How to invest in real estate

Everyone has financial goals. And buying a house for the family comes somewhere at the top of the list for most Indians. This is a very important milestone when it comes to investment planning. However, the scope of real estate investment is more than that. In fact, investing in real estate offers an opportunity to make good financial returns. Here’s how:1) Rent a house (or even a room)Don’t know anything about real estate investing? Don’t worry. You can start small if you are a beginner. Do you have a spare room or an apartment at the moment? If so, you can take in tenants and earn a steady monthly income. This is a good way to earn returns on an asset instead of letting it sit idle. So, even if you earn around Rs 5,000-6,000 per month, it can become a substantial corpus by the end of a couple of years.

2) Buy, fix, sellOne of the best things about investing in real estate is that there are loads of opportunities. Look around your city. There can be a lot of underpriced homes. For example, imagine you find an old house that is in a good area in the city. Here is what you need to do:

Many people call this as house-flipping.

3) REITsYou can also invest in real estate through Real Estate Investment Trusts (REITs). These are companies that own commercial real estate such as apartments, hotels and retail spaces. All REITs are listed with the stock exchange and investors can directly invest in properties. Buying commercial real estate can be extremely costly and out of the reach of regular investors. Through REITs, you can participate in ownership of commercial real estate without having to actually buying commercial real estate. As a result, investors with budgets as small as Rs 2 lakh can explore the real estate sector and make profits.

4) Real estate stocksWhat if you don’t want to invest directly in real estate properties? Well, there is another way. You can invest in stocks that operate in the real estate sector. There are a lot of real estate companies such as DLF, Oberoi, Unitech that are listed in the stock market. By carefully researching these stocks, you can invest and earn good returns. ConclusionThese days, there are lots of investment opportunities for investors in the real estate sector. India is a developing country and there is huge potential for real estate. And the best part is, you don’t actually have to buy a house to invest in real estate!

Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing.