Real Estate: An Alternative Investments Option Promising Double Digit returns

Real estate is the key to wealth. The more you know about real estate, the more successful you will be.” These words from real estate magnate Donald Trump highlight the immense potential and allure of real estate as an investment avenue. In a world of fluctuating markets and unpredictable returns, real estate stands out as a stable and promising option. It offers the potential for double-digit returns and serves as a cornerstone for building long-term wealth.

In this blog, we will explore the world of real estate as an alternative investment options, delving into the strategies and insights that can help investors unlock double-digit returns.

Commercial Real Estate: Benefits in 2023

Commercial real estate offers numerous advantages and compelling reasons for investors to consider it as a favorable investment option.

1. Steady Income Stream

Investing in commercial real estate provides the opportunity to generate a stable and consistent income stream. Commercial properties, such as office buildings, retail centers, and industrial warehouses, typically have long-term leases with established tenants, ensuring reliable rental income.

2. Potential for Appreciation

Commercial real estate has the potential for property value appreciation over time. As the demand for commercial spaces increases and the economy grows, property values can rise, allowing investors to benefit from capital appreciation and potentially higher returns on their investments.

3. Diversification and Stability

Commercial real estate offers diversification benefits by adding a tangible asset class to an investment portfolio. It has historically shown a low correlation with other asset classes, such as stocks and bonds, providing stability during market fluctuations and economic downturns.

4. Inflation Hedge

Commercial real estate can act as a hedge against inflation. As prices rise, rental rates and property values tend to increase, allowing investors to preserve and potentially increase their purchasing power.

5. Tax Advantages

Real estate investments offer various tax advantages, including depreciation deductions, mortgage interest deductions, and the potential for tax-deferred exchanges. These benefits can help investors reduce their overall tax liability and enhance their after-tax returns.

Why Real Estate Has Potential of Double Digit Returns for 2023 in India?

Real estate in India holds significant potential for double-digit returns in 2023, driven by several factors that make it an attractive investment option.

Here are some key reasons why real estate has the potential for strong returns in India:

1. Growing Demand

India’s population continues to grow, leading to an increased demand for housing and commercial spaces. Rapid urbanization, rising income levels, and government initiatives such as “Housing for All” have fueled the demand for affordable housing and infrastructure development, creating opportunities for real estate investors.

2. Favorable Policy Reforms

The Indian government has implemented various policy reforms to boost the real estate sector, such as the introduction of the Real Estate (Regulation and Development) Act (RERA) and the Goods and Services Tax (GST). These reforms promote transparency, protect buyer rights, and simplify taxation, instilling confidence in investors and stimulating growth in the sector.

3. Infrastructure Development

The Indian government’s focus on infrastructure development, including the development of smart cities, metro rail networks, and industrial corridors, has a positive impact on the real estate market. These infrastructure projects not only enhance connectivity but also create demand for residential and commercial properties in their vicinity.

4. Increasing Foreign Direct Investment (FDI)

India has been attracting significant foreign direct investment in the real estate sector. The relaxation of FDI norms, along with the government’s efforts to improve ease of doing business, has encouraged foreign investors to participate in the Indian real estate market. This influx of foreign capital contributes to the growth and profitability of the sector.

5. Emerging Micro-markets

Emerging micro-markets in cities like Bengaluru, Hyderabad, Pune, and Chennai offer attractive investment opportunities. These markets are witnessing high demand for residential and commercial properties due to factors such as robust employment opportunities, infrastructure development, and a favorable business environment.

According to reports, certain micro-markets in India have shown impressive returns. For instance, in cities like Gurugram and Noida, residential properties have witnessed price appreciation of around 10-15% in recent years. Similarly, commercial properties in prime locations like Bandra-Kurla Complex in Mumbai have demonstrated rental yield growth of 8-10%.

The Indian real estate sector presents a promising landscape for double-digit returns in 2023. With growing demand for alternative investment platforms, favorable policy reforms, infrastructure development, increasing foreign investment, and emerging micro-markets, real estate in India offers opportunities for investors to capitalize on the potential for strong returns.

Commercial Real Estate for Double Digit Returns

When it comes to investing for double-digit returns, real estate-backed structured debts offered by platforms like Assetmonk present a compelling option. These alternative investments combine the stability and tangible value of real estate assets with the structured nature of debt instruments, offering attractive returns to investors.

Assetmonk’s real estate-backed structured debts provide investors with an opportunity to participate in the lucrative real estate market while mitigating some of the risks associated with direct property ownership. By investing in these structured debts, investors can diversify their portfolios and benefit from the income generated by the underlying real estate assets.

These investments provide the stability of real estate assets, predictable income, and the expertise of a trusted platform, making them a viable choice for investors looking to capitalize on the potential of alternative investments.

Key Takeaways

  • Commercial real estate in India offers the potential for double-digit returns in 2023.
  • The real estate market in India is experiencing strong growth, driven by factors such as urbanization, infrastructure development, and increasing demand for commercial properties.
  • The implementation of regulatory reforms, such as the Real Estate (Regulation and Development) Act, 2016, has improved transparency and investor confidence in the sector.
  • Various cities in India, including Mumbai, Delhi-NCR, Bengaluru, and Hyderabad, have witnessed significant commercial real estate activity and are attracting major investments.
  • The rise of the technology sector and the increasing demand for office spaces have contributed to the positive outlook for commercial real estate investments in India.

FAQs

Is investing in commercial real estate in India a safe option? 

Investing in commercial real estate in India can be a safe option if proper due diligence is conducted, and investments are made in well-established and reputable projects.

What are the potential risks associated with investing in commercial real estate in India?

Some potential risks include market volatility, regulatory changes, construction delays, and tenant vacancies. It’s essential to assess these risks and have a well-diversified investment strategy.

How can I invest in commercial real estate in India?

There are various ways to invest, such as direct property ownership, real estate investment trusts (REITs), and real estate crowdfunding platforms. It’s crucial to consider your investment goals and risk appetite before choosing a suitable investment avenue.

What factors should I consider before investing in commercial real estate in India?

Factors to consider include location, market demand, rental potential, infrastructure development, legal compliance, reputation of developers, and the financial stability of the project.

Can I expect regular income from commercial real estate investments in India?

Commercial real estate investments can provide regular income through rental yields. However, the income may vary depending on factors such as property location, tenant quality, market conditions, and property management efficiency. Conduct thorough research and analysis before making investment decisions.