The silver lining in real estate
The silver lining in real estate
Namaskar dosto. Welcome back to another fun and insightful podcast by Angel Broking.
Doston India mein, real estate sadiyon se preferred investment bola gaya hai. Especially for Indians who have sufficient capital, ‘real estate mein investment toh bantha hi hai’, aapke relatives aapko aksar ye line bolte hongein, just like what they say about gold investments. Hain ki nahi?
Doston aaj ke podcast mein, we are going to look at real estate slightly differently:
Aap khud dekh paoge ki aap real estate investment - without a ton of money -kar sakte ho ya nahi
Iske saath saath, we will also explore how real estate might just be a favourable investment option amidst the pandemic.
And as we always do, hum aapke saath kai precautionary measures bhi share karenge.
Part 1 - the democratization of real estate investments: how to partake in real estate investment with small capital
Real estate investment bolne pe the first common thought is ki bahut capital lagta hain ek ghar lene mein, let alone second home lena for investing purpose. Soch yeh hain ki 8 to 10 years ke baad, property ka bhaav badh jayega aur phir ise bech ke kamaai kar paoge. Kya aapko bhi yahi lagta hain?
Yeh galat nahi hai lekin this is a negative, narrow (and risky) view on real estate investment. Property ka value kitna badhega? Kab tak badega? Aur itna bada investment kar ke agar beech mein uss paise ki zaroorat pad gayi toh? You can't even take out a partial amount... aur bhi sawaal hai: Utna paisa paane ke liye kitne saal lagenge? And the most common "bhai first home lene ke liye, I don't know when I will have sufficient capital. Second home kaise khareed lunga?"
But today, we have the option of investing in the real estate market via the stock market. Aaj toh aap apne mobile se bhi stock trading kar sakte ho - all you need is an internet connection, and a mobile app.
It's not like before where people needed complex systems and multiple PCs to trade. In fact, pandemic mein many new investors have started learning stock market investing to try for incremental earnings. Ghar se kaam kar rahe ho, toh mauka and for most people- extra time, bhi hai. Waise trading kahi se bhi kar sakte ho since it is smartphone based.
Stock market dvara real estate investment karne ke kai benefits hain jaise:
Real estate market ka exposure mil sakta hain. That means you can access the potential profitability in the real estate market. Aap commercial property mein bhi invest kar sakte ho by this means.
You can gain this exposure even with a small amount of investment capital. For example, observe these stock prices of big real estate names. The prices might vary now, yeh at the time of recording ke figures hain.
Indiabulls - Rs 166
DLF - Rs 332
Kolte Patil - Rs 235
Oberoi Realty - Rs 694
Godrej Properties - Rs 1594
Liquidity bhi mil jati hai - chahe partial investment liquidate karna chahte ho ya poora amount bhi. Turanth, 2-3 days mein aap apna paisa return mein le sakte ho
Risk ko kam karne ke liye aapke liye kai options hai. Aap indirectly invest kar sakte go via real estate mutual funds, or via REITs. Or else aap directly real estate companies ke stocks le sakte ho. Aap apna investment diversify bhi kar sakte ho over different real estate categories, properties and locations.
Part 2 - investment opportunities in the real estate sector: is the environment positive and where to invest
Real estate mein opportunities abhi bhi hai, kyunki yeh pandemic ne sabit kiya ki:
Life bada uncertain reh sakta hai. Ghar lena important hai. Many people became adamant to ensure they have a roof over their heads
Kai families ko yeh bhi dikh gaya ki a bigger house is necessary in the long term
Ab credit bhi milna asaan ho gaya kyunki credit process bhi online ho gaya hain. Interest rates on loans are also relatively low.
Aur phir government initiative bhi hai
Kai states mein stamp duties remove kar diya gaya hai. Lower cost of homes could encourage buyers
And then there's actual numbers
Large real estate companies ke sales covid 19 ke first wave aur second wave ke baad, dono baa r, kaafi recovery dikhaya hai.
Yeh 5 cheezain real estate investors ke liye achi reh sakti hai.
To top it all, there has been consolidation - that is rationalization or reduction in stock prices - in the real estate industry. Yeh investors ke liye acha ho sakta hai kyunki the goal is to enter a trade when the stock price is low and exit when the price is high.
Part 3 - precautionary measures and risk management when investing in real estate via the stock market
Agar aapko kam confidence aur kam experience hai, toh aap real estate mutual funds ya REIT that is Real Estate Investment Trust dvaara invest bhi kar sakte ho.
The REIT - very much like a mutual fund - pools investor capital and then the pooled capital is professionally managed. Fark yeh hai ki REIT stocks ke jaise stock market mein trade bhi kiya jata hai.
REITs can be retail, residential, commercial, healthcare and office. Aap yeh saare types of properties mein invest kar sakte ho when you go for REITs.
Aapko thoda bahut security hai kyunki SEBI ne mandate kiya hai 80% investment of REIT will go towards commercial real estate, which is usually seen as more profitable. Aur earnings mein se 90% of returns have to be paid as dividends or interest to the investors. Aapko interest-dividend se bhi earnings milega aur stock price increase se bhi earnings milne ki possibility hai.
India mein filhal 3 REITs hai. Yeh hai: Brookfield India Real Estate Trust, Embassy Office Parks REIT and Mindspace Business Parks REIT.
Agar aap stocks mein invest karna chahte ho toh observe the stock price graphs, earnings and projects of the companies jin ke stocks aap khareedhna chahte ho. Always consider trying to enter when the price is low, rather than high. Ek aur baat - choose wisely: at the moment there is more demand for ready or nearly ready projects. High end and luxury projects are not seeing as much demand.
Pandemic mein, investment opportunities ke hisaab se there have been several silver linings. Real estate is definitely one of them. That said, whether you invest via real estate mutual funds, REITs or realty stocks, hamesha apna risk appetite, investment goals aur investment horizon soch kar ke hi invest karna. There is market risk in all three options. And always only invest using spare capital.
Jaane se pehle, ek baat yaad rakhiyega this podcast has been made for educational purposes only and the investor must do his own research as well.
Aise aur interesting podcasts sunne ke liye humein follow karein via youtube and other social media channels. Until then goodbye and happy investing!
Investments in the securities markets are subject to market risks. Read all the related documents carefully before investing.