Emerging Hotspots Or Established Performers: Where Should You Invest?
Investing in real estate can be profitable if done right. But, of many, one of the most frequently asked questions by keen investors is -- Should I invest in a property located in an emerging hotspot or move to the established performers?
A majority think that proven performers are a better bet given the capital growth of these areas, there are some who believe that a keeping a property in emerging hotspots can mean affordable entry points and the profits later can be heavy. Though the argument is ongoing, selecting one of them would depend on the kind of budget you have and also, the timeline for which you would want to keep the property. To make it easy for the investors, MakaaniQ lists pros and cons of investing in either:
Emerging hotspots: The pros
- These areas are not well-developed yet but are now being seen as the potential holders. Hence, investing in them now could get you a property at an affordable price when compared to their counterparts in well-established localities.
- The infrastructure in these areas is still under development but once developed you could earn strong capital growth. Make sure you have the patience to wait for a few years.
- One could earn great returns as development touches completion in these areas. For instance, suburbs that are yet to witness upcoming public transport that could connect them to the central business district can fetch you good returns once there is smooth connectivity.
- Earned good returns? You could use the money to further expand your portfolio.
Emerging hotspots: The cons
- Investing in an emerging hotspot can be a gamble. What if the market did not pick up the way it was forecasted?
- The sudden growth spurt could be short-lived, hence, you will have to be careful about when is the right time to sell.
- What if the infrastructure development is delayed? It might affect your future investment plans because you will have to wait a little longer to sell the property.
Established performers: The pros
- Tried and tested, established localities can be a safe bet as everything here is developed and with a steady demand and sound infrastructure.
- The risks are lower as these localities don't face oversupply and hence, the competition is less. Ask for an apt price and you will get it.
- Those planning short-term can opt for these localities.
- Good or bad state of real estate, property sale in established localities is affected the least. People will still be looking for property here.
Established performers: The cons
- For the long-term investors, these markets do not guarantee a long-term growth or gains. You would not want to stagnate your portfolio by investing in a property that witnesses a single-digit growth in prices in the long run.
- Holding on a negative property thinking that a proven performer would bounce back, you might be in for a gamble. A lull in an established market can be long-term, too.
Also read: Should You Invest In Another City?