Top 5 Approaches To Invest In Real Estate Without Buying A Property

Real estate investment is generally related to hefty capital investment. However, the lack of such an amount may not essentially mean that one cannot invest in the sector. With new trends making progress in the industry, there are now various ways to invest in real estate apart from obtaining a physical, immovable property. Real estate investments do not automatically involve property possession. There are plenty of other prospects that allow investors to gain the profits of real estate appreciation, without the need to shoulder the continuous tasks of building maintenance.

Investors who select to invest in real estate beyond the traditional sense of buying property, have the choice to invest across multiple sites and property sizes along with different classes of real estate. While these steps may serve as precursors to potential property-owning in the future, you may also find the returns from these realty investments gripping enough to avoid buying property overall.

Real Estate Investment Trusts (REITs) is a specific company that makes debt and equity investments in commercial real estate. Introduced in the year 1960 for the persistence of allowing investors a chance to invest in real estate as an asset class, REITs are recognized to offer a minimum of 7-8% of annual return to small and mid-level depositors. Similar to a mutual fund, REITs investors hold shares of REITs and earn returns in the form of dividends, liable for the performance of the REITs investments.

Parth Mehta, Managing Director of Paradigm Realty, asserts that REITs are going to revolutionize the Indian real estate market. They assist sponsor assets through faiths and let investors become the owners of varied properties, even though they may not be able to purchase the asset merely. As per REITs guidelines, at least 80 percent of the value must be invested in revenue-generating assets, whereas, the enduring can be invested in under-construction projects. REITs are mainly favored by those looking for higher income and long-term growth.”

For those who don't want to make a significant financial commitment, real estate wholesaling is a decent entry point. It is a form of property tossing where the investor, also known as the wholesaler, enters into an agreement to buy a property that they trust is under-priced. The property is then vended to the end user at a profit. The process aids a beginner to gain insight into the real estate market and inculcate negotiation skills. The wholesaler gets revenue in the form of a fee that is close to the transaction, usually a certain percentage of the overall property price.

Investing in real estate mutual funds is helpful to diversify your investment portfolio. The concept is parallel to a mutual fund where the investor owns a share of the mutual fund while the company itself owns the investment that it brands. The earnings are in the form of a bonus or a certain amount of share appreciation. Real estate mutual funds mainly invest in REITs, real estate stocks, and direct purchases of residential, commercial, and industrial units. The choice is measured favourably for small investors who shy away from selling in real estate directly. An important point to reflect here is that the earnings from real estate mutual funds be contingent on several factors, including demand and supply demographics, market conditions, and interest charges.

“For potential investors who want to benefit from the appreciation in the real estate market but do not have the money to purchase a home, particularly in cities like Mumbai and Delhi where property costs are astronomically high, real estate mutual funds are a suitable investment option.” avers Amit Desai, Owner, Prop invest Realty.

Online real estate investment platforms pool funds from several investors and invest on their behalf in prospects that otherwise would be luxurious to explore. These range widely in terms of investment helps property types and the minimum investment amount. With a focus on both residential and commercial real estate, the online platforms afford investors access to invest in a single property or an assortment of expanded real estate options. However, the medium is best suited for those who can afford to continue with their investments continuously for an extended period of time.

A hard money loan is a personal loan given to a real estate investor. Also said as bridge loans, hard money loans refer to short-term loaning to finance an investment project. The loan is afforded on the basis of the value of the property protected. Usually, the lender affords credit up to 65-75 percent of the property value and earns by way of interest, which is typically higher in comparison to conventional property loans.

Apart from the above possibilities, investors can also study utilizing their secondary property for rental income. But, for a complete amateur, it is always desirable to consult realty and seasoned legal experts before taking the fall.

The best way to grasp the art of moneymaking through real estate is to learn from industry entrepreneurs. And after much research, we can safely say that one of the most important rules of investment in real estate is to make a strategy, do your groundwork best, and make a strong foundation.