Real Estate has been a secured mode of investment for a long time. Mankind has always been open to investing in real estate. It has given a stable rate of return over time without compromising on capital safety.

How and why do we invest differently in real estate? Let us dive into it.

Don't wait to buy real estate. Buy real estate and wait.

The 5 Most Common Ways To Invest In Real Estate in India

There are many different ways one can invest in Real Invest. The difference in investment goals and available capital makes the difference. We will go through the most common ways people invest in real estate in India.

1. Rental Properties

Rental Properties are the most sought-after in India, especially in urban areas and cities. With the availability of Home Loans and savings, investing in rental properties is easy. With disposable income in hand, many people invest in rental properties.

How Rental Properties Investing Works?

The working of rental property investment is simple. With savings in hand and disposable or double income, many people search and invest in good rental properties. These are mostly flats and apartments in urban and suburban areas of metro cities.

The rental properties investing works as follows:

1. Identifying a property: A property is identified in an upcoming area of the city or in an already developed area where rental income is expected.

2. Buying of the Property: The Investor buys the property mostly a flat (can be 1BHK or 2BHK) with the help of Bank Loans (on EMIs). The EMIs are easy to pay and do not burden the investor with a major upfront investment when compared to the property cost.

3. Renting the Property: The property is rented out for a rent that covers the costs of the property (the monthly rent is equal to or more than the EMI). The local market conditions decide the rent of each property. The rent should be approximately the EMI amount.

4. The Residual: The difference if any is either saved by the investor or invested back again in another asset class.

Why do people invest in rental properties?

Rental properties are popular since they tend to give value and start recovering the amount invested sooner than appreciable long-term investment properties. They are ready to move in and can be utilised generating a stream of income from day one.

When to invest in rental properties?

Investing in Rental Properties requires a few things in place. From our perspective, you require either of the following two things:

Capital: To buy the property outright paid in full or

Credit Score: To get a Home Loan for the property

If you do not have any sufficient funds either to fuel your outright purchase or pay for the EMIs then investing in rental properties may not be the correct choice then.

Pros & Cons of Rental Properties

When investing in rental properties one should keep in mind the pros and cons of the same:

Pros of Rental Properties

You get an income stream started

You have an asset in the form of the property

Cons of Rental Properties

You can earn a loss if the property is not rented out quickly

You need to monitor your property for any unauthorised use

As with any investment rental properties are great if you know what you are doing and consider all the options.

If you are looking to invest in great rental properties in Mumbai Metropolitan Region (MMR), then Haware My First Home can be a great option to look at.

2. House Flipping

A very attractive strategy for those who want to earn profit in a relatively shorter time. House flipping involves buying a property which is in shambles, fixing it and re-selling it at an additional profit margin. Many people who have a limited amount of capital indulge in house slipping either solely or in partnership with others. It is more like a trading of houses rather than a long-term investment.

How does property flipping work?

For flipping to work, you should get a property at a very discounted price. If the property is bought at the market price, then the profit can be significantly lower.

Those who deal in property flipping tend to look for such properties which are currently in shambles. They buy the dilapidated property, repair it and then sell it to a buyer as a renovated property.

In different countries flipping works in different ways. In some countries, people flip apartments whereas in some people bungalows or houses.

Why do people flip properties?

The main motive for flipping properties is to gain a profit in considerably less time as compared to investing in a property for longer terms. People who invest in long-term properties generally do flip properties.

When to flip properties?

Flipping properties does not only involve buying and selling but also the repairs part. A widely known proverb in the field is, “If you want to flip properties, then you should be ready to fix the toilets”.

If you ask someone who does not like to get into the repairs and it’s nitty gritty, then flipping the properties is not for you.

Pros & Cons of Flipping Properties

There are many pros & cons of flipping properties. Some of them are as below:

Pros of flipping properties

You earn a profit in a shorter term

You can enjoy tax benefits

Your capital is realized quicker than others

Cons of Flipping Properties

You need to flip multiple properties to make a considerable profit

You need to look for specific properties which can be sold quickly

You can only invest in RTM (Ready to Movein) properties

If you are looking to invest in great properties to flip in Mumbai Metropolitan Region (MMR), then Provident Palm Vista can be a great option to look at.

3. Real Estate Investment Groups (REIGs)

When a group of people pool together their money to invest in real estate then that group is termed a Real Estate Investment Group (REIGs). Usually, people who know and trust each other pool their money to make such real estate investments which otherwise would not have been possible on their own.

How do property REIGs work?

REIGs are formed when a sufficient fund can be pooled by a group of people who are small investors. The group usually identifies a person amongst them and entrusts the responsibility to buy, sell, lease or rent the property. Most of the functions are performed by this identified person.

