A Guide to Investments in Indian Real Estate

Real-estate has traditionally been a place for considerable investment by itself and investment opportunity for High Net-worth People, Financial institutions as well as individuals taking a look at viable alternatives for investing money among stocks, bullion, property and other avenues. Top Realtors Surrey

Money used in property due to its income and capital growth provides stable and predictable income returns, similar to regarding bonds offering both a typical return on investment, if property is rented as well as opportunity of capital appreciation. Like all other investment options, real estate investment also has certain risks attached to it, which is quite unlike other investments. The available investment opportunities can broadly be categorized into residential, commercial office space and retail sectors. 

Expense scenario in real real estate

Any investor before considering real estate investments should consider the risk with regards to it. This investment option demands a high admittance price, is experiencing lack of liquidity and an doubtful gestation period. To being illiquid, one cannot sell some units of his property (as you possibly can have done by selling some units of equities, debt or even mutual funds) in case there is urgent need of funds.

The maturity period of property investment is uncertain. Investor also has to check the clear property title, especially for the investments in India. The skillfully developed in this regard claim that property investment should be done by people who may have deeper pockets and longer-term view of their opportunities. From a long-term financial returns perspective, it is a good idea to invest in higher-grade commercial properties.

The returns from property market are comparable to those of certain equities and index funds in longer term. Any investor looking for balancing his portfolio can now glance at the real property sector as a secure means of investment with a certain level of unpredictability and risk. The right renter, location, segmental kinds of the Indian property market and individual risk preferences will hence forth demonstrate to be key indicators in obtaining the target yields from purchases.

The proposed introduction of REMF (Real Estate Common Funds) and REIT (Real Estate Investment Trust) will boost these real house investments from the small investors’ point of view. This will also allow small investors to enter into real estate market with contribution as little as INR 10, 000.

There’s also a demand and need from different market players of the property segment to slowly but surely relax certain best practice rules for FDI in this sector. These foreign purchases would then mean higher standards of quality structure thus would change the complete market scenario in conditions of competition and professionalism and trust of market players.

Total, real estate is expected to give you a good investment alternative to stocks and bonds over the arriving years. This attractiveness of real estate investment would be further increased on account of favourable pumpiing and low interest rate regime.

Looking forward, it is possible that with the progress towards the possible opening up of the real estate communal funds industry and the participation of financial corporations into property investment business, it will eventually pave the way for more organized investment real estate in India, which would be an apt way for traders to get an substitute to spend money on property portfolios at marginal level.

Investor’s Profile

Both the most energetic investor segments are Large Net Worth Individuals (HNIs) and Financial Institutions. Although the institutions traditionally show a preference to commercial investment, the high net worth individuals show affinity for investing in residential as well as commercial properties.