, speciality hospitals, and class universities are bound to fetch a higher capital appreciation. Though the value of a few apartment projects can be currently low, they might fetch better, over the stipulated long period due to a promised rise in the market trend, guaranteed economic upswing and the like. Such buys can grant you an easy sell in the long run at a striking rate. The story behind 3x, 5x & 10x returns from apartments, is nothing but the same. This makes apartments, good investments for higher capital gains.
If a short-term is your cup of tea, then any apartment from any top real estate builder will fetch you a steady rental inflow for 2 to 5 years. Henceforth you can just sell it off and invest in any other property of your choice. Thus, apartments are good investments even if you are on the lookout for a passive income.
Do you want to hedge?
Investing in apartments is also a good way to hedge the inflation impact. The fall in the value of money or the rise in the prices can be absorbed by such capital appreciations and higher rents from the apartments.
Final thoughts:
Thus, though the advantages and the flexibility granted by the apartments on the investment front are highly attractive, one needs to have a thorough understanding of one’s own investment agenda and carry out a viable cost-benefit analysis and make a smart move. As already stated, the answer to the question “Is buying an apartment a good investment?” lies within you. We have just eased out the process of filtering down to get closer to your answer. Happy buying!!
In case of any further thoughts, get in touch with us through the comments section below.
You might like to read:
Why is it now the best time to invest in a property?