The Indian economy is on the rise and in such typical times the people look towards a better mode of earning. With the inflation rate stated above 5.5% it has become extremely essential that the return should match at least 7 to 8% or else the business is a waste. Even in these times one can question the rate of interest earned on savings accounts in banks. The interest earned on SBI account is 2.7% and with compounded effect it touches 3.5% at maximum levels. Thus the money is decaying while it is kept in these accounts. Hence one has to find a mode of investment for better returns in such tough times filled with opportunities.
The term opportunities is used in this scenario as the markets are outperforming every standard in current times. The Indian stock market is giving out multiplied returns in investments. The IPOs or the investments in indexes and stocks are giving minimum 3 to 5% returns per month. This accumulates to 50% to 60% returns during the year if the investment and trading is done in a wise manner. However crazy returns are expected from this mode, one has to get the fact that the risk involved in stock market is maxed out to losing all your savings and investments. This is evident through the recent fact of MArch 2020 fall. The markets flushed out its gains over the years and went back to 7500 Levels (Nifty50). Hence one has to opt for a better investment technique.
Currently gold and commodities are also not generating expected results. In case of Gold the money is stagnant (Though Liquid) and in case of commodities higher amount if investment is required for better returns. Hence opting for real estate is a wise method for balancing risk in any investor’s portfolio.
Real Estate Scenario
The current state of the real estate sector is really flushed with opportunities. The market is booming with multibagger returns over property investments. The scenario is people with money have understood a major rule to invest in underdeveloped areas with larger scope. Thus the returns are more than expected. On the other hand with the development speed of Indian people the standard of living is bound to increase. WIth Indian traditions and thoughts in mind one always opts for having his or her own home first before investing into other things. Thus real estate is going to stay here forever.
ReIT
With the time passing by, the dominance of ReIT has been increasing. The reason is very simple. All people don’t have lots of money but lots of people have some extra money. Rather than putting their savings into the market or other options, people prefer to take stake in a ReIT scheme. This ways they incest their money in buying some part of the scheme to be built or an ongoing project or a built scheme. This allows them to share dividends and profits like a partner. They don’t have any right in taking the decision for buying and selling. All they have to do is invest and sit back for the returns to kick in.
The awareness for ReITs have increased due to their stellar performances even during the time of COVID. Even in such worst times where the real estate valuation was going down, such ReIT’s managed to gain particular returns and fulfil the investors’ thirst. Thus this mode of investment has become a highlight for any real estate investor.
Bank Rates and Premium Payments
The banks are also trying to roll out home loans at a nominal rate of 7.10%. This is actually a feasible rate for people who want to take loans for investments. All they have to do is get a share of money and invest it with the loan amount and this way they beat the bank’s interest with the income for rent and property valuation (increasing). There is one single limitation to this scheme. If you don’t have enough money in your wallet you cannot opt for such a scheme.
The simple reason is markets react to the ongoing situations and if by any means you lose your tenants or you lose your income source, one cannot afford to pay the premiums on a monthly basis. Thus having a year’s money aside one can easily find such loans and invest in real estate.
Partnerships in Projects
One more added strategy to invest into real estate is through direct partnership with the builders or contractors. There are multiple projects undergoing within any company. This also means that the company needs financing for running such projects. With a proper mode of liquidity it becomes easy for the construction company to run its projects and also the investors get some paisa on a rupee margin for investing their money into the scheme. Such ideas are becoming popular in traditional markets nowadays.
Also with major redevelopment schemes across towns the companies require fundraisers. Hence joining the company’s investment and becoming a partner in profit and loss is the best mode of investment in real estate nowadays. It omits the possibility of being reliable on the ReIT management and hence gives independence to the investor for his or her investments.
