Easy Ways To Get Good Returns On Real Estate Investment

Making money through real estate can be easy. In spite of the complexities surrounding it, real estate is a much more reliable investment in terms of value appreciation compared to stocks and other forms. If you have deep pockets to spare and are patient with your investment, real estate is the best form to invest that will give good returns.

Here are a few opportunities that you can tap into:

Auction of distressed assets: Investments in auctioned properties is all set to take off in India. Many banks, including those in the public and private sector, are now considering the option of auctioning properties which are linked to loans that have become non-performing assets (NPAs). By the size of NPAs that banks have accumulated, property auctions might become a regular feature in the coming days. Banks like the State Bank of India have already started with it.

Distressed assets could come at good bargains, and could be resold later at a good deal. These real estate properties are vetted by banks and come with a certain guarantee. Keep a close eye on announcements of such auctions in the newspapers. As most of these auctions have now gone online, it would be easier to invest in properties across the country. Research the property and its location well before you decide on a bid amount.

Rental properties: Investments in rental properties is a much easier option to make money as they give regular returns. It does have the regular feature of ‘waiting for maturity’ associated with most real estate investments. Scout for a property, either residential or commercial, which has a good track record of rents. If you are going for a commercial property, make sure that rental agreements are long-term and watertight. You would also have to hire a maintenance team with a crew to ensure that the property is being managed properly. Apart from these details, rental properties are comparatively less-riskier than traditional property investments. It can also give a fair amount of appreciation over time. Just ensure that you do not pay a heavy premium in the hope of price appreciation.

You can also take a loan to buy a rental property and ensure that the rent earnings take care of the EMIs. You would just have to be extra careful with tax management with such kind of properties.

Fix-and-sell properties: Such properties are trickier and hard to find, but they are worth the time, effort and money. While they might be complete distress sales, a number of properties are abandoned by owners. It could be because they are based abroad or the property might be in a legal limbo over ownership. Hire a good agent to scout for such properties and a good lawyer might be able to clear any issues with the property. After the initial hiccups are overcome, you can fix it and sell it a much higher price than it was bought at. However, do not go for properties which are in legal mess and involve numerous government approvals or owned by a large family with untraceable heirs.

Katya Bellamkonda is a Mumbai-based writer. She has spent the last nine years reporting on many sectors in India including energy, infrastructure, technology and telecom.