HOW TO INVEST

What is a Real Estate

Homes, offices, or other land or buildings that you can invest in. An investor might choose to invest in a house if he thinks it is in a market where property values will rise in the near future. There are many ways to describe real estate markets, including “hot” versus “flat” or “rising” versus “falling” or “buyer’s” versus “seller’s.” All real estate markets are subject to fluctuations; but these fluctuations typically do not greatly influence the ability for the informed investor to make a profit.


What is the ideal market for investing?

Let’s be clear: There is no such thing as an ideal real estate market for investing. It tends to be more difficult to find bargains in rising markets, however, because if the market keeps rising, the probability of selling the property quickly for a large profit increases. In contrast, when property values are falling, more "bargains" become available.

Yet you need to assess the true value of these properties based on when you expect to sell the property. Thus, your purchase must be made at a steep discount to allow for a profitable sale later.


There are no perfect investment avenues and real estate investment is no exception. For each advantage there is for tying your money up in investment property, there is at least one disadvantage. It is important that you go into any venture with your eyes wide open and with your vision not clouded by those who would make you believe that it is the easy way to riches. It may be a great way of increasing your net worth, but it is not necessarily quick and rarely is it easy.

Take a minute to review some of the advantages--and the disadvantages--of investing in single family real estate.

Investments Option


A recent report by the Chamber of Indian Industries pointed out that globally real estate is and should always be considered as an income-generating asset. Indeed, real estate is an attractive investment option, as it gives regular returns and also provides capital appreciation. This scenario is presently unfolding in India.

But, those days are gone with the crash of the housing market in the mid 1990s. The higher the rise in real estate prices, the steeper the fall. This was true, especially, in the metros, e.g. Mumbai and New Delhi. The supply increased enormously and the demand remained steady, as prices had gone beyond the realistic levels. This decline in prices stabilized towards the end of the decade as rates became more reasonable and affordable. In the meantime, the housing finance industry started to expand rapidly, making home loans easily available to everyone. Besides the housing loans boosting the market demand, the tax benefits provided by the last four consecutive budgets have also encouraged the end-users and investors alike. Growing incomes of urban buyers coupled with fiscal incentives and falling interest rates, has seen disbursements by Housing Finance Companies grow at over 35% per annum in the past few years.

Ensure that there is scope for infrastructure development around the property under consideration. Another factor is the location and the proximity to schools, hospitals, markets, public transportation, etc. Check out the rental returns and capital appreciation potential in the area where the property is located. Actual property taxes to be paid.