It is also possible to make money in real estate investments by using smart tools and instruments.
As the saying goes, there is no such thing as easy money in this world; you must work for it. Smart tools and instruments can also be used to make money in real estate investments.
Purchase Real Estate Investment Trusts (REITs)
Although REITs are a newer phenomenon in the Indian subcontinent, they have been around for a long time. As a wise investor, you can invest a small amount in these REITs and profit from the rental income generated by the managing bodies. Each investor receives a return on his or her investment.
According to Nakul Mathur, MD of Avanta India, while REITs are a newer phenomenon in the Indian subcontinent, they have been around for a long time. For the uninitiated, a REIT is a large corporation that owns and manages large amounts of income-generating real estate. These real estate properties can include hospitals, warehouses, large office spaces, shopping malls, hotels, and various commercial properties.
Furthermore, REITs, like any other equity share of the company, can be traded on the stock market. The REIT has the advantage of being more liquid than traditional properties.
Trusts for Infrastructure Investment (INVITs)
Retail investors can invest in Infrastructure Investment Trusts (INVITs), which are similar to REITs. According to Virender Kumar, Head - Business Strategy & Marketing, ARETE Group, infrastructure investment trusts are large companies that own and manage operational infrastructure projects and earn income from these assets. In layman's terms, INVITS are pooled investment vehicles similar to mutual funds. They reinvest the proceeds in highway projects, power plants, airports, transmission lines, and large-scale pipeline projects, among other things. Furthermore, INVITs are designed and managed in such a way that 80 percent of the money invested by investors is invested in revenue-generating and completed projects. This reduces the risk associated with projects that are still under construction.
Investing in a pool of real estate stocks is one of the most popular ways to capitalise on the real estate market's growth. Although direct stock investment is high risk, a growing market offers the opportunity to earn a handsome return over time.
"If you are hesitant to invest directly in stocks, you can choose a thematic mutual fund that focuses on the real estate market." Your money will be exposed to the real estate market through a pool of top real estate companies. The mutual fund investment strategy also reduces risk because the different performance of various players normalises returns," said Atul Goel Ganga, MD, Goel Ganga Group.
