How can A First Time Buyer Make Money from Real Estate?
May 22, 2017 Real Estate News
Investing in real estate is the sure shot way of getting better returns. The increasing prices of properties across the country make it an easier investment option. Real estate is one such investment sector which does not have any set parameter or any budget restriction for that matter. The market is liberal and the investor can sell or lease the property at their own will to get better higher returns.
Even though it is an easier option for the investment, beginners get confused as to how to proceed and pick out the right property.
REITs:
Real Estate Investment Trusts have recently gained popularity in India, though they have been used worldwide for some time now. REIT is the trust that puts the funds of various investors in income generating properties like offices, residential spaces, hotels etc. These are then listed on the stock exchange so that the interested buyers can buy the units in the trust. The trustee holds the assets on the behalf of the unit holders. They are similar to the mutual funds and bonds.
REITs are listed on the stock exchange; the funding is raised by the holders through the Initial Public offering (IPO). The money is used by the trust to buy the property. The property is the leased and the monthly rent flows back to the investors as the returns. This method was first started in America and then later adopted by different countries. It has effectively helped in generating better returns to the investors.
Those who want to invest in the property but want to avoid the direct ownership, investing in REIT is the right answer.
Direct Ownership:
Direct ownership means buying the house yourself, paying the EMI associated with it and doing all the paperwork. The most prominent method of generating a return from a property is to rent it. The rent helps in paying the monthly EMI and after a certain amount of time when the EMI is completed; the owner can sell the property and get a higher return than invested. The prices of property keep increasing with time. But the buyer should make sure to check the background of the person they are renting out the property.
Another method is to invest in the under construction or just launched projects. Though the risk associated with them is higher but after the project is completed they can be sold off with higher returns. Before investing in them makes sure to check on the background of the developer and the type of the construction.
Even though it is an easier option for the investment, beginners get confused as to how to proceed and pick out the right property.
REITs:
Real Estate Investment Trusts have recently gained popularity in India, though they have been used worldwide for some time now. REIT is the trust that puts the funds of various investors in income generating properties like offices, residential spaces, hotels etc. These are then listed on the stock exchange so that the interested buyers can buy the units in the trust. The trustee holds the assets on the behalf of the unit holders. They are similar to the mutual funds and bonds.
REITs are listed on the stock exchange; the funding is raised by the holders through the Initial Public offering (IPO). The money is used by the trust to buy the property. The property is the leased and the monthly rent flows back to the investors as the returns. This method was first started in America and then later adopted by different countries. It has effectively helped in generating better returns to the investors.
Those who want to invest in the property but want to avoid the direct ownership, investing in REIT is the right answer.
Direct Ownership:
Direct ownership means buying the house yourself, paying the EMI associated with it and doing all the paperwork. The most prominent method of generating a return from a property is to rent it. The rent helps in paying the monthly EMI and after a certain amount of time when the EMI is completed; the owner can sell the property and get a higher return than invested. The prices of property keep increasing with time. But the buyer should make sure to check the background of the person they are renting out the property.
Another method is to invest in the under construction or just launched projects. Though the risk associated with them is higher but after the project is completed they can be sold off with higher returns. Before investing in them makes sure to check on the background of the developer and the type of the construction.
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