Real Estate Investment in India: Where to Begin and How to Flourish

Investing in real estate has been one of the oldest means of accumulating wealth. Since property values tend to go up over time, real estate investment provides a steady means of capital appreciation. Moreover, rapid urbanisation and city-wide migration for work are increasingly the order of the day. Consequently, the demand for housing and commercial space has only increased, making real estate investment a popular choice among investors. For example, according to a report by the Indian Brand Equity Foundation (IBEF), the Indian real estate market is expected to reach USD 1 trillion by 2030. In this blog, we will find out all about how you can start your journey in the real estate business to meet your investment goals for the future.

Things to Keep in Mind Before Investing in Real Estate

1. Understand Your Investment Goals

Knowing your investment strategies and ensuring they align with your investment goals is the foremost step in your journey. Is long-time investment with steady rental income more favourable than short-term investments with quicker turnover? Are you looking to rent out your own property or pool for a fixed sum of money with others?

Understanding your goals will help you make the correct choice to meet your investment needs and avoid potential losses.

2. Do Market Research

The real estate business is a highly localised venture. This means what works in a particular area might not work elsewhere. It is important to have a thorough idea of the overall market trends and knowledge of the market economics of the given area where you want to invest. Gearing yourself with such necessary knowledge will help you practice caution and maximise turnover.

3. Legal Due Diligence

Ensure that all the property legal documents are up to date, such as title deed, building plan, and occupancy certificate. Verifying the legal authenticity of documents and following the due diligence process will clear you of legal complexities in the future.

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How to Invest in Real Estate in India?

First, there is the traditional method of investing in real estate, which involves actually buying property. Here, you own an asset, which you can buy or lease and then rent out to tenants for commercial or residential purposes.

Now, there are newer methods of real estate investment that ensure faster capital appreciation and diversification of investments without requiring you to own a property at all. Some of these methods are given below.

1. Real Estate Investment Trusts (REITs)

A REIT is an investment fund that owns and operates income-generating real estate properties. It is a lucrative opportunity for those willing to invest in real estate without owning property. With a REIT, you will essentially be putting your money in a pool with several others. As a shared investment, it relieves one of the burdens of investing a hefty sum. As a retail investor, you can invest with as little as INR 1000 and receive a fraction of the profits as dividends.

2. Real Estate Mutual Funds

Real Estate Mutual Funds are a great way to diversify your investments and maximise profit from multiple shares. Similarly, such funds significantly reduce the risks associated with individual real estate investments. With real estate mutual funds, you can invest primarily in real estate-related assets such as REITs, real estate stocks, mutual funds, sector funds, and other real estate-related securities.

3. Real Estate Wholesaling

This is a unique way of generating huge profits through real estate sales with relatively little capital. An investor, who is a wholesaler, in this case, will buy a property at an underpriced value. Consequently, he will sell that property to an end-buyer at a much higher rate, which may even exceed the original property cost.

By repeating this process over and over again, the wholesaler may be able to generate huge revenues while minimising the hassle of actual ownership of property. A real estate wholesaler should, however, possess a deep knowledge of the real estate market to be able to identify when potential properties are listed at underpriced quotes.

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4. Online Investment Platforms

Online real estate platforms collect funds from investors and pool them to invest in real estate opportunities. Such online marketplaces list individual residential units besides a diverse set of immovable assets. Therefore, you can choose the property type that will best meet your purpose.

In conclusion, gone are those days when real estate investing was the sole prerogative of the uber-rich. Today, you can venture into the real estate world with limited funds and still generate huge wealth over time. However, it is very important to not be overconfident and do necessary research and assess risks before venturing into decisions.