In India, real estate investments have consistently proven to be an effective strategy for wealth accumulation, with the global market projected to grow at a CAGR of 10.37% from 2022 to 2031.
Thanks to diverse investment choices, from buying a home to commercial buildings, real estate continues to draw different types of investors. Learning how to invest in real estate carefully can help you generate substantial returns, whether you’re a first-time buyer or an experienced investor.
Let’s talk about some of the best ways to invest in Indian real estate, things you should think about before you do so, and how the number of real estate investments in India is growing. You’ll be able to make better and wiser choices that provide a high return on investment if you are familiar with the various property investing options.
Best Ways to Invest in Real Estate
If you do it right, investing in real estate can be one of the best ways to make money. You can use several tried-and-true methods to build wealth or earn a steady income. The following are some of the best ways to get the most out of your real estate and investments:
Buying Property
Buying property is the usual and most popular way to invest in real estate. With this strategy, you can own things that go up in value over time and also have the chance to make money from rentals.
For many real estate investors, buying a home is the first thing they do because it gives them protection, safety, and the chance to increase their value.
In India, places like Mira Road are becoming more famous because properties here are affordable and could increase in value. For example, the value of homes on Mira Road rose by almost 25% between 2016 and 2023, from Rs. 7,400/sq. ft. to Rs. 12,350–16,900/sq. ft.
Loans and other financial options can make property investing easier for owners who want to avoid paying a high upfront cost. Eventually, the property’s value can rise enough to cover the loan’s cost, giving long-term profits.
Essential Reasons to Buy a House:
- Owning an asset that will go up in value over time
- Possible rental income to help pay for your investment
- The happiness and safety that come with having a home
- Buying a residential property has tax advantages
Real Estate Investment Trusts (REITs):
Real Estate Investment Trusts (REITs) are another way to invest in property if you don’t want to buy property directly. REITs take money from many owners and spend it on real estate projects that will make money.
It includes hotels, shopping stores, office buildings, and other commercial buildings. REITs are a great option when you want to invest in real estate but don’t want to deal with buying and operating a property.
In 2023, the real estate investment trust (REIT) sector in India grew 31% year over year, which shows how demanding it is. Also, REITs can be sold on stock markets, which makes them very liquid, which isn’t possible with regular property investment.
Advantages of REITs:
- No need to directly manage the property
- Regular money coming in from dividends
- Diversification of your portfolio by investing in a large-scale real estate asset
Leasing Properties:
Owners of real estate who already have a property often rent it out. You can earn a steady income while still owning the asset by renting your home or commercial space.
There are pros and cons to both long-term and short-term leases. While short-term leases, like holiday rentals, can bring in more money during busy times, long-term deals offer more excellent stability.
There is a considerable demand for rental properties in Mumbai, especially in rapidly developing neighbourhoods like Mira Road. However, you will have to take care of property upkeep, manage tenants, and ensure that the agreement terms are clear and legal.
Commercial Real Estate:
Commercial real estate has a higher return on investment (ROI) than residential real estate but requires more funds during initial investment. Office buildings, shops, and industrial warehouses are all examples of commercial properties. Commercial real estate is a safe investment that will make money in the long run.
When you invest in commercial real estate, you can also lease it for longer periods and often on better terms. Commercial real estate purchases might have substantial upfront costs, but they frequently yield sizable returns due to the rental revenue they produce.
This is especially true in corporate hubs like Bangalore and Mumbai, where high demand for commercial real estate makes them attractive markets for long-term investment.
Here’s why buying commercial real estate is a good idea:
- More rental income as compared to a residential home
- Longer lease terms are better for your budget
- High chance that an asset’s value will go up
Joint Ventures:
Joint ventures are a less well-known but good way to invest in real estate. You can work with other investors or real estate companies on this plan to share resources and income.
This strategy facilitates individual buyers’ access to the required funds, increasing the accessibility of larger real estate developments like residential or commercial complexes.
When investing in properties in high-demand places, joint companies are beneficial. For one trader, the cost of buying directly might be too high. You can use a bigger investment and get better ROI this way, but you don’t have to take on all the risk yourself.
Factors to Consider Before Investing in Real Estate
Before getting involved with real estate and investments, you should consider several factors to make a smart choice.
Location
The site is the most important factor when investing in real estate. The value of properties close to essential services like schools, hospitals, and travel hubs is appreciated faster. People are always looking to move to cities like Mumbai and Delhi.
However, new areas like Mira Road offer affordable living choices and much room for value appreciation. For example, AsmitA Grand Maison in Mumbai has 1 BHK, 2 BHK flats in Mira Road, and Jodi flats for you to choose from.
