How To Accumulate Wealth Through Real Estate?
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With inflation hitting new highs and market
conditions volatile like never before, saving and investing money is probably
every individual’s dream. While there are several avenues that one can explore
to multiply wealth, real estate remains one of the most reliable investment
options as it is one of the few assets that never depreciates.
An investment made in real estate will never land you in loss and debts in the future. If real estate seems like a tempting investment avenue, this article is for you.
Real Estate Investment Options To Explore
If you are just getting started and want to brush up on your knowledge of real estate investments, sit back and read this article. We have listed the different ways real estate can contribute to creating wealth.
- Earn rental
income
If you are looking to generate a fixed income
from real estate, renting out properties is the best solution. Invest in a
property situated in a prime location to earn a decent amount of rent monthly.
Since properties are always in demand irrespective of the location, you will
easily find willing tenants everywhere. Define the terms and conditions of the
rental contract clearly to avoid any troubles and financial losses in the
future.
- Explore real
estate investment groups (REIGs)
This type of investment is ideal for
individuals who want to generate income from more than one property. REIGs are
similar to mutual funds. Here, you invest in a company that manages properties.
The company gets investors to invest in the properties and you earn income
through the company while avoiding maintenance costs.
- Investment
through apps
Investing in real estate through online
platforms is ideal for beginner investors. One can explore a wide range of
properties without geographical restrictions. An individual residing in Mumbai
can invest in a property in Kochi and earn an attractive monthly rental income.
You can pick a property in a location with favourable market conditions to earn
maximum profits.
- House
Flipping
House Flipping refers to owning a property for
a short period and selling it at a huge profit margin. This practice requires
sound knowledge of market and industry trends. One needs to have foresight to
make this strategy work in their favour. This tactic is more beneficial for
experienced investors who understand the market like the back of their hand.
- REITs
A company that owns, operates, or finances
income-generating real estate is a real estate investment trust (REIT). REITs
generate a steady income stream for investors. Investors can earn dividends
from real estate without the stress of buying, managing, or financing any
properties themselves. REIT is ideal for those who want to diversify their
investment portfolio.
These are a few real estate avenues that
present you with opportunities to invest. Now here are a few tips that will
come in handy before you venture into the investment game:
Tips For Maximum Returns From Real
Estate
- Stay up to
date
Learn about real estate markets, investment
strategies, financing options, and relevant laws and regulations. Subscribe to
real estate news and updates online to get a grip on trends.
- Choose the
right location
The importance of location cannot be stressed
enough. Location determines how fast your property investment will yield
profits. Analyse the demand and supply trends of each location to make an
informed investment decision.
- Start small
If you are new to real estate, start by
investing small amounts. As you gain more experience and become well-versed,
you can try a combination of investment methods such as REITs, house flipping
etc.
- Know the tax
benefits
Real estate investment is eligible for tax
benefits. Understanding the tax implications will help you invest smartly to
gain maximum benefits. You can save up to ₹1.5 Lakhs per annum on the principal
when applying for a home loan. This regulation is as per Section 80C of the IT
Act. You are also eligible for ₹2 Lakhs tax exemption on the payable interest
amount under Section 24. Consult with tax professionals to understand tax
exemptions better.
Real estate offers diverse investment options,
including residential properties, commercial real estate, and vacation rentals.
The biggest advantage is that investors can choose one that aligns with their
preferences and risk tolerance. Start your real estate investment journey today
to capitalise on the best opportunities to earn profits.
Article authored by: Team Propfynd
Date: 4th December, 2023