A Guide to Investments in Indian Real Estate

Real estate property has traditionally been a method 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. leilão de imóveis rj

Money used in property due to its income and capital growth provides stable and predictable income returns, similar to regarding bonds offering both an everyday return on investment, if property is rented as well as likelihood 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. 

Expenditure scenario in real property

Any investor before considering real estate investments should consider the risk with regards to it. This investment option demands a high access price, is affected with lack of liquidity and an unclear gestation period. To being illiquid, one cannot sell some units of his property (as you could have done by selling some units of equities, debt or even mutual funds) in the case of 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 go through the real house sector as a secure means of investment with a certain level of movements and risk. The right renter, location, segmental types of the Indian property market and individual risk preferences will hence forth demonstrate to be key indicators in obtaining the target yields from assets.

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

Additionally there is a demand and need from different market players of the property segment to slowly but surely relax certain rules for FDI in this sector. These foreign opportunities would then mean higher standards of quality facilities thus would change the complete market scenario in conditions of competition and professionalism and reliability of market players.

General, 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 common funds industry and the participation of financial establishments into property investment business, it is going to pave the way for more organized investment real estate in India, which would be an apt way for buyers to get an substitute to buy property portfolios at marginal level.

Investor’s Profile

The 2 most effective investor segments are Large Net Worth Individuals (HNIs) and Financial Institutions. Whilst 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.

Aside from these, is the third class of Non-Resident Indians (NRIs). We have a clear opinion towards buying residential properties than commercial properties by the NRIs, the simple fact could be reasoned as mental attachment and future security sought by the NRIs. As the necessary thank you’s and documentation for purchasing immovable properties other than agricultural and plantation properties are quite basic the rental income is readily repatriable outside India, NRIs have increased their job as investors in real estate

Foreign direct assets (FDIs) in real house form a tiny portion of the whole investments as there are restrictions for example a lowest lock in period of 36 months, a minimum size of property to be developed and conditional leave. Besides the conditions, the other investor will have to deal with a number of government departments and interpret many complicated laws/bylaws.

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