A Guide to Investments in Indian Real Estate

Real estate has traditionally been one of the most lucrative investment avenues per se , and also an investment opportunity for high net-worth individuals and financial institutions and even individuals looking at viable alternatives for investing their money in properties, stocks, bullion as well as other avenues.

Property investment for its earnings and capital growth will provide steady and predictable income returns like bonds. They offer both a regular return on investment, in the event that property is rented as well as possibility of capital appreciation. Like other investment options the real estate market is prone to risks. it, and is different from other investment options. The investment options available can be broadly classified into residential, commercial retail and office space. Visit:- https://connoisseur-realty.com/

Investment scenario in real estate

Any investor before considering real estate investment should take into account the risks associated with it. This type of investment comes with an entry price that is high, suffers from lack of liquidity and an uncertain gestation period. Since it isn’t liquid the investor is unable to sell pieces of his property (as you could do by selling some units of equity, debts, or mutual funds) in the case of urgent need of funds.

The maturity period of property investment is uncertain. Investor also has to check whether the title is clear particularly when investing in India. Industry experts on this issue say that investing in property should only be carried out by those who have a greater financial capacity and have a longer-term perspective on their investments. From a long-term perspective, financial return standpoint, it is recommended to invest in more prestigious commercial properties.

The gains from the property market are comparable to some index funds and equities over the long run. Investors looking to diversify his portfolio can now take a look at the property sector as a reliable source of investing with a certain level of risk and volatility. The right tenant, the location, segmental categories of the Indian property market , and personal preferences for risk will prove to be key indicators for achieving the expected income from investments.

The implementation of REMF (Real Estate Mutual Funds) and REIT (Real Estate Investment Trust) can boost these real estate investments from a small investor’s perspective. This will also enable small investors to get into the market for real estate with a contributions as low as INR 10,000.

Also, there’s a desire and demand from different market players in the real estate segment to gradually ease certain norms for FDI in this sector. Foreign investments will be accompanied by higher standards of high-quality infrastructure and would alter the entire market environment in terms of competition and professionalism that market participants display.

In the end, real estate is expected to offer an investment opportunity that is superior to bonds and stocks over the coming years. This attractiveness of real estate investments will be enhanced by the combination of low inflation and a favorable interest rates.

As we look ahead, it’s possible that , with the advancement toward the eventual opening of the real estate mutual funds industry and the participation of financial institutions in investing in property and the development of property investment, it will clear the way to more organized real estate investment in India that would be an excellent opportunity investors could have the opportunity to invest in property portfolios with a minimal amount.

Investor’s Profile

The two most active investors categories are those of High Net Worth Individuals (HNIs) and Financial Institutions. While institutions generally favor commercial investment, the higher net worth people show an interest in investing in residential and commercial properties.

In addition, there is the third category of non-resident Indians (NRIs). There is a clear bias towards investing in residential properties rather than commercial properties for NRIs This could be explained by the emotional bond and future security sought by the NRIs. The paperwork and formalities required for purchasing non-movable property other than plantation and agricultural properties are fairly simple and rental income is easily repatriable to countries outside India, NRIs have increased their investment in real estate.

Foreign direct investment (FDIs) on real estate make up a small proportion of all investments because there are limitations that include a minimum lock-in time that is three years long, minimal size of the property that must be developed , and a conditional withdrawal. Beyond these restrictions that the foreign investor must meet, they will need to negotiate with several agencies and interpret complicated laws and bylaws.

The idea of Real Estate Investment Trust (REIT) is on the verge of being launched in India. As with other new financial instruments, there are going to be some issues before this concept can be accepted.

Real Estate Investment Trust (REIT) would be structured as an organization that is devoted to owning and, in most cases operating income-generating real estate like retail centres, apartments office buildings, warehouses and offices. The REIT is a company that purchases, develops, handles and disposes of real estate properties and lets investors put money into a professionally managed range of assets.

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