REAL ESTATE IN INDIA AND ITS IMPORTANCE
Real estate is a significant asset type in India. It has been a crucial engine of economic growth in recent years, adding considerably to GDP and providing job opportunities. Rising earnings, urbanisation, and demographic trends are all likely to boost growth in the Indian real estate industry in the years ahead. It includes residential, commercial, retail, and industrial properties, providing a diverse set of investment opportunities.
As India rapidly urbanises, the demand for real estate grows. It is seen as an appealing investment opportunity for those seeking to build long-term wealth and income. Real estate is regarded as a good asset for investors since it provides rental income, price appreciation, tax breaks, and inflation protection.
POINTS TO CONSIDER BEFORE INVESTING IN REAL ESTATE
The following are important considerations to consider before investing in real estate:
CONDUCT THOROUGH RESEARCH: Prioritise considerable study before beginning property hunting. With so many projects accessible, it’s easy to become overwhelmed. Sellers frequently employ persuasion methods, thus confirming amenities, facilities, the building company’s track record, materials utilised, and the property’s location are critical. Neglecting research might result in regrettable decisions that jeopardise your investment.
CALCULATE FINANCIAL CONSIDERATIONS: Assess your financial status carefully to ensure you reach your investing objectives. While borrowing from banks is generally possible, it is critical to carefully assess the related interest and other financial aspects.
EXPERT OPINION: Seeking advice from knowledgeable investors and doing thorough research should never be disregarded. Because market circumstances have an impact on property investment results, it is recommended that you learn everything you can about the project developer from a credible source like Land Masters. We will help you discover all the ins and outs of the investment you seek most securely.
WAYS TO INVEST IN REAL ESTATE IN INDIA
In India, there are several methods to invest in real estate, including purchasing physical property and investing in real estate-related financial products. Some of the popular approaches are:
BUYING PHYSICAL PROPERTY
This is the most conventional and direct method of investing in real estate, in which investors acquire a property outright or with a loan and keep it for a long time. Investors can purchase residential properties such as flats, villas, and plots, as well as commercial properties such as offices, stores, and warehouses, based on their goals, budgets, and preferences. The benefits of purchasing real estate comprises of having total control and ownership of the property, income from rentals, price appreciation leading to capital appreciation, tax exemptions and breaks, and safety against inflation through value growth.
FIX AND FLIP
This is a more active and short-term style of investing in real estate, in which investors purchase a property that requires extensive upkeep, fix it up, and resell it to other purchasers or investors for a substantially greater price. This allows investors to benefit by increasing the value of the property while also taking advantage of market conditions. The advantages of fix and flip include quick returns and significant profits, low investment costs, flexibility, and inventiveness.
REITS (REAL ESTATE INVESTMENT TRUSTS)
Investing in real estate through REITs is a more indirect and passive process; investors purchase REIT units, which are akin to mutual fund units. An organisation known as a REIT manages and controls a portfolio of real estate properties that generate revenue, including hotels, malls, and office space. A REIT pays dividends to its unitholders equal to at least 90% of its income. The advantages of REITs are low initial investment and transaction expenses, high liquidity and diversity, consistent dividend income, and professional management and transparency.
InvITs (INFRASTRUCTURE INVESTMENT TRUSTS)
InvITs are another indirect and passive option to invest in real estate, with investors purchasing units similar to those found in mutual funds. An InvIT is a firm that owns and manages a portfolio of revenue-generating infrastructure assets, such as roads, bridges, and power plants. An InvIT pays at least 90% of its earnings to its unitholders in dividends. The advantages of InvITs are similar to REITs.
ETFS (EXCHANGE TRADED FUNDS)
ETFs are another indirect and passive way to invest in real estate, with investors purchasing ETF units just like any other ETF. An ETF is a programme that tracks the performance of an index, such as the Nifty Realty Index, which consists of real estate-related firms’ equities. An ETF seeks to offer returns similar to the index it monitors. The advantages of ETFs are similar to InvITs.
REAL ESTATE MUTUAL FUNDS
Another indirect and passive method of investing in real estate is through real estate mutual funds, which investors purchase like any other mutual fund. An investment plan that invests in the securities of businesses involved in the real estate industry, such as financiers, developers, and builders, is known as a real estate mutual fund. A real estate mutual fund seeks to provide investors with both income and capital growth.
FRACTIONAL OWNERSHIP
This is a more direct but shared method of investing in real estate, in which investors purchase a portion or share of a property rather than the entire property. Investors can purchase fractions or shares of residential or commercial properties according to their goals, budgets, and preferences. The advantages of fractional ownership are lower investment outlay and transaction costs, partial control and ownership of the property, consistent revenue from rentals and price appreciation leading to capital appreciation.
KEYS TO SUCCESSFUL REAL ESTATE INVESTMENT IN INDIA
When considering real estate investing, keep the following suggestions in mind:
BEGIN WITH A WELL-DEFINED PLAN: Establish clear investing objectives and a plan of action that supports your financial goals.
NETWORK AND SEEK PROFESSIONAL ADVICE: Connect with seasoned investors, attend real estate seminars, and get advice from experts including real estate agents, financial advisers, and legal professionals. Land Masters is one such destination for comprehensive real estate services.
HAVE A LONG-TERM PERSPECTIVE: Real estate investments demand patience since profits might take time. Maintain a long-term perspective and refrain from making rash judgements based on short-term market volatility.
WHICH OPTION SHOULD YOU CHOOSE?
Real estate investments provide several benefits, but it is critical to examine what best meets your needs. Investment quantity, liquidity, cash flow regularity, and risk tolerance are all important considerations when making decisions.
Owning, leasing, and flipping properties need significant investment, experience, and a thorough grasp of the local real estate market. It also includes tasks like tenant screening, asset management, and locating possible purchasers.
Mutual funds and ETFs are ideal for people who wish to invest gradually and are hesitant to make large lump sums. However, they may not provide consistent cash flow. Also, liquidity is determined by the NAV and units at the moment of redemption.
REITs typically issue dividends quarterly, although some may pay out regularly. However, under a REIT, the asset mix cannot be changed, therefore any losses experienced by the assets must be borne by the investors.
Fractional ownership is growing in popularity since it allows investors to select successful assets and then sell their stake if their expectations are not reached.
Regardless of the approach taken, it is critical to understand how real estate investments function over time. As trusted real estate experts, we feel that the best way to maximise the benefits of real estate investing is to keep an asset for the long term. Thus, we offer end-to-end solutions, from planning to execution in different types of real estate, whether agricultural land, industrial land, warehouse land, residential, commercial, digital infra, renewables, or oil & gas industry. Buying, selling, or renting, connect with us for service and support!
