9 Effective Ways to Invest in Real Estate Across India - BM Group Realty (2024)

There are several issues which need to be considered, while you invest in real estate across India. You should always conduct through research, verify property documents, check out the location and facilities available. In-depth knowledge about market rates can only make your investment fruitful. Several reports state that negotiations play a major role while someone invests in real estate. Lastly but not the least, seeking for professional assistance is very important.

Having questions about how to invest in real estate for passive income? The different ways to invest in real estate property will be discussed below.

Buying Entire Property

This is the most traditional form of investing in terms of real estate. Investors can buy anything including villas, houses, warehouses, offices, shops, etc. There should always be an investment objective, you should hunt accordingly. Physical properties serve several advantages by offering full control, fixed income from rentals, tax benefits and even appreciation of the land value. Make sure to be aware of disadvantages like maintenance, huge amount of investment, market risks and many more.

Buying An Apartment

Buying an apartment comes first to most people’s mind, while they look to invest in real estate. Apartments are generally cheaper than houses and quite affordable. EMI’s makes the investment even easier. Experts suggest not buying old apartments while considering an investment, as it can depreciate very highly. Maintenance costs are lower in terms of apartments as they are shared. Apartments should be considered different from residual and investment point of view. Make sure to choose the right one for maximum returns from your investment.

Fix And Flip

Several investors buy old property quite intentionally and fix them for quick reselling. This is nothing but a short-term investment like trading in share market. If you considering about fix and flip, make sure you are well aware about the market conditions. Investors generally take advantage of market conditions while looking for fix and flip. Low investments, high profits and quick returns attract the investors, while it is a very risky and hectic process to invest in real estate property.

REITs (Real Estate Investment Trusts)

In this form of real estate investment, one simply buys a share or unit of the company which owns revenue generating assets. These assets can be anything including offices, hotels, shopping malls or any other commercial spaces. Generally these companies share more than 90% dividend to their stakeholders. This investment process is less risky, offers regular dividend and managed by professionals. Although you cannot expect huge returns and there are several regulatory restrictions.

Related Post: How to Invest in a Rental Property

InvITs (Infrastructure Investment Trusts)

Just like REITs, it is another indirect and passive form of real estate investment. REITs are highly prone to market volatility; InvITs on the other hand are much related to political risks. Even in this procedure company owns profit making assets which you can own partially. Dividends are distributed based on the percentage of ownership. The advantages and disadvantages are quite similar to REITs.

Real Estate Mutual Funds

This is very similar to buying any other units of mutual funds. Mutual fund in terms of real estate is a scheme which is invested to secure a real estate company. These companies can be builders, financial investors, suppliers, contractors, consultants, etc. You can easily be a unit holder by investing minimal amounts and receive regular dividends. If you have questions about how to invest in share market, you can definitely try out real estate mutual funds.

ETFs (Exchange Traded Funds)

Investing here is very similar to investing in any other ETF. You can easily buy your desired share based on the index. Performance of companies working engaged in real estate sector is continuously monitored. Dividends are shared completely based on their performances. CNX Nifty or BSE Sensex is mostly considered while measuring the performances.

Fractional Ownership

Rather than buying a whole property, you can also buy a part of the property. This is mostly considered due to the low cost investment and minimal risk factors. Although it offers lack of liquidity and diversification, it can still offer regular income through rentals. Partnership can also be indulged in this particular concept. It can be a good fit for those looking for options in real estate investing for beginners.

Buying A Piece Of Land

Keeping aside all the structural elements, you can simply buy a piece of land and wait for appreciation. Structural elements never appreciates, it is always the land. Recently a lot of investors are only focusing on vacant lands. Although it is hugely profitable to invest on lands, it is long-term investment and also important to buy them at the right price. Make sure to check out the location and the future aspects of the locality. For example, A proposed metro station can hugely appreciate the value of a land.

Conclusion

Selecting the right investing option to start with is always difficult and natural concern amongst all. Hopefully the intensively discussed points above will help you to choose the right option about how to invest in real estate for passive income. Regardless of the numerous advantages which a real estate investment offers, make sure of your needs. Generally factors like risk, cash flow and several other market factors play an important role in decision making. For those looking for low risk investments, Mutual funds and ETFs can be the ultimate choice. REITs generally distribute dividends quarterly, and some may even offer monthly payouts. Apart from fix and flip, experts generally recommends towards long-term involvement for maximum benefits.