Making Money From Real Estate

Posted on Oct 8 2014 - 5:27pm by Editorial Staff

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In India, property purchases have always been considered auspicious. Most middle-class families save up and then invest in land purchases in their hometown where they construct retirement homes. After retirement, they usually relocate from large urban cities to smaller second tier or third cities to enjoy a simpler, relaxed lifestyle. However, the actual profile of property investment has changed in modern India, states BusinessToday. Initially, where most families used to invest in a single property or land deal as a part of retirement, now people prefer to buy several properties and then use them as ‘money-spinners.’ There are many ways by which this is done and a few of the more popular options are listed below.

Making Money through Types of Properties

As an investor, the aim is to make maximum profits by investing and flipping as quickly as possible. As a result, there are main investment options you can choose from to make an easy income. A few of the most lucrative options include the following:

  • Land – Land purchases are probably the most affordable and lucrative investment option open to investors. However, most urban cities are already explored to the maximum. First tier cities like Mumbai, Bangalore and Chennai have no more land inside the city but they are actively expanding along the peripheries making them great investment options. For example, the NCR region of Delhi is great for investment while Mumbai is seeing expansion along its boundaries into New Mumbai, Panvel, Thane, etc. These areas still have land parcels open for investment and they are more than likely to double or triple in value over the years.
  • Farm investing – Land in rural areas with running farms are great investment options. However, agricultural land does have development restrictions and it cannot be used to set up commercial or private properties. Make sure you research the area and the rules before you invest in agricultural or actively producing farms.
  • Small apartments or buildings with commercial and private apartment’s less than three floors – These investment properties are great as you can rent out the properties or sell the properties for an affordable rate to make a profit.
  • Auctioned properties – The Indian real estate market did face problems during the recession and banks were left holding commercial and residential properties that defaulted on their loans. These are great investment options as the bank is usually willing to refinance the property or sell it quickly as a discount.

Please note that there are many such properties available in different real estate markets in India. However, before investment you should make sure that the property is legally and finally clear of any problems. Make sure you also check the local market for its property values before you buy anything, states LiveMint.

Making Money by Investment Methods

Now that you know the most popular investment options, it comes down to actually making a profit from them. The most popular option now is to renovate homes and sell them for a profit. For example, buyers invest in distress sales or auctioned homes and then resell them for a profit. It is also possible to buy and hold homes for a profit. Buyers may invest in an expensive home in a prime locality and then hold it until the area rates double in value. The property can then be rented, leased or sold for a profit. Lease to buy options are also very popular with investors. Investors lease properties and make a monthly payment to the owner. During this time, the renter can use the property or sublet it for rents. The rental payment is then added to the monthly payment and is considered upfront payment towards the purchase price. This works out very well for the buyer and the seller as gradual payments are made and the property remains occupied. Direct rentals are also a great way to make money on a property. Owners who want long term income can buy ready properties and then rent them immediately for a steady income. Most Indian property owners prefer this income method as it is safe, and provides a ready source of income for the owner, according to IndiaToday.

The idea of getting easy money from property investments sound alluring but it is necessary to be careful, cautions BusinessToday. The property market is fluid in India and there are several builders and developers building properties. It is very necessary to choose a reputable builder like the Unitech Group. Such builders have a solid reputation for safe constructions in an affordable price range and they are very safe investment options. As an investor, the onus falls on you to choose reputable builders for investment and then make sure that your property starts paying dividends as soon as possible.

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Editorial Staff

Editorial Staff at I2Mag is a team of subject experts led by Karan Chopra.