5 Reasons to Invest in Real Estate And How To Get Started?

5 Reasons to Invest in Real Estate And How To Get Started?

By
Akhila Masapogu, 27-Sep-2019
Assetmonk-Real-Estate-Investment-Growth

About 10% of the world’s richest people are Real estate investors - says an article issued by Forbes.

If there’s one best asset to invest on earth it would be investing on earth. Most billionaires of the world are real estate investors, and this fact makes it obvious that Real Estate is highly rewarding. Real Estate is more attractive compared with traditional sources of income. Investing as early as possible will be the best thing to do to reap the most out of your investment. Investing in real estate serves as a great source for capital appreciation, to generate passive income and also to diversify your investment portfolio.

440 million millennial population accounts for the development of the Co-living concept in India. Millennials’ lack of interest is the main reason for paving the way for the development of Co-Living. The concept of Co-living was developed keeping in mind the millennial populations’ housing needs and problems that the traditional hostels and PGs failed to cater to. The driving force behind the rising popularity of co-living spaces is the youth moving to new cities for chasing their dreams.
Co-living has really turned the fate of students and professionals staying away from home in traditional PG’s and hostels which lacked even basic facilities such as well ventilated, spacious rooms. Co-living communities provide solutions to common housing problems such as high deposits, negative perception letting to bachelors, basic facilities like well-ventilated rooms and high-speed internet. Co-living provides all the mentioned amenities with additional facilities such as an amphitheater, library, gym, pool, a/c, community room, and high-speed Wi-Fi. The youth of the country now seeks a homely place where they find comfort and enjoy the sense of living in a like-minded community. Co-living spaces are also very affordable considering the amenities and hotel standard maintenance they provide. Features of Co-living that make to the best of living.

Real Estate investment which was once a game of only institutional players and seemed out of reach to many investors has now become a trustworthy investment option for everyone. It is a unique sector that offers an investment opportunity for every kind of investor. May it be long term, short term or investors looking for passive income, the Real Estate boasts to the needs of every kind of investor.

REASONS TO INVEST IN REAL ESTATE

The land is one asset that only appreciates along with the time and this fact makes it more appealing to investors looking for a secure investment option. People who haven’t considered investing in Real Estate are missing out on a great opportunity. It is an asset that everyone should have in their investment portfolio.

If you are looking for a strong push to motivate you for getting started, then here are a few benefits of investing in Real Estate.

1. Steady passive income-: Passive income is a huge perk for people investing in real estate properties. Along with capital appreciation over time rental properties generate attractive rental returns. If the investor manages to save up the cash flow after paying all the mortgage, taxes, insurance and any repairs, they can lead a happy retirement life. Passive income from rental properties acts as a great back up income for uncertain times.

2. Capital appreciation-: Capital appreciation is the difference between the purchase price and the selling price of an investment. Real estate is a type of investment that will grow in its value based on the number of years it is held. The more the years held the higher the appreciation. Also, the location of the property plays an important role in capital appreciation. Properties in a location with well-developed infrastructure tend to appreciate more in less time.

3. Inflation-: Even if you have the cash fixed deposited in your bank account to generate interest, it still suffers due to inflation which is always more than the interest rate. One of the benefits of investing in real estate is a hedge against inflation. Real estate investors are always at an advantage as their investment appreciates every year, and also generates rental income which increases at the same pace as the inflation rate. So every time the cost of living goes up so does their cash flow.

4. Tax benefits-: Real Estate offers a handful of tax incentives and benefits to investors on everything, from rental properties to industrial and commercial buildings. Investors also enjoy tax benefits including depreciation and significantly lower tax-rates for long-term profits, compared to short term gains. So holding on to the investment for the long term benefits the investor with less taxation.

5. Risk diversification-: Real estate is a great market place for risk diversification. Its different kinds of properties from, zero risks with a minimum yield to Greenfield properties with higher risk and double-digit yield. And it is always better to invest in multiple assets to overcome the risks involved with the investment. Real estate has room for every kind of investor with properties meeting the needs of every type of investor.

How to get started

Just a considerable amount of knowledge about the real estate industry; it’s legal, financial and regulatory aspects, and a budget are all that you need for investing in real estate.

1. Pick a budget -: Real estate investment is done mostly for the purpose of improving your finances. So the initial step would be to decide the budget of your investment. When purchasing real estate for investment purposes, you need to consider the cost of taxes, utilities, upkeep, and repairs.

2. Careful property assessment -: Choose the right property to invest which will cater to your investment objective. Real estate offers many kinds of properties appealing to every type of investor. Investing in real estate is usually all about capital growth and also generating regular income, so choosing a property that is more likely to increase in value is the most important decision you will make.

3. Start small -: Initially as you start investing in Real estate, remember to take small steps. Start off with a small budget and low-risk properties and once you get comfortable and find your feet in this sector you go about it full-fledged. Taking risks initially will not help in the long journey.

4. Diversify the risk -: Do not put all your eggs in one basket. Diversifying the risk is one of the key moves of investment. Invest in different types of properties and explore different vehicles of investment to diversify the risk involved in the investment. Also, you will get to diversify your investment portfolio.

Even if not possible overnight, Real estate investment is a great way to develop wealth and improve your cash flow over time. Investing in real estate in India is one of the best ways to achieve wealth and financial freedom. Proper guidance, knowledge and maybe professional help can help you make a good amount of money.