Top 5 Methods for Investment in Real Estate

Top 5 Methods for Investment in Real Estate

Investment in real estate is one of the popular methods to accumulate wealth in a shorter time. All investments come with risk, and real estate is not an exception. However, real estate investment allows you to diversify your portfolio and get lucrative financial returns on the correct investment plans. Investing in real estate does not always involve buying physical property, and Land investment is the alternate method to make instant investments without much capital. Online real estate investment ensures periodic short-term income and long-term revenue generation while traditional investment, such as buying land or a house comes with long-term capital appreciation and a sense of accomplishment for the investors.

Exchange Traded Funds (ETF)

Unlike property investment, buying Exchange Traded Funds (ETF) and mutual funds invested in real estate is one of the easy methods to invest in real estate online. The house builder trades such ETF funds for income and shares the dividends with the investors. ETF pays quarterly dividends, and the investor generates the aggregated income while selling the appreciated shares. ETFs make the best real estate investing for beginners for a start before trying other methods of real estate investments.

Real Estate Investment Trust (RIET)

A real estate investment trust (REIT) is agencies that operate and invests in income-generating properties, and facilitates investors to invest and get a steady income through dividends. It is similar to mutual fund investment, but the investment is done on income-generating equity REIT, offers the comfort of investing in exclusive private real estate without buying physical property but earning high returns and this real estate investing for beginners offers monthly dividends to the investors.

The main advantage of REIT ETFs is that the equities are invested in a combination of well-paying ETFs. In this method, the investor gets the dividends derived from the multiple ETFs.

Real Estate Mutual Funds (REMF)

Real estate mutual funds are investments made with mutual funds, which are invested in real estate securities such as stocks, bonds, mutual funds, ETFs, and REITs, one of the popular methods of investment in real estate and offers the flexibility to sell anytime and get high returns while the market is up.

You can purchase real estate ETF, REIT, and Mutual Funds that are listed and traded on stock exchange platforms.

Having real estate MF makes the investment portfolio diverse and stable. Mutual fund with high liquidity is considered a flexible investment method compared to property investment and is a suitable choice to start with small captial investment.

Land Investment

Land investment is one of the classic methods of investment in real estate, and buying physical land is never out of trend. While investing in stocks and MFs gives high liquidity, physical land provides a sense of security and naturally offers high value for the investment. Investors who think stocks are riskier can invest in land to diversify their fund allocation. Unlike REIT investments, property investment comes with tax benefits via home loans.

It is hard to compare plots with ETF or MF as both have advantages and downside, which makes the investment decision, depends on the investor’s plans and budget. While ETFs and REITs are more suitable for small and mid-size investments, buying land as an investment requires more capital, and regular income is not feasible unless you have plans to rent it out for commercial and residential purposes. Investment property such as land comes with lesser risk than ETFs and offers mental peace, as the capital appreciation increases with time.

Pre-lease properties

Investment in pre-leased properties gives assured income from credible tenants and investors. Pre-leased properties offer earnings as well as returns with high capital value. One of the sure-shot methods of commercial property investment is land investment in Chennai and capital appreciation depends on market fluctuations and exit time.

Pre-lease properties are already leased land or building with tenants and render steady income for the owner, attractive returns with zero waiting periods for the investors and returns immediately after the sales. Having long-term goals for pre-lease properties provides high returns on capital investment. Due to high liquidity and low-risk, pre-lease land investment in Chennai is preferred among the high economic groups.

Lease /Rent a Property

Renting out a property is one of the methods of real estate investing for beginners as there is no need for capital investment and can utilize the existing property for passive income with a proper rental agreement that allows compensating for the wear and tear of the usage of the space. A building depreciates with time, and it is wise to make the most out of it in the form of rent. Villa plots for sale in Chennai is a great opportunity for investors with a plan to build a house on land for lucrative earnings!

In case of using the house as primary residence the owners can draw revenue by making accommodations in the unused rooms/floors for the individuals to stay as paying guests or for commercial usage by renting out the terrace for banners and other purposes.

Another method of land investment in Chennai is to allocate funds in the land to build residential/commercial spaces in the city and rent/lease them to tap handsome returns.

Read Also : The Best Investment Neighborhood’s in Chennai: Where to Buy for High Returns

Buy, Hold, and Sell (House Flipping)

It is similar to the stock market that the investor buys an investment property like land or building in Chennai or anywhere else only to sell it later when the market price goes up. House flipping requires expertise in the real estate market behavior and updated knowledge of the real estate to make the right decisions at the right time for heighten up resale value. An alternate method is to buy old properties and renovate them before selling them for a higher price.

Real Estate Crowdfunding

Crowdfunding is the best real estate investment in Chennai that anyone can invest in this method of real estate investment as the proposal is made to the public by private real estate ventures for fundraising due to insufficient funds. This online real estate investment method is suitable for investors who want returns as shares, dividends, and interests in case of debt funding and don’t want to manage a physical property but avail high liquidity and dividend. Moreover, investment property in Chennai is a great opportunity to diversify investments, and requires only low capital investment that offers ownership of property equity. Just like the investors share the profit, it facilitates shared and minimal risk for individual investors.

Real Estate Investment Groups (REIG)

REIG is a private investment group interests High-net-worth-individuals (HNWI) and allows revenue generation by strategically buying, renovating, selling, or financing private properties. It is one of the easy methods for best land investment in Chennai without the hassle of property management as in conventional property purchases and get good returns on equity investments. Is REIG a good real estate investment? RIEG can give lucrative returns as the funds are invested in versatile projects with a diverse fund allocation.

Real Estate Affiliate Program

Last but not least, a real estate affiliate program can be a good start for investors to take a safe plunge into offline real estate and learn the knick-knacks of the market before going for complex online investments. Real estate websites run real estate affiliate programs to connect with potential partners. These online platforms offers best real estate investment in Chennai with features that allows searching, listing, and comparing commercial/rental/residential real estate and the customers to earn through referral programs.

Key Points

Investment in Real estate is one of the methods to earn periodic income through owning a physical property or being part of real estate projects, as well as generating revenue as dividends and interests from the investment. There are multiple ways to invest in real estate while traditional investments range from buying physical land or commercial/residential investments like buying a house, apartments, hotels, etc., the best real estate investment in Chennai involves in investing in real estate stocks, mutual funds, and so on. Investors can invest through multiple methods discussed in this article depending on convenience and fund allocation for high revenue generation.