Successfully Investing in Real Estate in India – Is Now The Right Time?

Sahil Mehta, whose parents immigrated from India to the US, co-owns five investment properties with his older brother that are worth around $9.4 million — at just 25 years old. For those who wish to financially benefit from investing in real estate in India, however, doing so may sound like a major financial risk. From the benefits that today’s market offers to how you can pull it off even without having the cash upfront, here’s what you should know.

The benefits involved

When it comes to investing in real estate in India, there are a number of benefits. For example, the real estate market has grown to Rs. 65,000 crores from Rs. 12,000 crores in 2019 according to the Indian Brand Equity Foundation. Additionally, the sector is expected to grow in 2021 while recovering losses that occurred in 2020 in addition to the potential for appreciation with regards to property value highlights just how valuable such an investment can become. Along with the promising potential of the real estate sector in India, investing in real estate is also known to come along with additional benefits. For example, many investors may choose to rent out their properties and become a landlord, which can not only become a lucrative career but is a great way to generate steady cash flow. 

Important considerations before buying

For those looking to invest in property in India, there are several things to consider before signing the paperwork. For example, successful investment in residential property should involve the careful research and consideration of location, accessibility, and the distance from the property to neighboring cities (to name just a few), all of which will factor into the property’s value later on. Reviewing a set of historical transaction data (if at all possible) for the property is another great idea when looking to potentially invest, as it will allow you to gain some insight regarding key factors like the demand, pricing, and rental yields. 

How a home purchase loan can help

For those looking to invest in real estate property in India though aren’t able to secure a traditional mortgage (such as due to poor credit), then a home or property purchase loan may offer a unique solution. A property purchase loan allows a buyer and seller of a home to come to an agreement to work out the payment amongst themselves without the involvement of a third party, a process that is often called “seller financing”. However, despite the obvious benefits, there are some important aspects of this home buying option to consider before making the ultimate decision. For example, interest rates are often higher for buyers who are on a purchase money loan, though closing costs are usually lower than with a traditional mortgage due to the fact that a mortgage broker (and the resulting additional fees) aren’t present. Additionally, it’s important to keep in mind that even though such a situation doesn’t involve a traditional mortgage, it’s still governed by mortgage laws.
Investing in real estate properties in India has a multitude of benefits. Aside from being a lucrative side hustle or even career, the market outlook shows to be promising for those who decide to take the leap, and not having the money upfront shouldn’t be an automatic deterrent. With the help of a home purchase loan, one can start investing as soon as possible and without a traditional mortgage setup.

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