Real estate has traditionally been an avenue for significant investment per se and investment opportunities for High Net-worth individuals, financial institutions as well as individuals looking for viable alternatives for investing money between stocks, bullion, property and other ways.selling a home has some nice tips on this.
Capital invested in property for its income and capital growth offers stable and consistent returns on investments, close to that of bonds providing both a daily return on investment when renting property and the prospect of capital appreciation. As all other investment choices, it also has some risks attached to real estate investment which is very different from other investments. The investment opportunities available can be loosely classified into the residential, commercial office space and retail sectors.
Scenario for real estate transactions
Any investor will consider the risk involved in that investment before considering real estate investments. This investment strategy requires a high entry price, lacks liquidity and an unpredictable gestation period. To be illiquid, one cannot sell some units of his property (as one might have done by selling some units of equities, debts or even mutual funds) in the event of an urgent need for funds.
The maturity period of investment in the property is unknown. Investor must also check the clear title of the land, particularly for the Indian investments. In this regard, the industry experts believe that investment in property should be made by individuals with deeper pockets and a longer-term view of their investments. From a viewpoint on long-term financial returns, investment in higher-grade commercial assets is advisable.
Over the longer term, the returns from the property market are equivalent to those of some equities and index funds. Any investor looking to balance his portfolio can now look at the real estate market with a certain degree of uncertainty and risk as a secure means of investments. Hence, a right occupant, venue, Indian property market segment categories and individual risk preferences will prove to be key indicators for achieving the investment target yields.
The proposed implementation of REMF (Real Estate Mutual Funds) and REIT (Real Estate Investment Trust) would improve these investments in real estate from the perspective of the small investors.