How to Invest in Real Estate
Investment in real estate is considered a lucrative way to grow wealth over time and should form a part of every investor portfolio. However, aspiring buyers of real estate need to plan carefully and research and understand the market first. Some of the ways to invest in property include outright buying of real estate to become a landlord, buying undervalued property, fixing it and reselling it at a profit, becoming part of a real estate investment group (REIG) or by investing in a real estate investment trust (REIT), which basically works as dividend-paying stocks. Here’s a general guide to your real estate investment journey:
Investment Goals
First establish what you want to achieve with your real estate investment; whether it’s a secondary rental income, long-term capital appreciation, etc.
Market Research
Arm yourself with information on different types of real estate investments – whether it’s in villas, apartments, commercial buildings or plots, along with their risks and returns. Focus on factors such as location, rental returns, vacancy rates and economic trends.
Finances
Assess your finances and how much money you can afford to invest in real estate. Consider your savings, down payments, your CIBIL score, loan eligibility, etc. For those investing directly in real estate, compare interest rates, down payments, terms and conditions, etc., when exploring loan options.
Investment Strategy
Determine whether you want to be a direct investor in real estate or invest through REITs, REIGs or real estate crowdfunding platforms. The latter form of indirect investment requires less capital as compared to direct investment.
Finding Properties
Look for projects that align with your budget and investment goals. Consider taking help from real estate agents, browsing online listings, attending auctions, etc.
Due Diligence
Real estate investments are capital intensive and you need to be vigilant as you conduct due diligence on the property to assess its value, potential returns, etc. You could even take the guidance of property lawyers to review all the documents and contract agreements.
Manage Your Investment
If you are investing directly in rental villas or apartments, you will need to deal with tenants and maintenance/repairs of the property. When investing indirectly in REITs or REIGs, you will need to monitor your portfolio regularly and stay abreast of market developments.
For those interested in investing in residential real estate, premium developers like Fortius Infra have a high-end ‘Under the Sun’ villa project comprising of 140 resort-like units sprawling within a 30-acre fruiting orchard in Devanahalli, Bangalore North. These rivetingly beautiful and spacious villas are ideally located along the IVC Road in Devanahalli, close to office parks, social infrastructure and other important facilities, and just 2.5km from NH7 highway and 8 minutes’ drive away from the Bangalore airport flyover. With Bangalore North being the latest investment hub for real estate investors, this is the best time to invest, while prices are still reasonable!