How to invest in Real Estate

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Why should you invest in Real Estate

Asset creation – One of the most important point is asset creation when you purchase a property you buy something valuable that can help you earn and also possibly increase in value over time. Real Estate is also a very lasting asset, when you purchase a flat or a piece of land you know that asset will be around the next 15 year to 20 years because Real Estate is a long term asset. Its value is recognized and it can also be something to borrow against in times of an emergency a lot of banks in India give loans against property and if you find yourself in such circumstances having a valuable asset can be help in a time of need.

Diversification- Another important point and reason to invest in Real Estate is diversification over time you have to create a basket of different financial products but physical assets tend to form an important part of this. It’s the same logic people use when investing in gold as these physical assets are seen a separate from the entire ecosystem of financial product we see today such as mutual funds bonds stocks which are also now primarily digital.

How can you earn from real estate

How can you earn from real estate
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There are two main ways that one earns here the first is price appreciation where you buy a property and price increases over time and the second is rental income where you lease out the property and get paid every month for its use. now these two ways of earning also relate to the concept off financial freedom because they involve the process of wealth creation and passive income price appreciation has been a big driver for real estate investor in the past where if you bought a property or a piece of land in a new or developing its price would increase a lot in the long run and your wealth would increase with it. On the other hand you choose to rent out a property once you have a tenant set. You don’t really have to do much work day to day and these become a source of passive income for you. Over time passive income like this whether it’s rent from a property or even dividend that you get from shares even dividends that you get from shares can help cover your expenses and help you move towards financial freedom because you don’t have to relay on your job.

How to become an investor in Real Estate 

1. The first way obviously is to invest directly in Real Estate  by actually buying a property you can buy a residential property whether that’s a house or a flat a commercial property such as a shop or an office or even an industrial property and a piece of land

 2. The second option is to invest indirectly such as buying the shares of a real estate company. There are also financial products based on real estate becoming popular in India. One of these option are reits or real estate investment trust a reit is a rent earning portfolio usually consisting of large office park with corporate tenants that is listed on a stock market and created in a way to distribute the rental income to investors through a product like this you get to invest in a premium real estate portfolio that’s already rent earning without a lot of the work associated with buying an actual property. The minimum investment in a reit is also much lower than what you would be investing to actually purchase a property another new option for investment is fractional ownership where private companies and start-ups sell you a small fraction of a pre leased or already rent earning property. However as compared to a read this is not listed in a market and it’s done through private ventures so the level of risk can be different can be different.

Potential drawbacks for beginners

As a beginner someone who is new to finance and the world of investments real estate will probably not be the first investment you make in a lot of cases and for a lot of valid reasons. However it is definitely one of the investments that should make in your life and it should be a part of your eventual portfolio one large barrier to actually investing in real estate in the ticket size or the average size of a product in this industry in India across major cities affordable houses are classified as flat under forty five rupees which is significant amount for someone earning in their twenties real estate is also less liquid than a lot of other assets here liquidity means the ease with can convert any asset into cash as compared to investments in a mutual  fund.

Conclusion

Real estate is good for long term investment, if you are able to long term investment with your money then you should try for real estate if you are not able to do long term investment you want to short term investment then do not invest in real estate because it gives you profit if you are thinking for a long term. if you will have money requirement within sometimes then do not invest your money in any state never risk more than one percent of your capital thank you for visiting our website.

FAQ

  1. What are some examples of real state ?
    property, plant, and equipment.
  2. Four Major Types Of Real Estate Properties In India
    1) Residential Real Estate.
    2) Commercial Real Estate.
    3) Industrial Real Estate.
    4) Investing in Land
    3.who is the owner of real estate
    The person recognized by the law,

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