It's no secret that many people nowadays are exploring various avenues in their pursuit of financial independence. The days of relying solely on one's salary and conventional savings to fund one's old age are over. Many people today are looking to diversify their income streams and increase their wealth through multiple investments.

As a result of its high return on investment value, the Indian real estate industry is flourishing and has become a part of many successful investment portfolios. According to one estimate, homes in India account for 77 percent of the average family's wealth. Because of this, anyone interested in boosting their financial standing should think about investing in Indian real estate.

Real estate is one of the most rewarding investment opportunities for customers across demographics and geographies, whether they are senior citizens, middle-aged consumers, or young millennials. The article discusses five different types of real estate assets that investors should consider including in their portfolios.

Renting The Property

Buying houses to rent out has long been the most common method of investing in real estate. Although the procedure itself is straightforward, there is a significant upfront investment required, as well as ongoing costs associated with keeping it running smoothly and reliably. First, the property must be checked for any legal issues; then, it can be leased, purchased outright, or financed.

Property flipping

Another alternative is house flipping, in which a person who is aware of market demands can renovate and improve an existing property and then sell it for more money. Here, the consumer requires money as well as the capacity to perceive, comprehend, and make repairs as necessary. As the capital is only committed for a little time, in this case, a speedy return might be possible.

ETFs/REITs

You can acquire mutual funds and exchange-traded funds that invest in real estate. You can buy ETFs that invest in real estate businesses, such as publicly-traded home builders. Moreover, there are ETFs that invest in Real Estate Investment Trusts. The idea behind a REIT is quite similar to that of a mutual fund; both collect money from numerous participants and invest it in properties that produce income. The returns are paid out of the monthly rent from the purchased homes.

Fractional ownership of commercial property

The term fractional ownership of property refers to a group of investors pooling their finances to jointly purchase real estate in order to share the rental revenue and lessen the cost burden and risk exposure.

The volume of Grade-A office spaces in India will reach 1 billion square feet by 2025, according to projections by industry professionals. The majority of this investment would concentrate on fractional ownership.

At around 9 percent each year, the annual rental yield of a commercial property is greater than that of a residential property. Hence, an INR 25 lakh investment in fractional ownership has the potential to generate Rs 2.25 lakh annually in rental revenue. This results in a consistent increase in wealth and enhanced monthly liquidity.

Subletting a part of an existing property

Even if a person does not wish to incur a substantial initial investment cost, he or she can begin by renting a room to commercial or residential tenants. It is preferable to rent out an entire room of one's current home if it is vacant.

What is the best option?

With a variety of real estate investment opportunities accessible, options must be determined by the amount of capital one is willing to invest, the type of liquidity desired, the consistency of cash flow, and risk tolerance.

Ask yourself: What's the aim of my investment?

Your investing goals will be a major factor in deciding what kinds of real estate investments will be most successful for you. While those searching for capital appreciation are more interested in purchasing real estate in emerging neighborhoods, those interested in renting out their investments are more concerned with finding a location that is convenient for their tenants' needs. Remember your end aim when looking at investment properties. This will help you make good choices that move you closer to your goals.

Large investments and asset-class knowledge are needed to own, rent out, and flip properties. While flipping homes can yield great returns on investment, it necessitates a thorough awareness of the local real estate market as well as specialized knowledge and maintenance expenditures.

ETFs, on the other hand, provide high liquidity and low expenses, but a drawback is that there may not be any monthly dividends and one may not receive any profits unless one sells the appreciated shares.

While being relatively new to investors, REITs and fractional ownership of commercial buildings are gaining popularity because they have finally allowed individual investors access to the most intriguing asset class i.e. commercial real estate.

Even if CRE can produce strong profits, it is a costly investment. Yet, REITs and fractional ownership have lowered the barrier to entry in CRE, acting somewhat like real estate crowdfunding.

With fractional ownership, one can anticipate an annual rental yield of 8 to 10 percent and a 5 to 10 percent annual increase in the value of a commercial property. The comparisons imply that making an investment in commercial real estate as a fractional owner can result in longer-term, more consistent returns.

To conclude, you can choose from any of the real estate investment avenues depending on your investment goals. But, the most important point is having a place you can call your own so that you can further utilize your time and capital in other real estate investments. To make sure your residential real estate investment is a good one, you can rely on Dwello. Be rest assured and start your investment journey today!