Real estate has traditionally been an avenue for considerable investment per se and investment opportunity for High Net-worth Individuals, Financial institutions as well as individuals looking at viable alternatives for investing money among stocks, bullion, property, and other avenues.

Money invested in property for its income and capital growth provides stable and predictable income returns, similar to that of bonds offering both a regular return on investment if the property is rented as well as the possibility of capital appreciation. Like all other investment options, real estate investment also has certain risks attached to it, which is quite different from other investments. The available investment opportunities can broadly be categorized into residential, commercial office space, and retail sectors. 

Investment scenario in real estate

The maturity period of property investment is uncertain. The investor also has to check the clear property title, especially for investments in India. The industry experts in this regard claim that property investment should be done by persons who have deeper pockets and a longer-term view of their investments. From a long-term financial returns perspective, it is advisable to invest in higher-grade commercial properties. Real Estate Submit Guest Post Blog is a fantastic method to share your knowledge and experience.

There is also a demand and need from different market players in the property segment to gradually relax certain norms for FDI in this sector. These foreign investments would then mean higher standards of quality infrastructure and hence would change the entire market scenario in terms of competition and professionalism of market players.

Investor's Profile

The two most active investor segments are High Net Worth Individuals (HNIs) and Financial Institutions. While the institutions traditionally show a preference to commercial investment, the high net worth individuals show interest in investing in residential as well as commercial properties.

Apart from these, is the third category of Non-Resident Indians (NRIs). There is a clear bias toward investing in residential properties than commercial properties by the NRIs, the fact could be reasoned as emotional attachment and future security sought by the NRIs. As the necessary formalities and documentation for purchasing immovable properties other than agricultural and plantation properties are quite simple and the rental income is freely repatriable outside India, NRIs have increased their role as investors in real estate

Advantages of investment in real estate

The following are the advantages of investing in Real Estate Investment Schemes

•        As an asset class, the property is distinct from the other investment avenues available to small as well as large investors. Investment in property has its own methodology, advantages, and risk factors that are unlike those for conventional investments. A completely different set of factors, including capital formation, economic performance, and supply considerations, influence the realty market, leading to a low correlation in price behavior vis-à-vis other asset classes.

•        Historically, over a longer-term, real estate provides returns that are comparable with returns on equities. However, the volatility in prices of realty is lower than equities leading to better risk management to return trade-off for the investment.

•        Real estate returns also show a high correlation with inflation. Therefore, real estate investments made over long periods of time provide an inflation hedge and yield real returns