Investing in real estate could be a big bet if the market is not studied properly. But if one has taken all the factors in consideration and analyzed the past and prevailing trends along with the future predictions, getting double the returns could be a near reality. Yes, real estate is the most lucrative market. Yes, it can fetch double the money that you invest. The only thing needed is finding the right property to invest and giving it enough time to mature. If you also plan to get higher ROI on your investment in real estate, here is how you can double it.
Find A Zone With High Returning Potential
Location plays a key role in determining the return potential of any property. Finding the right area for real estate investment is imperative for ensuring good returns. There are many factors that determine the returns of a property- type of projects, local transport, social development like hospitals, schools, shopping complexes, etc. For those investing in commercial real estate, distance from the city centers, connectivity, etc., are important factors. There are many localities in India that are gaining pace as great real estate investment hubs.
Cities like Bangalore and Pune have come out as promising on the price index and capital appreciation chart. The government has made property in Dholera SIR (Special Investment Region) investment-friendly. It is expected to garner an investment worth of INR 1 lakh crore in the coming five years. Investment in Dholera real estate or in the real estate of any other investment-friendly city can promise you higher returns. So, the first tip is to find the right investment zone. You can study the government plans & initiatives and identify the development scope of the region. Further, analyze the appreciation rates, future predictions by real estate gurus, and current market supply and demand as well.
Know What Type Of Real Estate Investment You Want
When it comes to real estate investment, there are different types of investments that one can make to have a great return. There are three main types of investment in real estate that a person can make to even double his/her return in a short time. These are:
- Rental Property: One of the most common types of real estate investment is setting a property up for rent. This ensures a steady flow of income every month. You can even use it for paying off the mortgage and later as monthly income. To ensure double returns from your rental property, you can rent out separate rooms individually. This fetches higher income. You can also find a property that is near educational institutes. And set it as PG to yield more rent from individual students.
- Fix & Flip: This technique is very popular among the real estate players who understand the working of the real estate market. This technique requires purchasing a property, giving it a new touch through renovation and remodeling and upselling it at a higher price in a short time. Properties that require renovation are usually available at a lower price but you need to put in some extra bucks in revamping the home.
- Real Estate Investment Trust: REITs are similar to stocks. Investors invest their money in different commercial real estate properties to get regular income out of it. These properties are built by corporations through investor’s money. They usually pay 90% of the profits as dividends to the investors. The real estate investors get regular income without actually making any traditional type of real estate transaction.
Choose The Property Type Wisely
All property investors should know what type of property they want to invest in. The two major categories that pop up here are commercial real estate and residential real estate. While residential real estate has always been a favorite among real estate investors, commercial real estate investment is gaining fast popularity in India. The stable income through long leases, increasing demand of office spaces, higher rent, and lower maintenance due to leasing are some reasons why commercial real estate is more attractive. The residential real estate in India is also gaining its momentum back after a dull period post demonetization. One needs to measure all the pros and cons of investing in residential and commercial property before finalizing their decision.
Make Real Estate Investments Without Buying Property
While majority of the real estate investors believe that buying property is the sole way to make investment, the pros feel investment can be made without making any purchase. For those who do not have the required capital to buy property and are not inclined to getting a loan, there are different investment options that can offer high returns. These are:
- Real Estate Investment Trust: Buying shares in REITs is a lucrative investment that lets you diversify your real estate portfolio. It lets you invest money into real estate without actually buying property. REIT is a company that finances or owns different types of income-producing properties in real estate industry. You get the real estate exposure and over 90% of your investment in forms of dividends.
- Real Estate ETF: Real estate Exchange Traded Funds (ETFs) are the companies that are investing in REITs. Through real estate ETF, you are indirectly investing in REITs and with a lesser risk.
- Real Estate Mutual Funds: Having low capital and want it to double in a short time? It can be achieved with real estate mutual funds. Choose from growth-oriented or income-oriented. Moreover, real estate mutual funds mitigate risks and help you get higher returns, sometimes even double if done smartly.
Buying investment property is one of the most effective ways to get higher returns. But you cannot neglect proper calculations and studies in this department. Studying the property investment data should be a top concern of the property investors to know the market properly before making an investment decision. Also getting professional assistance could make it easier to calculate returns more precisely.
Anurag Gupta writes for RealEstateIndia.Com and keeps a keen eye on the real estate trends in India. He has written various informative posts on the realty landscape across major cities in the country. and has extensive knowledge of all property sectors, and related issues like building, construction management, financing, etc. He has a nose for the news associated with Realty Sector and shares actionable advice for prospective buyers and investors enabling them make smart, informed decisions rated to property buying and selling.