What Makes it Easier for Indian Property Buyers to Invest in Real Estate?

By : 360 Realtors

26 March, 2021

Traditionally, families in India love holding real estate assets. A statistic reveals that the average Indian family has got around 77% of its overall assets in the real estate category. In recent years, there have been several regulatory changes in the industry, that have ultimately eased up real estate investment for property buyers. Leasing and renting out properties can yield lucrative returns.

In urban areas, people often own two houses. They use one of these properties personally for residence, and obtain rental income from the other. High-income groups also rent or lease off commercial offices and retail spaces for high rental income. However, renting or leasing off the properties involves significant paperwork.

Now, with the REITs coming up in the real estate scenario, investing in real estate would be a breeze. These real estate investment trusts bring a new way to invest in the real estate industry. These assets are like units of mutual funds which one can purchase from stock exchanges. This kind of investment takes place in real estate assets that can generate income. For instance, these assets may include office blocks, apartment blocks and shopping malls.

Investing in real estate through REITs can be highly beneficial. These trusts distribute as much as 90% of the generated income through rent to the investors. Besides, while asset sales, the investors can also enjoy capital gains. In India, three REITs have been listed so far. These trusts provide exposure to commercial properties in metro cities like Gurgaon, Bengaluru, Mumbai and others. Eventually, REITs make investment in real estate more fruitful.

Considering the fact that Indians love to invest in real estate, it would not take long for the REITs to gain popularity. Besides, people can also invest in real estate through mutual funds. In 2021-22, it is projected that the Indian economy would experience a 10% growth. With the demand for commercial real estate increasing, REITs would open up an alternative channel for investment in real estate.

With the Indian real estate industry growing rapidly, investors are likely to channelize more funds into the sector in the coming years. The inception of REITs would open up new investment avenues for real estate owners. Eventually, real estate would continue to be the preferred investment sector for Indians.