Real estate investing involves the purchase, ownership, management, rental and/or sale of real estate for profit. Improvement of realty property as part of a real estate investment strategy is generally considered to be a sub-specialty of real estate investing called real estate development. Real estate is a asset form with limited liquidity relative to other investments, it is also capital intensive (although capital may be gained through mortgage leverage) and is highly cash flow dependent. If these factors are not well understood and managed by the investor, real estate becomes a risky investment.
Real Estate investment has always been a lucrative option. It still attracts a lot of investors for building on wealth as it promises good returns. Real Estate covers:
Indian Real Estate sector is also a good option for NRI investors as there is a lot of scope and potential for growth in a large number of Indian Cities.
There are many factors which influence Real Estate Investment Decisions:
1. Political Stability
2. Infrastructural growth
3. Connectivity of a place to airports and other major cities
4. Government Policies in General and Particular for the area – ease of business, transparency, speedy disposals of proposals etc.
5. Tax benefits
6. Quality of Life – Basic Amenities, Education and health facilities
7. High paying jobs – more beneficial for investment in the housing sector
8. Migration – Inflow of people
9. Prospects for future development
10. Emotional bonding with hometown – the special reason for many NRIs as they want to create an asset in their hometown to settle down after they come back to native place
When it comes to choosing cities for Indian Real Estate Investment, Delhi, Mumbai, Chennai and Kolkata has always been a favourite. They have had their share of growth and development. There is saturation in the property market. The possibility of future growth is limited.