Real estate is not just about buying a house to live in. It’s also a smart way to grow your money. You can buy homes to rent out or invest in companies that own lots of homes. No matter how you invest, owning a property remains a reliable method to build wealth. This article highlights five simple ways to invest and profit in the real estate industry. Let’s explore how you can get started.
1. Invest in Rental Property with Flexible Floor Plans
One of the most traditional ways to invest in real estate is by purchasing a rental property. This could be a residential, multi-unit, or luxury vacation property. Owning such properties provides regular rental income, qualifying it as a long-term investment. This steady cash flow can significantly boost your wealth creation efforts.
For instance, you have purchased a building with a group of flats for sale in Gurgaon and want to earn money out of it. You can live in one unit and rent out the others. If your property has one big floor without dividers, you can make it a rental office space for small to medium businesses. This can significantly lower your personal housing costs while providing steady rental income. You can also use the same idea with commercial and agricultural spaces that you wish to put up for rent.
2. Buy Properties for Self on EMI
Buying properties on EMI is ‘the’ way for many people to invest in real estate. The process begins with a house hunt and culminates in applying for a home loan for the purchase amount. This allows you to pay the money back in monthly payments. It is not a business investment as it generates no income, but it is an easier way to ditch the rent expenses. Also, you will benefit from the appreciation value that the property builds over a period of time. This flexible financing method can be applied to homes, offices, or agricultural lands.
3. Invest in Digital Schemes
Buying a property can be daunting for a salaried person, often hindered by rejected loan applications or restricted budgets.
However, today’s flexible schemes have opened many opportunities for all income groups. Digital schemes offer an easier way to invest in real estate without the hassle of maintaining a real property. There are a few schemes that are safe and easy to invest in.
Real Estate Investment Trusts (REIT)
REIT allows you to invest in real estate indirectly. By buying shares of a REIT, you own a part of a portfolio of properties like office buildings or shopping malls. What makes such an investment easy? The REIT itself. The platform manages these properties and collects rent, which is then shared with investors as dividends.
For example, you invest 10,000 in a project listed on REIT. The REIT’s property management team manages this property and puts it out for rental purposes. At the end of the year, the REIT generates the X amount from the rental income. As a shareholder, you receive a portion of that profit as a dividend.
Real Estate Mutual Funds
These are just simple mutual funds in companies associated with real estate. When you invest in a fund, you buy units of that company. Whatever the company makes, you will get a bite of that as per your investments. This way, you benefit from the growth of the real estate market without having to manage properties yourself. However, as every Mutual Funds advertisement says, it is subjected to market risk. Thus, spreading your funds in different ventures or consulting an expert to handle your investment portfolio is advised.
Exchange Traded Funds (ETFs)
This form of investment takes time and effort to grow. ETFs belong to the fast-paced trading sector and work by tracking an index like the NIFTY Realty Index. By buying units of a real estate ETF, you invest in a portfolio that includes stocks of various real estate companies. ETFs also come with the benefits of mutual funds, allowing you to trade easily on the stock exchange. This provides a low-cost and flexible investment option.
Infrastructure Investment Trusts (InvITs)
Looking for a more steady form of real estate investment? Well, InvITs are your answer. Focus on income-generating infrastructure like roads, bridges, and power plants; this scheme will give you good returns without hassle. By buying units of an InvIT, you invest in a portfolio of infrastructure projects that generate revenue over a period of time. InvITs share at least 90 per cent of their income with investors as dividends, which means you can find good projects in no time.
4. Use Real Estate Crowdfunding Platforms
Real estate crowdfunding platforms offer an easy way to invest in real estate by pooling your money with other investors to fund projects. This significantly lowers the money you need to invest in a real property. You can invest in various properties, such as residential, commercial, or industrial properties.
One of the main benefits is diversification. With lower investment amounts, you can spread your investments across multiple projects, reducing risk. Some platforms even allow you to start with as little as Rs 500. The best part about crowdfunding is that the platform manages these properties and collects and updates you on your investments through an online dashboard.
5. Become a Fractional Owner
Fractional ownership stands apart from crowdfunding as it directly purchases property rather than relying on pooled funds for a project managed by a third party. This method lowers the investment requirement but gives you all the perks, like rental income and property value appreciation. It allows investors to access high-value properties that might otherwise be beyond their reach.
For example, you can own a fraction of a luxury apartment or a commercial building and benefit from the property’s rental income. Just search houses for sale near me, and you will find various listings of properties. Contact the concerned person and check whether the property is up for fractional ownership. Finalize the documentation and voila! You will get what your percentage of the property has earned.
Conclusion
There are many ways to invest in real estate. You can buy a whole property or just a small part of one; either way, the goal remains the same. All five methods are easy to grasp and manage, making your investment journey feel like a walk in the park.
However, caution is key! Read the fine print and understand the field before deciding. Also, make sure to verify your source. It’s important to know the nitty-gritty of your project to make a wise decision. Ultimately, it’s about creating a better life through wise investment decisions.
(This article is part of IndiaDotCom Pvt Lt’s sponsored feature, a paid publication programme. IDPL claims no editorial involvement and assumes no responsibility or liability for any errors or omissions in the content of the article.)
