Investing in a real estate property is always deemed profitable. A good investment is when there is a high chance of return. Unlike investing in other assets which require a big stake, it takes just a small stake in real estate to get started.
A home loan usually requires you to pay around 20% to 25% of the money as a down payment. However, in some cases, purchasing a property in Lucknow may require as low as 5% of down payment. Besides, there are many ways by which you can invest in real estate without having a significant upfront cost. Let’s explore more.
Here’re some other ways to invest in Lucknow’s real estate
Rental Properties
Those who can handle their own property related tasks can invest in rental properties. All it requires is managing tenants and tasks properly. You can obtain finances from banks with a small down payment, however, you need to have substantial finances for upfront maintenance costs. Also, if the tenants don’t pay rent or the property is vacant, you may have cash on hand to cover up for those costs.
On the other hand, when the rented property starts fetching cash, you can leverage this amount to invest in different properties. This way, you will have many income streams from various properties.
House flipping
Although it’s a new concept in India, house flipping allows people with extensive years of real estate experience to generate additional income. House flippers are different from the usual buy-and-rent property owners.
Most of the flippers sell their undervalued properties within six months at a profitable rate. However, there are some who do not invest in property improvement and sell it without any modifications.
On the other hand, flippers who do not upload their properties may end up paying other expenses from their own pockets. So, instead of making a profit, they start bearing losses,
There are also some house flippers who buy affordable properties and renovate them to increase their value. Since it’s a long-term investment, investors can only acquire one or two properties.
REIGs (Real Estate Investment Groups)
Real Estate Investment Groups are perfect options for those with a significant capital portfolio who want to obtain hassle-free rentals from their properties.
It is managed by the company holder, which gives investors a reliable way to generate income. Such companies manage high-value properties. Investors can rent their properties and collect monthly rent.
The best thing is that a single investor can have multiple units. All property management tasks, including units management, maintenance handling, tenant interviews, and advertising vacancies are done by the REIGs companies. In exchange, the company a monthly percentage from the rent obtained.
Online real estate platforms
If you want to join a large residential or commercial deal, real estate platforms can be the best option. The investment is done through online platforms called real estate crowdfunding. Such platforms pool investors’ resources and diversify their portfolios.
However, it is always helpful to check the legitimacy of the project before making any investment.
REITs (Real Estate Investment Trust)
REITs are formed when a trust utilises the money obtained from the investors to purchase and manage properties for income generation. Major exchange platforms enable buying and selling REITs. In order to maintain the REITs status, a company is required to pay about 90% of its profits (taxable) as dividends. This practice enables REITs to prevent corporate income tax.
Investors who seek regular and steady income can count on REITs for dividends. It can also encourage investors to foray into nonresidential investments like office buildings, malls, hospitals, and other properties that they cannot purchase directly as individual investors.
If you look closely, you’ll find that REITs are the more formal versions of REIGs.
Since REITs are listed on stocks, you can buy and start transacting.
Conclusion
Real estate investors have many ways to generate income, from renting to investing in REIGs and REITs. You can explore any option you like and start earning from your investment. It is always advisable to seek advice from a professional before making any move.
