Where I do invest my down payment money, what’s the best place? (only if investors have loan free capital or own money)
That’s a serious question about to investing down payment.To understand the mechanism of down payment is essential for the new investors in investment money in commercial projects, shopping malls and residential projects or lands.To plan what sort of investments investor want to invest is important and must plan how much down payment should be invested in realty. According to financial institutions, 20% down payment must minimum of investment in realty. The percentage of down payment depends on the current situation of the projects. In commercial projects such as shopping malls, residential or commercial apartments 20% down payment is an absolute figure to invest. In case important for investors to find out the completion time period of the projects.Usually,the grace time period of 3 to 5 years is perfect for mega projects.In case if the time period is less than 3 years investor can increase down payment 30% to 35% if developers are willing to complete the project in the given time frame. Increase in down payment can help investors to pay installment on time and apply processing on time to keep the time safe and then investors can rent or sale property. Moreover, Good return on investment only can achieve if the area around the project is develop and people are ready to buy property in specific area. Investor need to research before investment about the development trends because it helps to understand the concept of real estate investment.
Down payment concept in residential areas vary with the development of the residential area. In residential investment where developers offer residential apartments, lands and houses. As we mention 20% is the basic rule for the down payment investment. However,Developer and realty societies ask more than 25% down payment. The calculation requires here to deal with the situation and the level of development.In most cases the land is ready almost for possession so investors need to give more down payment around 50%, then they must pay on the bases of possession time period. Possession time is less than a year or 2 year. Investors need to pay more because its a saving of time and sell the property and move on for next projects. Moreover, If the project is new then it takes time for fully develop and also prices increase slowly and usually take more time and known as slow investment returns.
Down payment investment is not considered a good step in investment because of the slowness of competition and low return of the profit. It is a good step for people who want to build own house for living. Developers usually plan this type of investment to develop new areas so such kind of investment takes time to return a profit. In many cases such investment depends the time period of the projects or the development of the rounding areas.It takes five to ten years to return a big profit. Down payment investment depends on the financial situation of the investor and in as few ways down payment is a good way to put money in business rather than keep it at home. So we must say check and examine your financial condition before investment. There is nothing wrong in any investment method and every investment have goods and bad. However, main things what you have in the pocket.