How To Invest In Real Estate In India
August 8, 2021
It is a well-known fact that real estate is one of the safest investment avenues. However, for many, it
is quite difficult to understand how to invest in real estate and get high returns in the future. Seeing
that a real estate investment is something that requires a sizeable capital, it is a decision that should
be taken after due consideration. Luckily, today, there are many reputed developers offering
projects in major real estate destinations like Chennai, Hyderabad, Delhi, Gurgaon, and many
others. At the end of the day, real estate is a sector that requires a fair bit of effort before one can
finalise an investment.
Why Invest in Property?
Before you start considering how to invest your money in real estate, you need to know why it is a
prudent decision. There are numerous benefits of investing in real estate – an investor can enjoy the
benefits of predictable cash flow, get good returns on investment, diversify their asset portfolio, and
enjoy tax rebates. It is possible to leverage one’s real estate investment to build wealth.
How to invest in real estate is a common query which calls for a well-researched approach. That’s
because a well-chosen property comes with the promise of guaranteed appreciation in the long run.
Besides this, it also extends avenues like generating fixed income through rent or using the property
as leverage to borrow capital from numerous financial institutions to fuel your plans for the future.
How to Invest Your Money in Real estate?
Before choosing the right property or project to invest in, there are several things that you should
consider. Think about why you wish to buy a property, what is the configuration you are looking for,
what amenities do you require your property to have, whether it will be for your own use or for
renting out, and so on. Once you know what you are looking for, your search will become much
Estimate What You Can Afford
If you are thinking about how to invest in real estate with little money, there are many financing
options that you can consider. However, before any of that, you need to ascertain what you can
afford. For instance, real estate in Chennai, Delhi, Hyderabad, and other such regions is a sizeable
investment. Moreover, property prices can range from a few lakhs to a few crores. You don’t just
need to consider the down payment but also need to think about the amount you can take as a loan,
the EMI you will be liable to pay, and whether that EMI will be feasible for you to pay in the future as
well. Once you have arrived at an amount that you can comfortably afford, make sure you stick to
the budget when you finally start looking at properties.
Preparing for a Home Loan
The real estate industry in India is flourishing at an encouraging pace. Furthermore, many real
estate companies have tie-ups with several financial institutions to facilitate home loans with ease.
However, even after you know the amount you wish to take as a home loan, you need to ensure that
you are eligible for it as well. First, you should check your credit score and if that is lower than
required, you should look at how you can improve it. Paying off outstanding debt or consolidating
your debt are certain steps that you can take. A loan can perfectly address your main concern –
“How to invest in real estate with little money”, but you need to ensure that your loan is within
your means to repay on time.
Once you have understood how to invest money in real estate, the next question should be about
where you should be putting your money. You should look for a good property that has an attractive
project plan (balanced distribution between open space and occupied land) and offers value for
money (has amenities, benefits and facilities while also being affordable for you). In the real estate
industry in India, property is judged based on several factors like:
. Transport facilities
. Type of home
. New or used property
. Floor plan
. Types of parking spaces
. Open spaces
. The reputation of the developer
The Developer’s Reputation
One of the best things about the real estate industry in India is that you can find a lot of options.
However, you must do your due diligence before choosing a real estate developer. There are many
issues, like problems with plan approvals, last-minute changes, bad quality construction, delay in
delivery, etc., that you might face if you choose the wrong developer. So, in order to avoid such
issues, you need to put in efforts and research.
For example, before choosing the right developer for real estate in Chennai, visit previous projects
by the developer, check their reviews online, and talk to a few residents residing in their projects to
get an authentic and unbiased view. Some qualities of a good real estate developer include: –
. Timely project completions
. Quality of project layout
. Proper flat floor plans
. Superior construction quality
. Good quality of installed fittings
How to Invest in Real Estate without Buying Property
It is a given fact that property investment is quite a capital-intensive avenue. Because of that, many
investors tend to stay away from property investments. So, if you too are wondering how to invest
in real estate with little money, here are alternative ways of investing in real estate: –
. Real Estate Mutual Funds
. Buying Shares in Real Estate Companies
While you won’t become the owner of a property, you would still be able to be a part of the growth
of the real estate industry in India.
All in all, it isn’t just about how to invest money in real estate but when and where to do it. Hence,
make sure you factor in all of this and make an informed decision.