33.25 What Makes a Location Ideal for Real Estate Investment?
At this point, we have discussed why Real Estate might make sense to you , and why it is a good investment.
Now if you see value, What is the next step?
Scouting of course.
But where do you start?
Where should you buy the apartment?
- A metro city or a tier-2 city?
- In a society or a single building?
- Which society?
The location where you buy Real Estate is important. But so is the market fit of your property in that location!
For this, you need to have an INVESTMENT THESIS.
For this let’s take an example of Goa and Dubai:
This is the Goa Belt:
Here what matters is not just which part of Goa you buy from.
It’s more about the unique features:
- How close it is to a beach (<3.5km)
- Amenities like Swimming Pool
Buying a flat in a random location (far from the beach) with no amenities makes no sense in Goa.
You need to understand the customer-market fit.
Buying a property in North Goa will cost you 2x more than South Goa.
But the same concept of unique features applies here as well.
Now take a look at the Dubai Belt:
You have the premium section that is next to the beach.
Then you have the inwards sections which have gained a lot of traction.
Dubai also focuses on building outwards, in the sea.
Therefore, the supply of Real Estate in Dubai looks like it will be very high. Therefore property price appreciation will most likely be relatively low.
(Dubai 2020 time was a unique case, Russian Money Inflow).
But this does not mean Dubai is a bad market to buy properties. They provide Tax Residency and Golden Visa benefits.
But buying it purely for appreciation might not make sense.
The bottom line is:
You need to know for what purpose you are buying a specific real estate.
It’s not just the location that matters, It also depends on the market fit of your property for that location.
This is more important.
Source
- Akshat Shrivastava's 30 days Real Estate newsletter.
