Ensuring high return in real estate investments

and benefits of real estate investments.
It is trite in our real estate market like all others that high input normally ensures high returns.
One has to train and develop a keen eye that identifies properties that yield five to six-digit growth potential once it has been purchased and developed.
The normal trend for first time buyers who have come into some money is to search for high-end properties that have all the right specifications and decor.
One normally chooses a property that is well painted with immaculately manicured lawns.
This is not a bad investment as this is a general trend in most high-end areas in Harare.
If one studies the local property index, prices generally rise over time.
However, the investor deprives himself or herself of a potential profit windfall in the short term by identifying a property which one can convert to such a desired state.
The first and probably most important step in ensuring a return on investment is identifying the location of prospective property.
At this point the investor on selection of location can ascertain short-term demand by a rough valuation of property prices and their rates of movement.
Long-term demand can be projected by future projects available and if the area is fully established and in demand, this may be a guarantee that the area is likely to continue in value growth over time as less properties will continue to be available for sell.
Location is important in valuing ceiling prices. This can be done by the valuation of surrounding areas ceiling prices to ensure that one does not over-invest in a particular property.
The ceiling price is that price which is the maximum price one can reasonable achieve in a certain area if all necessary developments are carried on a particular property.
This ceiling price renders all other investments on particular property superfluous if their intended purpose was to capture a price above the ceiling price.
This is because the new investor will have an option of buying a property with more return potential in a better area.
The need for a proper selection of the location will apply whether one intends to buy into a new development or renovate an existing property.
If one buys into a new development it is important to question the developer on his vision for the particular development and the benefit that is likely to accrue to oneself by buying into the vision.
This is critical because it will determine the value growth of the property.
Questions on the developers target market, type of properties that are expected or required to be built on development and all other requirements that are supposed to be adhered to by purchasers of stands or houses in development. This in essence ensures the investor that the investment will not only be safe, but will guarantee a substantial return in the short to long term.
One can always value the growth potential of any development by the amount of personal investment the developer has put into the development.
Another method that provides a substantial return is to identify properties that are ripe for conversion or renovation.
Some of these properties may at first glance seem expensive when one considers their state.
However, one has to keep in mind that it is not the present state compared to price that justifies the purchase, it is actually the intended outcome compared to the initial asking price that justifies the purchase.
When one views a property transaction from its intended outcome vis-a-vis its initial cost, then one may be considered qualified in understanding the intricacies of real estate investment.
It is this mindset that allows one to convert previously worthless real estate into high demand property.
A conversion of use allows also great potential for a huge return on investment, one may convert from single dwelling into cluster or residential to commercial use.
Whichever method one intends to use, investments in our local real estate when done properly or under the guidance of a seasoned property investment consultant, often guarantees a substantial and sometimes shocking return on initial investment.