Real Estate as Investment 101


Often we connect with piece of land or property with good deal of emotion attached to it because, it might be the place where we had spent our childhood with our grandparents, or It can be your first home you bought from your salary and so on.

Before we take real estate as investment vehicle make sure, you are not attached emotionally with property and make a clear exit plan, just  in case it if is not working out for you.

Note please do not think the home which you live is an investment unless you have bought it yourself for investment purpose. Due to obvious reasons.

 And by the way buying house, it can be sometimes liability then investment in short term. with that controversial statement, lets unpack real estate

There are different segments of real estate investment, it can be

  • Residential properties it includes, single family or multifamily properties, or gated community apartment or it can be beautiful out skirts villa where you get away from day today Hussle and bustle.
  • Commercial properties like shops, malls , office space, hotels and so on
  • Industrial properties this are mostly used by business for building their factories or warehouse.
  • Agricultural lands can be classified into wet land, semi wet land, or dry lands. Based on water availability and irrigations facility. If you are have forming family background, or studying related to agriculture. This might be good option for you to invest both your time and money.
  • If you have big pocket even you can think buying small highlands but make sure, you take your food along with you because most of highlands  are not having any habitat, and also don’t forget your return ticket.
  • If you think that all there to cover in real estate then, think again. There whole new opportunity opening in real estate market, Yes. That is inter planet residence. It is not far away where people are living in Moon and mars. We can see this happening, in our generation itself, by the end of this century people living in Moon and Mars will be traveling between the planets for visiting their families, or going out of earth for their business trips. Already many company like space X, amazon, etc. or thinking these as possibilities.

Now we know where we can invest our money in real estate.

Let us understand how can we make money from real estate?

 Money can be made in two ways, one by renting out your property and 2nd by waiting for property to get appreciated.

Of course there is another part to it , you can earn some money by brokerage by referring people to right property,  that we are not covering in our channel.

Sad part of most investment is you can only make money when you sell it, but there is exception to it. in real estate sector has huge rental market, where you can rent your property or lease it, without selling out your property.

Rental properties are profitable when you buy the property without any loan.  Or if you buy by paying 60% to 70% of down payment from your savings. We are not saying if you are buying property by mortgage or loan is bad, But you cannot make profit quickly. Of course, you can make profit but return on investment will be too long. But it all depends when your mortgage or loan gets closed.

Do not get disappointed with our answer, what if we say there is alternative way.

You can make profit in less time, If you buy property with right ratio of mortgage interest rate, down payment and earn right rent per unit of property.

We do not want our introduction on real estate video to get too long, So we will make it separate video on this topic for you to watch it. Make sure you have subscribed to our channel, so that you can watch when it is done.

That is out of the way. Let us focus on when our property get appreciated?

Of course, you know the answer when there is demand.

Demand for property can go high or low based on some of the factors like

  • Near by government project or IT corridors. can boost the real estate price to go high.
  • Job market is biggest driver for increase in real estate value, as more people needs to be sheltered  and hence increase the rental value and also value for property for purchase.
  • And also tourism is another biggest factor why property value goes high, as tourism enables small business like hotels, restaurants, handlooms business, etc. to thrive. This also creates demand for more commercial  properties and residential properties.
  • Increase industrial activity can increase value for industrial properties, agricultural lands as there will be high demand for raw material,etc.
  • Good road, rail and air connectivity can benefit all segments of real estate, you can witness this in western countries .
  • Overall real estate will grow when economy is doing good.
  • You can see some or all the aspects in metro cities across the world and hence  property values in metro cities are very high.

Don’t worry if you have not invested in any of metro cities here is some good news.

Because of COVID 19 many major companies are allowing their work force to work from home. Many of employees can now think moving back to their home town in tier 2 and tier 3 cities. This will boost macro economy outside the metro cities.  And property demand may go high in tier 2 and tier 3 cities. It again depends on future demographics.

From long term perspective  if we see, real estate has given constantly high returns.

For all speculators it is better to wait and watch, what holds for commercial properties in future?  COVID 19 has turned tables for all office spaces segment, As many IT companies and financial firm has started providing their employees to work from home.

We are making more video related to real estate in our near future. Featuring how small changes in property can increase property value, we will also see how to find right value for the property and so on. Buying property involves lot of paperwork and goes through various government offices and fees. We get into those things in our upcoming video on real estate.

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