Legal Documentation
Ensure all formal papers are in order before you sign off on any real estate deal. Check the title deed, ownership papers, and any needed government approvals. To avoid future legal problems, it is essential to have a clear and easy-to-understand agreement. One way to lower risks is to work with a reputable real estate developer like AsmitA India Realty.
Real Estate Developer Reputation
The reputation of the real estate developer you pick will significantly impact the quality of the property you get. AsmitA India Realty is known for offering comfortable houses on Mira Road at reasonable prices. Before investing in a project, it is always ideal to investigate the developer’s past work to ensure you make an informed investment decision.
Agreement Terms
Read all of the terms in the agreement very carefully, whether it’s a lease or a sale contract. The agreement should include payment schedules, when to take ownership, and fines for late payments. An open agreement officially protects both parties and prevents future disagreements.
Real Estate Investment Growth in India
The market for real estate investments in India has grown significantly in the last few years. A mix of economic reasons, more people living in cities, and helpful government programs are some of the potential reasons. India is one of the world’s fastest-growing economies. This makes it a desirable market for investors from inside and outside the country looking for a steady ROI.
Read More: Indian Real Estate Forecast
Here’s a closer look at the factors driving the growth of real estate investments in India.
Urbanisation and Infrastructure Development:
India is becoming increasingly urbanised, and towns are growing rapidly. As a result, new real estate investment opportunities have emerged through the development of infrastructure such as roads, metro networks, and smart cities. Real estate is booming in cities like Mumbai, Bangalore, Hyderabad, and Pune, which allow people to make money in residential and commercial real estate.
Government Initiatives:
To help the real estate market, the government has started several programs, as mentioned below:
- The Pradhan Mantri Awas Yojana (PMAY) aims to make a home affordable for everyone.
- The Real Estate Regulation and Development Act (RERA) ensures that real estate deals are open and accountable.
Because of these rules, investors are more confident, and it’s easier for people to find real estate as an investment.
Rise in Demand for Affordable Housing:
Nowadays, people can easily get home loans and are eager to buy houses, driving the affordable housing industry ahead. AsmitA India Realty is meeting this requirement. We exert extra effort in areas like Mira Road, where investments may provide substantial returns.
Real estate is now one of the best investment opportunities in India. It gives a stable and appealing return on investment.
Takeaway
Investing in real estate is an extensive choice that needs considerable thought and planning. There are a lot of choices, from the more traditional way of buying property to newer ones like REITs and joint ventures. To make a good investment, you need to know the market and pick the right place to put your money. It also means ensuring your long-term investment fits your financial plans.
If you want to invest in Indian real estate, Mira Road is the best place to start. Developers such as AsmitA India Realty offer an impressive range of options that are both affordable and of high quality. With the proper research and strategy, real estate investment can generate stable returns and contribute to long-term wealth building.
Frequently Asked Questions
How can I invest in the real estate market without actually buying any property?
You can put your money into real estate through REITs, which let you invest in real estate assets without actually buying the property.
Why is it a good idea to invest in real estate in India?
India has a lot of tax breaks for people who invest in property, especially people who buy a home. You can subtract the interest you pay on a home loan under Section 24(b) of the Income Tax Act. Under Section 80C, you can also get a tax break on the loan’s capital payments, up to ₹1.5 lakh per year. Because of these pros, real estate is a reliable investment choice.
How are investments in residential and commercial real estate different?
When you invest in residential real estate, you buy a home to live in or rent out. Most of the time, these homes cost less upfront and are easier to handle. On the other hand, commercial real estate includes properties like office buildings, shops, and factories. These have longer lease terms and a better ROI but require a higher initial investment.
When is a good time to invest in real estate?
There is no specific right time to invest in real estate because it depends on the market, your financial condition, and your investment goals. However, when the market is going through a downturn and property prices are cheaper, it’s typically a reasonable idea to buy.
However, it’s always smart to invest in property if you find a great location with significant potential for value growth. This is because real estate is usually a long-term investment that grows in value over time.
How can I figure out the worth of a property?
You can determine a property’s worth by examining its position, infrastructure, plans for future growth, and market trends. You can also get a better idea by examining the cost per square foot of a similar home in the area. Talking to a real estate developer or a financial planner for an exact valuation is also an excellent idea.
What are the risks of investing in real estate?
Real estate also carries some risks, just like any other investment option. Changes in property prices, new rules, project delays, and unexpected upkeep costs are a few examples. However, these risks can be lessened with careful study and planning, making real estate one of the safest investments.