Why do people invest in REIGs?

People are attracted to REIG for one reason, that being better returns at nominal capital. Usually, the group consists of 10-20 people who invest in say a property worth 1 crore. The capital employed by each of the 20 people is 5 Lakhs. If the person wanted to invest solely it could have never been possible and the RoI would have never been enjoyed.

When to participate in REIGs?

One should participate in REIGs when one has trust and capital. Since this strategy involves several people, one should know who he is dealing with. Since most of the time the REIG is not a registered or a formal entity, it can be a problem if things don’t work out.

Pros & Cons of REIGs

There are many pros & cons of investing in REIG. Some of them are as below:

Pros of REIG

Better investment avenue in smaller capital

Passive income sources can be generated

No active involvement is required by all

Cons of REIG

REIG can work only with trusted people

Sound decision-making is required by the person executing the deal

4. Real Estate Investment Trusts (REITs)

A real estate investment trust (REIT) is an entity mostly a registered company that buys, sells, operates, or finances income-generating real estate. Similar to a mutual fund, REITs pool the capital of their investors. In return, the investors earn dividends from real estate investments. Investors do not individually buy, manage, or finance any properties.

How do property REITs work?

Since REITs are registered entities regulated by law and function. The functioning is similar to Mutual Funds. Investors having varied capital subscribe to the REIT and pool their capital. The REIT then buys, finances or leases the properties generating an income source.

Properties may include apartment complexes, data centres, healthcare facilities, hotels, infrastructure, office buildings, retail centres, self-storage, timberland, and warehouses. REITs usually deal in a specific real estate sector. However, diversified and speciality REITs also exist.

Why do people invest in REITs?

REITs are attractive for small and micro investors. Many investors who lack the big money to invest in real estate can participate in the market through REITs. Just as in MFs, anyone can buy a unit for a low amount.

When to participate in REITs?

Any person looking to invest in real estate with a low capital base can invest. Before investing it should be considered that returns might not be as big as in MFs

Pros & Cons of REITs

There are many pros & cons of investing in REITs. Some of them are as below:

Pros of REIT

Small pocket-friendly capital required

Accessible to almost everyone

Cons of REIT

RoI can be lower than MFs

Inventory movement can also be slow

5. Buy & Hold

Many people take advantage of time. They buy real estate and wait patiently for years to see their investment grow multifold. Some investors wait for a decade or more.

How does long-term investing / buy and hold work?

Investors who have spare capital buy properties when they are cheap or when the property market they are investing in has high growth potential. They negotiate and buy the property many times financing it from a financial institution such as a Bank. They pay EMIs and the property keeps on increasing in value.

Why do people invest and hold?

The main intention is to get capital appreciation over longer periods. Also, capital appreciation is more often not taxed. Thus, whatever profit is achieved is tax-free.

While staying invested, there are tax breaks that can be taken advantage of. These tax breaks make the investment strategy more attractive.

When to buy and hold?

When considering this strategy you need to study your cash flow and investment horizon. You need to know that you will stay invested for a long period. Investors seeking multiple times returns and are willing to take the risk should adopt the buy & hold strategy.

If you are looking to invest in great properties that give you multiple times returns in Mumbai Metropolitan Region (MMR), then Purva Clermont can be a great option to look at.

Pros & Cons of Buy & Hold Strategy

The pros & cons of the buy & hold strategy are as below:

Pros of Buy & Hold:

Huge returns - Multiple times

Favourable tax breaks for multiple years

Cons of Buy & Hold

Capital is blocked

In case of recession, losses are there

Conclusion

In conclusion, real estate investment remains a robust avenue for building wealth and diversifying portfolios. The five strategies discussed—buy and hold, flipping, REITs, and REIGs — each offer unique advantages and challenges. Investors should weigh these carefully against their financial goals, risk tolerance, and market conditions.

While the buy-and-hold strategy promises long-term capital growth and passive income, it requires patience and management.

Flipping can yield quick profits but comes with significant risk and demands expertise.

REITs offer liquidity and ease of entry, making them suitable for those seeking hands-off investment, but they also mean less control over individual property choices.

Lastly, REIGs open doors to bigger projects, but it’s essential to understand the platform’s structure and the specific deal’s terms.

Real estate investment is not a one-size-fits-all endeavour. It’s a complex, dynamic field that necessitates a strategic approach tailored to individual circumstances.

By understanding the pros and cons of each strategy, investors can make informed decisions that align with their vision of financial success. As the market evolves, staying educated and adaptable will be key to navigating the exciting world of real estate investment.