If we go by the words of the famous industrialist Andrew Carnegie, ninety percent of all millionaires become wealthy through their real estate investing history, and more money is made in real estate alone than all other industries combined.
What is Financial Freedom for You?
While for a teenager it could mean not having to depend on their parents for everything, for a 25-year-old, it might be the dream to retire early, for me it’s being able to focus on my hobbies and pursuing my dreams without worrying about the daily expenses. The definition of financial freedom is different for different people, but at the end of it all, it is reaching a point where one doesn’t have to worry about daily finances and being able to support our family irrespective of the circumstances.
There are many different routes that one can take to grow their wealth but one of the best routes is through real estate investing.
Why invest in real estate?
Real estate is an asset class that has long been used to build wealth. Real estate investment in India especially has always been considered the ideal use of one’s lifetime’s worth of saving because a home provides both shelter and appreciation to your assets.
But then again, why should you invest in real estate and not any other asset class? That is because while you can make money through other investments such as stocks and mutual funds, there are some benefits that you can only enjoy in real estate.
Benefits of investing in real estate
- Inflationary Hedge
Real estate is the only investment out there that is to some extent, inflation-proof. When the prices of commodities rise, so does the price of your property and if you have rented out the property to someone, the rent will also rise.
- Market Volatility
As the pandemic brought the stock market to its knees, we knew one thing for sure, the share market, stocks, and mutual funds were not ideal investments in a volatile market, and while real estate had also suffered due to the lockdowns, the investments were in a far better shape than all other popular investments.
- Long-term financial security
One of the first steps towards financial freedom is ensuring long-term financial security. As real estate gives you a steady cash flow along with long-term asset appreciation, this is a great long-term investment.
- High returns and steady income
Real estate rental properties both commercial and residential can be a great means of building a steady and regular income. If you have multiple properties you can also hire asset managers to make the process easier.
You can earn high returns on your property in the long term as well as short term. Fractional ownership of real estate is a means of investing where you can enjoy great investment deals in Grade-A CRE properties.
As these are more of an investment in shares than the property as a whole, these are also highly liquid investments. Assetmonk, a leading WealthTech platform offers up to 21% annual IRR on its properties.
How to invest in real estate?
While real estate is a great income generator, most people don’t know how they can begin their investment journey, and so here is our top advice on what you can do to begin your investments.
– Set clear goals and create a plan
There are many different investment strategies and properties you can invest in. So it is best advised that one has a clear goal and clarity of thought before they move on with the investment.
When you have a clear goal, then we can move to the second step of investment which is creating a foolproof plan of action. Start with determining the type of property you want to invest in. Whether you want to manage the property on your own or you want to make a passive investment and how will you finance your investment.
– What options do you have
There are many different forms of properties you can invest in, both traditional and modern, here is a list of some of the best performing real estate investments in India.
– Commercial Real Estate
CRE includes properties like warehouses, retail buildings, and commercial offices. These investments can give very good financial returns if located in the right location at the right time.
Owing to the pandemic, many MNCs moved their bases from China to India, this has, to a large extent, raised the demand for CRE properties in India in addition to the previous developmental process which was already in action.
As Indians were familiarizing themselves with new concepts such as coliving and coworking, this had already made corporate real estate investments very profitable in the long run.
– Real Estate Investment Trusts
REIT is a company that manages and operates income-producing real estate properties. This is a modern-day investment option that allows you to invest a low amount and earn high returns.
– Fractional Ownership of Real Estate
This is a great investment option if you are looking for a regular passive income. Fractional ownership is an investment where you purchase a part of any high-end property and earn appreciation and regular returns from your share in the property.
You can invest in fractional properties through various investment platforms, Assetmonk is a popular investment platform that allows you to invest in a hassle-free manner, as the company performs all legal and contractual proceedings on behalf of the investor, you can sit back and relax as you watch your money grow.
– Real Estate Crowdfunding
We understand that passive sources of income are gradually gaining importance due to various reasons. Real estate crowdfunding is also a means of earning passive income without having to worry about your investment and working day and night for it.
Just like fractional ownership and REITs, real estate crowdfunding is also an online investment, where you can invest small amounts and earn regular income in form of monthly returns. With Assetmonk you can invest an amount as small as Rs. 10 lakh in high-end CRE property to earn CRE grade returns.
– Fix-and-flip Properties
While it is still new to the Indian investor population, fix and flip is one great way of building wealth. Here you purchase an old property at a low rate, renovate it to increase the market value, and sell it off. The difference between the cost and selling prices is your profit earned.
– Rental Properties
Rental properties are one of the oldest real estate investments that we’re all familiar with. If you have an unoccupied property that you would like to make money from without selling it, you can easily rent to a tenant. This helps earn regular income along with the value appreciation of your property.
While these are some steps and advice that you can follow to make a successful real estate investment, your knowledge of the market should also keep increasing from time to time. You don’t need to become a real estate agent to be a good investor, but you will need to be well aware of the market trends.
An educated investment is the best investment, so don’t shy away from gaining knowledge and asking questions you can also get an advisor or manager to help you out with your investments, but if you are approaching real estate platforms such as Assetmonk, they will provide you with fund managers and investment experts from the company itself so that you don’t have to worry about your investments at all stages.