Monday, 28 December 2015

Does It Make Sense for Me to Invest in Real Estate?

According to the Ministry of Commerce, the Indian Real Estate market size is expected to reach $180 billion by 2020 from $93.8 billion in 2014. The government approved 100 smart city projects in August this year. Demand continues to be high in the face of supply for real estate across the country. In fact, along with equities, investments in the real estate sector have provided the highest returns reaching 20% over the last two decades.

Real estate will continue to appreciate as long as India’s human capital continues to expand and the GDP growth rate stays positive.

real estate investment
real estate investment

Is the Real Estate Market a Cause for Concern?

If you think that you should not now invest in residential property because markets have yet to correct themselves or that builders have been sitting on a large pile of unsold inventory and that the weak global economy restricts FDI flows into employment generating sectors then you could be in for an indefinitely long wait.

The soon to be implemented Real Estate Regulation and Development Bill 2015 is further expected to lift consumer and market sentiment.

It is true that the real estate sector has been hampered by fraud and red tape but proper care and precaution while making the purchase can ensure that you do not miss out on the opportunity to partake of the unparalleled returns.

real estate fund in India
real estate fund in India

Real Estate Investment Tips

·         The past record of a developer and the number of completed projects on time is a good indicator of whether a developer can be trusted or not.

·         That the location of the property in question drives prices is one of the most sound real estate investment tips you’re likely to hear.

·         As land acquisition continues to be controversial, real estate funds in India are a great alternative to owning a property. A Private Equity Fund works just like a Mutual Fund by letting experts handle the veracity and credentials of an under construction project. You also get the benefit of certain returns without taking the risk involved in a single project.

·         The capital involved in a real estate fund in India is also less than that in buying a property.

·         Investing in real estate should be looked at from a long term perspective. Hold on to your property for say 10 years and you will notice the power of compounding growth rates that give spectacular returns.

Property rates in favored locations in New Delhi and Mumbai are one of the highest in the world. Remember that real estate funds in India provide returns higher than gold or silver and are less volatile than equity. Economic growth in India is expected to continue and consumerism set to rise. It is best to buy before the market reaches its peak as by then you cannot hope to earn any higher returns on your investment.

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