REAL ESTATE
What Is Real Estate?
Real Estate is a property which consists of land and infrastructure which include buildings(Flats and Villas), structure and utility systems along with natural resources. Which server as living place for all humans.
Why did I even take up Real Estate into the investment section? Real estate is the best investment asset class when you learn what to do with real estate. Before, I give a detailed view of why one should invest in this financial instrument. Let us look into what are the different investment options we have in the real estate domain.
Vacant Land
Vacant lands are undeveloped properties, farms, which are usually purchased for future development. One interesting fact about vacant land is you can come into the agriculture field, especially there is a lot of scope into new agriculture technology like Vertical Agriculture, Hydroponic etc.
Vacant is not just agriculture, you can start a small business, you can build an apartment for regular income, you can build the home of your choice at any time you want and the way you want. Vacant land is where most business start, most business expand, and moreover that vacant land is there no matter what the flood, or earthquake.
Residential Real Estate
Residential properties where small developments happened like housing for individuals, families, and groups. This is an asset class which most people are familiar with. Here you can also see big apartments, villas, and other living arrangements constructed to their own needs and capacity.
When you start your family it is not about the place you live, most people like to live in their own home, apartment with their loved ones with more relaxed and happy. So residential real estate plays an important role in one’s life, and they are good investment where you can rent portion of your home for rent and make regular income, similarly holds for apartments and villas. The only quest you should ask yourself is, Can you afford that investment at that current time period of your life?
Commercial Real Estate
Commercial properties are the places where you can create a small business by renting or owning the properties. This is an interesting investment because if you are an entrepreneur who is looking to build a small new business, small places are the best place to start. The business can have a Shop, Hotels, Beauty parlor, Hardware shop, and Paying guest which works very well in metro cities.
Starting your own business is the best part of anybody life, you can build big building for wedding halls, shopping malls, Gym centers etc. Where your investment generates your regular income for the whole time, especially in cities where there will be more demand for commercial builds.
Note: There is another sector in the real estate domain which is Industrial Real Estate[Manufacturing Units, warehouses] which are multi crore investments so not much bothered about them.
How To Invest In Real Estate Properties In India?
Real estate is a heavy investment which asks for a big capital compared to Equity and Debt. The point to note here, this includes big capital, decision-making becomes crucial as you have to decide does the decision suit you at that time or not. Also, if you’re looking for appreciation on your capital, Will the real estate sector give you the better return than other asset class? This is the question you have to find the answer to make the decision.
As I said big capital is required for this instrument, there is also a big reward as well. If you wish to own a home at the right place where you want to live with your loved ones, that’s priceless. If you’re a person with big capital and have to create regular income, you can go head with this option to build a building and create business out of it. There are plenty of business opportunities in this financial instrument, having said that, let’s look into different ways to invest and earn from the real estate investment over the period.
Renting For Creating Business
In this world everybody is unique, everyone has different ideas, everyone like different things in their life, so it is important to what we like rather of regretting later stage of your life. I believe everybody should try to be an entrepreneur with their own unique idea to create a product or service which changes the life of people. If you take calculated risk and work hard in your early age to create new business, that is freedom. In major cities’ people usually rent a building near to IT(Information Technology) hub and start PG for men/women. Believe me, they earn income better than an IT company Senior Manager.
Similarly, renting a small place for you to create business is a very way to create a small business targeting particular customers. You can start a Hotel, Gym etc. The more creative you are, the better you generate revenue from a small initial investment. You rent it from someone and create a business that pays that rent and makes a handsome regular income.
Rental Property
In rental property investment think of it as you are build who construct multi apartment building, houses etc. Here, either you can sell the properties for higher profits, and also you can rent them to people for regular income. Typically, you can build 10-20 small homes/apartment and rent it for people. The same can be done with investing in flats, luxury buildings.
This domain is capital intensive initially, as you need a comparatively big capital to buy an asset that generates a continuous income stream. In this investment age come into picture where you can invest in other financial instruments like equity and mutual fund in your early ages and towards your old age you can plan to invest that capital that you made from other financial instrument into real estate for regular income when you’re no longer an employee who works for monthly income.
Owning Property
I bet you, that you sleep better the day you own your own HOME! When you have big capital with you and think that this is the time to settle with family and kids, you can own a sweet home for yourself. The other way of looking into this suppose you have big capital, and you don’t make that capital work to generate consistent income of least 10-12% every year, then owning a property is one of the good investments for your capital appreciation.
Guy’s it is always a good feeling that you have your own home of your choice architecture and interior designs. Moreover, that will be a nice place for your family and loved ones to spend time more relaxed. Yeah, you may not generate the same return from your home as compared to equity investment, but you need a place to settle also. It saves you the money you used to spend when you were living in rented apartments.
Owning Vacant Land
This segment in real estate investment where you have a good probability to make better returns in any sector of real estate. You buy a vacant land, restructure it, build a building, construct an apartment, sell it, rent it, both are good. They all generate income for you and the best part is you can make that as passive income where you can rent the houses for regular monthly rental income.
Guy’s I am a Farmer’s Son, I value this land for every breath I take. I see opportunities in agriculture very much, be it Vertical Farming, Hydroponics etc. Every human requires food, I can’t even starve for a single day. The new generation looks towards employment in various businesses. Why can’t we take different paths? If you are interested in farming, there is a good opportunity in the Agriculture Field to explore and make a living out of it.
Note: Guy’s I keep things simple here, I don’t keep noise here. We don’t talk about the properties which involves thousands of crores of money. We concentrate on educating retail people who can invest in the above domains in real estate that are realistic to retail peoples.
Note: Invest only when you can afford, don’t get into more debt which make your life tough.