In recent times, investment in real estate space has emerged as one of the most lucrative forms of increasing ROIs and earning profits due to rapid urbanization happening in Tier 1 and Tier 2 cities across the country. Many seasoned investors have real estate property investment in their portfolio because they know the kind of value it brings. But what if someone new wants to enter this space? How should the beginners go about investing in the ever-changing Indian real estate sector?
In this blog, we will navigate through the intricacies of the real estate market and the critical strategies an investor who is on a beginner level can employ to make informed decisions and remain profitable when it comes to real estate investments. Whether you are looking to generate passive income or build long-term wealth, these strategies might help you get started with the right way to build your real estate investment portfolio.
Overview to Property Investment Strategies
Embarking on a real estate investment journey as a beginner requires careful planning and strategic decision-making. By conducting thorough research, setting clear investment goals, creating a budget, and choosing the right properties and investment strategies, you can position yourself for success in the real estate market.
Here are a few details you should be aware of if you are planning to make a real estate investment in Mumbai:
- 35% of the rental housing units in India are single family rentals (SFRs).
- Real estate investors that buy and hold properties hope to profit from recurring rental revenue and steady property value growth.
- House-hacking a primary residence, acquiring shares of a real estate investment trust (REIT), or crowdfund are all options for those lacking the cash for a sizable down payment to invest in real estate.
Beginner’s Guide for Real Estate Investment:
Initially as an investor, you need detailed research and education while understanding the market well. You need to set clear investment goals and make clear budget plans and finance planning. Then you have to choose a property that fits all your requirements without compromising on the quality of lifestyle that you desire. Finally, you must assess all the strategies available to you and consider the best course of action that determines your purchase decision. Let’s dive into some considerable strategies that are tried and tested in the market by seasoned investors:
- Buying & Holding Rental Property :
- Reinvesting Rental Income :
- House-hacking :
- Fixing & Flipping :
Purchasing and holding SFR properties is a real estate investment strategy intended to generate rental income, profit from long-term property value growth, and take advantage of special tax advantages available to real estate investors.
Many buy-and-hold real estate investors adopt the complementary approach of reinvesting rental revenue. Net cash flow from one rental property is preserved until there is enough money for the down payment on a second rental property, a strategy often known as the “snowball effect.” Then, until there is enough money for a third rental property, net cash flow from both rental properties is saved.
A real estate investing tactic called “house hacking” is utilized by homeowners who don’t yet have enough cash to buy a rental home. Rental of a spare bedroom or the conversion of a basement into a studio apartment are two instances of house hacking. Savings from home hacking rentals are used as down payments on rental properties till funds are available.
If everything goes according to plan, house flipping is a high-risk real estate investing technique with a potential high payout. Since they only intend to hold a property for a short period of time, investors who fix and flip properties do not want to be landlords. A flipper may choose to hold onto an undervalued property and hope to profit from appreciation after finding and buying it. Alternatively, they may choose to undertake strategic improvements to boost the value of the property.
Smartly Build Your Real Estate Investment Portfolio with Runwal Group
Besides the above-mentioned investment strategies for beginners, there are a few tips that you need to keep in mind as an aware real estate investor like adapting to market conditions, building a support network, plan long-term financial growth and multiplying wealth. Helping the investors in making an informed decision, Runwal Group is a renowned real estate developer in Mumbai, who has been contributing majorly for the benefit and welfare of the real estate investor community. There are some remarkable residential and commercial projects offered by the brand making them highly investable options available in the market.
Investors can leverage the trust that Runwal Group brings to the table and make the most of their investment, may it be a beginner or a seasoned player in the market. Properties like Runwal Bliss, Runwal Avenue, Runwal Commerz, and Runwal Fifth Avenue are a few of many projects worth investing in right now.
Also, all these projects are a part of Runwal City Centre, a gated community sprawling in a 36-acre integrated township having residential, commercial, and retail developments that are ready to be invested in. So, go ahead and pick a suitable real estate investment strategy for yourself to grow your investment portfolio.