It is common for investors to own multiple pieces of real estate, one of which serves as a primary residence, while the others are used to generate rental income and profits through price appreciation. For many people, real estate is the easiest to understand investment because it is simple, straight-forward and involves a fair exchange between a property owner (the landlord) and the property user (the renter). As long as the hot water keeps flowing and the rent arrives on time, everyone is happy and benefits. Investing in real estate is much more complex than this, though, because there are several different types of real estate investments including residential, commercial, and industrial, as well as real estate that trades on stock exchanges, which are called REITs.
Investment inreal estate has been booming as a top investment phenomenon to multiply the wealth. India Real Estate Investment has proven to be the highest yielding investment opportunity in the recent few years. The realty industry in India is at its zenith and is thereby attracting the maximum investment not just locally but overseas too.
However, there are various factors which initiate the investors to invest in real estate. Most important factors are better return and tax benefits. real estate sector gives higher attractive returns as compare to the stocks and bonds. Also, one can avail huge tax benefits on investing in real estate. According to the report of the Technical Group on Estimation of Housing Shortage, there is an estimated shortage of 26.53 million houses during the Eleventh Five Year Plan (2007-12), which indicates the huge demand for the residential property in future and provides a big investment opportunity for the investors. This is another major reason to invest in this booming industry.
Many Banks and Financial Institutions like HDFC Property Fund, Dewan Housing Finance Limited-DHFL Venture Capital Fund, Kotak Mahindra Realty Fund, Kshitij Venture Capital Fund (A group venture of Pantaloon Retail India Ltd) and India Advantage Fund (ICICI), provide the funds for real estate development to the Builders and Developers for construction of these structures and to the investors. Therefore the funding becomes lot easier. Along with this there is more cash flow and value appreciation in the real estate investment.
The most important factor that has been a major factor for the growth of real estate and investment are the initiatives taken by the government. A major share of the FDI or the foreign direct investments is tailored to the Indian real estate sector these days. The Indian government is also putting in more money in real estate and many old regulations have been fine tuned to attract more money into the sector. The property tax act, the rent control system, land ceiling regulations have also been updated and made more investor friendly for people wanting to put their money into real estate. Along with domestic laws, the foreign exchange regulation act has also been made more liberal to get more people from aboard into Indian real estate buying, selling and investing.