Investing in Real Estate Without Buying Property

It is pretty tempting to invest in real estate because of the fantastic returns it promises in the long run. Starting to invest in real estate is not easy because one requires a lot of capital. You may wonder if there is one way of investing in real estate by owning a property. There are other ways to ensure a steady cash flow without buying a piece of property. 

So, let’s be clear that property ownership is not the only way to invest in real estate. If you explore, you will come to know that there are many ways to take the opportunities that let you earn a good profit while the real estate market appreciates. You are not owning any property and avoiding the responsibilities of maintaining the same. If you don’t follow the traditional way of buying property, you can purchase property at different locations across geographies. You can also purchase other classes of real estate property. You will get very attractive returns even if you are not buying property literally. 

Invest in REIT

Real Estate Investment Trust invests in the debt and equity market of real estate. If you invest in it, you invest in various asset classes and earn a minimum of 7 to 8 percent return annually. It is employed by small and medium investors too. As an investor in REIT, you hold the shares of the property and earn dividends. The return depends on the performance of the investment. 

According to some experts, REITs will change the scenario of the real estate market in the future. There is help in getting the sponsor for the assets through building trusts. The method lets the investors own the properties without solely buying the property in an absolute sense. According to the guidelines of the REIT, your 80 percent value should be invested in assets that generate revenue. The remaining portion can be invested in under-construction properties or projects. 

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Wholesale in real estate

If you are looking for ways to start investing in the real estate industry without investing a considerable sum, real estate wholesale is one option for you. You have an opportunity here to buy a property under an agreement that is underpriced. The property can be sold to another person at a profit. The method is a way of training a beginner in getting an insight into the real estate market. They can also learn negotiation skills. You, as a wholesaler, will earn a fee that will be treated as revenue. It will be a part of the transaction, and it will be calculated at a certain percentage of the property cost. 

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Mutual funds of Real Estate

You can invest in a real estate mutual fund which is a good way of diversifying the real estate portfolio. It is something like mutual fund investment, where the person invests in a mutual fund while the company owns and manages the fund. You will have earnings in the form of dividends or shares. Real estate mutual fund mainly invests in the REIT. It makes a direct purchase of residential, commercial, and industrial properties. This is beneficial to small investors who cannot invest directly in real estate. The income from a real estate mutual fund depends on demand-supply, the condition of the market, and the prevailing interest rates. Real estate mutual funds are good for you if you don’t have the huge capital to invest directly in real estate but want to earn consistently from the real estate market. If you are a resident of big cities like Mumbai and Delhi, where the real estate properties are pretty expensive, this mutual fund option is perfect for you.

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Online investment option

Online investment in real estate is a pool of funds from various investors. Someone invests on their behalf because investment in real estate individually is a quiet and expensive affair. There are options in investing in private, commercial, residential, and industrial properties. These are the options for diversification of the investment portfolio for small investors. They can invest online and earn dividends without having to own property directly. 

Also Read: The scope of real estate investment in India 2019

You can also reap a rich dividend by providing hard money loans to real estate investors. These are also known as bridge loans. These are short-term financial investments in a project. The loan depends on the total value of the property. If you wish to earn from the real estate market but don’t want to own property directly, you can opt for one of these options to earn money from the real estate market. These are viable options for making a good return on investment from the market without the risk of investing a considerable sum of money. It keeps your cash almost risk-free and gives you the option of earning good dividends. You may also term it passive income where you are not actively involved in owning and maintaining properties. You have the opportunity to let your money earn dividends. Even otherwise, your money could have been lying idle had you not invested it in the market of the real estate.

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