Roti, Kapda aur Makaan has been the most hyped need of the Indian socialist economic system for ages. But, which of these basic aspects is more essential remains an ideal topic for healthy debates. Just look at the most apparent physical surroundings around you for a moment. Yes, that’s precisely where we are leading, REAL ESTATE, and how right it is to invest in it.
While the need for having permanent physical assets like land, property, etc., that you can claim seems oblivious to the condition of basic food and clothing, that’s when we need to look at the bigger picture. It is the built environment that we live in which plays a vital role in the economy of our country. Come to think of it, businesses and society thrive on the services of commercial property, which include the provision of offices, shops, factories, housing, and many other forms of real estate.
Why real estate, you ask? Managing food and clothing requires infrastructure too!
Today, the working class is more conscious about their home-buying choices after experiencing the ferocity of the pandemic. Realising the importance of hygiene & social distancing measures just isn’t enough to stop the virus from creating more devastation if people don’t have a safe refuge to call their own. Many may debate the financial aspects of buying a home and the tedious paperwork that comes with it. But nothing beats the emotional security that comes with owning your own home.
Let’s see in detail why anyone should be investing in real estate:
Work-from-home Aspect
As the work-from-home scenario is becoming very much normalised in the corporate world, professionals are looking for comfortable home solutions to suit their working routines and keep their families safe. Hence, the urgency for buying affordable homes has increased, and investing in them isn’t a wrong decision.
Emotional Security
Indeed, emotional security comes with investing in a property. Apart from the earnings made while renting or leasing a property, one can also avail the benefits of the property’s resale at a higher selling cost than what it was purchased at the time of buying through appreciation.
Growth in Real Estate
The real estate sector has witnessed immense growth over the years due to infrastructure development in residential, office spaces, commercial real estate, retail expansion, and factory spaces. Without the services of commercial property, neither businesses nor society could function. The commercial property sector delivers and manages the infrastructure for entrepreneurship to thrive. Isn’t the whole real estate an excellent place to invest in?
Direct & Indirect Investment in Real Estate
The most frequent type of real estate investment for them is direct ownership. Still, indirect investment forms – either through non-listed funds or listed property companies & REITs – are becoming increasingly important. One can indirectly avail of real estate’s benefits through investing in REITs: a company churning incomes from real estate through its management or direct property ownership. Besides residential and office buildings, REITs also own hospitals, shopping centres, hotels, commercial forests, and warehouses.
Many investors view REIT, or Real Estate Investment Trust, as a safe investment option. It is very similar to mutual funds, where an investor gets a fixed source of income in the form of dividends from the money pooled in by many investors that fund management companies use to build a good portfolio of real estate purchases. In India, REITs were initiated by the SEBI – Securities and Exchange Board of India in 2007, allowing all types of investors to participate in the Indian real estate market.
These companies typically generate stable rental income, enabling them to pay attractive dividends. One of the most prominent examples of such properties is the co-working spaces. Given the ease of working in an environment complete with all the utilities and services without stressing your pockets, co-working spaces are the next big thing! Working from a designated and efficient workspace is cost-effective without paying much. A lot of business comes from these spaces, which benefits not only the investors but the end users.
The residential sector is the big game changer in the real estate market. Let’s discover how!
In countries with pools of slums in oversized pockets of the cities, sanitisation and proper sewage management have been challenging. Since the weaker sections of society cannot afford to invest in buying homes, continuous schemes and proposals are being made to redevelop and plan these spaces, which will systematically restructure the entire urban density. One of the most talked about initiatives by the government in recent years is the Pradhan Mantri Awas Yojana, introduced by India’s Prime Minister Narendra Modi in June 2015 to provide affordable housing. Many more government schemes are being planned to help lower-income groups own residential properties. With many such initiatives, the residential sector is expected to expand significantly. The increasing number of urban houses will indirectly increase the region’s economic value, generating revenues for future infrastructure projects.
So coming back to the question, why invest in Real estate? Real estate generates capital, creates happier, healthier, and more sustainable living. So Real estate, it’s a REAL DEAL!