Have you ever wondered how the most successful Real Estate Investors consistently achieve success? As experts, we can tell you that great Real Estate Investments generally follow a process that you too can replicate.

1. Conduct general research on the city you want to invest in.
2. Pick a few locations in the city and analyze their needs.
3. Ensure that the property is a right fit.
4. Pick a financing option, negotiate, and complete the Real Estate Investment.

Real Estate Investment has made many people wealthy. While some have made successful investments by guessing they are the exception. If you want to be guaranteed, and consistent success, then follow the same process that the savviest investors follow. This blog will show you the 4-step process followed by experts in Real Estate Investments.

General Research
General research is the process of highlighting the unique characteristics of a certain Real Estate Market. Buying a property in Dubai is different from buying one in London, and General research helps you understand the nuances of any city you plan to invest in. Here are some factors to consider.

Buyers’ market vs Seller’s market
Due to the forces of demand and supply, the real estate market is always evolving. There are times when buying is easier, and times when it is a lot more difficult.
In a seller’s market, there are fewer properties for sale and more people who want to buy. There are 100 people who want to buy, but only 80 properties are for sale. This kind of market can easily trigger a buying war, and you must tailor your strategy accordingly.
If on the other hand, there are 100 buyers, and 200 sellers then it is a buyer’s market. Since the buyers are spoiled for choice, the prices will generally be more favorable to the investors.
Understanding the market will help you plan your strategy accordingly.

Demographic information
Your general research should also account for the people living in that city.

1. Population trends – how many people are moving in, or out of that city? What kind of people make up the population? For example, knowledge of tourist activity in Dubai indicates that investing in an apartment will deliver a good ROI.
2. Income trends – Understanding the spending power of the population is also important. For example, renting out an expensive restaurant space might be tricky if the people in the area can’t afford to eat out consistently.
3. Employment trends – Apart from the fact that the unemployment rate is an indicator of economic health, the lack of jobs in a city could impact rent and other ROI factors.

ROI metrics for the city
When in doubt, you can also just have a look at the results of other investors. Some of the metrics you can check to include the following:

1. Net operating income
2. Capitalization rate
3. Internal rate of return
4. Cashflow
5. Cash on return
6. Gross rent multiplier
7. LTV ration
8. Debit service coverage ration
9. Operating expense ration
10. Occupancy rate

You can usually find these metrics from developers, or brokers such as Rosenheim Luxury Properties. Click here to request a free appraisal on the state of Dubai Real Estate in 2022.

Neighborhood research
After analyzing the general market, it is time to have a look at specific neighborhoods in the city. For example, there are many parts of Dubai you could potentially invest in, depending on a number of factors.
Neighborhood research will help you understand the HIGHEST AND BEST USE (HBU) of your investment in that area. Some parts of the city are primarily commercial, others tourism and many are residential.
For example, data suggests that Downtown Dubai is good for AirBnBs, In this case, the HBU for the area is a one-bedroom apartment, used for Airbnb. Neighborhood research is about understanding the areas you are looking to buy a property and pinpointing the kind of investment that guarantees a higher chance of success.
Now that you know the importance of neighborhood research, here are a few things to look at:

1. The median price of property sales in the area
2. Compare recent sales and listings in the area
3. The median price of rentals in the area
4. The amenities in the area

Picking a property
Once you have picked a few locations that are ideal for your investment, it is time to pick the property. It is important to perform your due diligence, and not get excited – so as to avoid some nasty surprises later in the lifecycle of your investment.
Ask a lot of questions from the owner, and the agent. You want to know the legal implications f investing in that property.
You should also keep in mind what kind of property you want to buy. Is it a 2 bedroom idea, or restaurant space?
Imagine buying a restaurant space with faulty plumbing that will cost a lot of money to fix. While you may be able to afford it, you should at least be able to make your projections based on correct information. It is counterproductive to learn about this extra expense later.
A proper broker like Rosenheim Luxury properties can also make this process as painless as possible for you.

Make the offer and finalize the deal
We assume that before you get to this stage, you already have money to finance the investment. However, you can read our guide to financing real estate purchases here Beyond the financing, you should also keep your options open. It is a good idea to have multiple properties that you are interested in. This way, you won’t rush into a deal, and you can have more psychological leverage in negotiations.
During negotiations, ensure that you are honest. If there is something that bothers you, talk about it. This will make the negotiation feel more comfortable for everyone involved. You should also try to understand the motivations of the seller. Understanding why they are selling can really help you make a good deal.
Finally, you can just work with a broker like Rosenheim luxury properties, who will ensure that you get the best deal possible.