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Investing in real estate as a beginner? Possible without buying property say experts | Image:Pexels
Investing in real estate: Buying a piece of property may not really be the only way to invest in real estate. Investing in real estate has become accessible for even those with limited fund, with the usage of multiple market instruments. The best of this being the possibility of reaping benefits without incurring a loan burden.
“You can find many ways to benefit in the real estate market without purchasing a property. You can park money in other avenues of real estate without purchasing a home like REITs, fractional ownership, or real estate bonds, to name a few,” Gunjan Goel, Director, Goel Ganga Developments told Republic.
“Before investing in real estate, extensive study and guidance from financial specialists are critical to effectively manage risk, especially as real estate markets often fluctuate,” Goel added.
Real Estate Investment Trusts (REITs)
According to experts, one of the most viable options is Real Estate Investment Trusts (REITs). These specialised companies make debt and equity investments in commercial real estate projects. REITs allow investors to hold shares in real estate assets, earning returns in the form of dividends based on the performance of the investments. With an average annual return of 7-8 per cent, REITs have become an option for small and mid-level investors seeking long-term growth.
“Through REITs, investing in income-generating properties across various industries is a practical option to enjoy rental income and property appreciation without the hassle of physical ownership,” said LC Mittal, Director, Motia Group.
Real estate wholesaling
Real estate wholesaling provides a way for individuals to enter the market with little investment. Investors, known as wholesalers, identify undervalued properties and enter agreements to purchase them. They then sell the properties at a higher price, earning a fee attached to the transaction.
Investing in real estate as a beginner? Possible without buying property say experts | Image credit: Pexels
Real estate mutual funds
Investing in real estate mutual funds allows for portfolio diversification. Similar to regular mutual funds, investors own a portion of the mutual fund, which invests in real estate stocks, REITs, and direct purchases of residential, commercial, and industrial units. Real estate mutual funds are favoured by small investors who prefer not to engage directly in real estate transactions.
“Real estate-related mutual funds offer returns closely tied to the state of affairs in the real estate industry, making it accessible to a wider group of individuals through smaller contributions from investors,” Goel said.
Online investment platforms
Online real estate investment platforms pool funds from multiple investors and invest in opportunities that may otherwise be expensive to explore individually. These platforms offer access to both residential and commercial real estate investments, providing a diversified range of options.
“Making investments in publicly listed real estate businesses, including homebuilders, developers of real estate, as well as property management firms, can give exposure to the market without possessing actual assets,” said Mittal.
“Investors can use property crowdfunding portals to make investments in particular residential developments or buildings alongside other investors. For the purpose of financing a real estate project or investment, these platforms aggregate funds from different investors. It’s an excellent means to get started in real estate with a lower investment,” Mittal added.
Options like Real Estate Investment Trusts (REITs), real estate wholesaling, mutual funds, online investment platforms, and hard money loans offer alternatives to traditional property investments. As per the experts, aspiring investors can choose from these opportunities based on their financial goals and risk tolerance. However, it is essential to consult with financial advisors and industry experts to make informed decisions and navigate the real estate market successfully.
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This article was originally published by a www.republicworld.com . Read the Original article here. .