Strategies to Invest in Real Estate in Chennai in 2024

Posted by Nandha Kumar
3
Sep 10, 2024
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Chennai has become one of the most preferred destinations for real estate due to its rapidly growing infrastructure. In addition to this, the availability of all the essential amenities and easy accessibility attract homebuyers and investors across the country to invest in Chennai. This article discusses some of the significant strategies to invest in real estate in Chennai.

Traditional Investment Method

Buying villas or apartments for sale in Chennai, or leasing an asset for the long term and renting it, is the classic way to go. This is the simplest method, yet it is essential to consider that it requires yearly maintenance and an initial investment. While buying, you don't need to go to the sub-registrar's office if the property is residential.  Make sure that the property is free from any legal hassle. You don't need to go to the sub-registrar's office if the property is residential. It will be necessary to draft similar leases for each tenant, and the monthly rentals you collect will be used to calculate how profitable your investment was.

Buy, Sell, and Gain

If you have good capital, then you can buy a property, like apartments or villas in Chennai, that requires maintenance and then fix it up. Once you are done fixing, you can sell the property at a much better price. Even though this method does not guarantee ownership, with proper planning, it stands to gain good returns on investment. It is essential to look out for market demand and supply in the particular area where your property is located to get a rough estimate.

Rent Existing Property

Let’s say you have a portion of your apartment or villa left unused. Why waste it when you can rent it? Yes, if you are looking to invest and gain through real estate, then you can consider this option. However, in this case, you will have to deal with space restrictions and extra traffic in your living area. If you are looking to choose this option, then ensure that all your requirements are mentioned in the terms and conditions of the rental agreement to avoid conflicts.

Mutual Funds, Real Estate Investment Trusts, and Exchange-Traded Funds

You can invest in real estate by buying ETFs that invest in real estate stocks like publicly traded home builds. In addition to this, you can also purchase mutual funds and exchange-traded funds (ETFs) that are invested in real estate. Mutual funds that invest in property management companies and real estate developers are available. Mutual funds are actively managed, whereas ETFs are passively managed by fund managers.

It is essential to note that high liquidity and low costs come with ETFs and mutual funds, whereas with REITs, investors can invest in a single fund for multiple real estate assets. To ensure their relative stability, all of these choices still include real estate. Expected returns, however, could only be appropriate for a small percentage of investors' long-term objectives.

Partial Ownership

Partial ownership enables investors to store their money in real estate while drastically lowering the investment cost. Real estate is still one of the most popular reinvestments in India. Partial ownership involves several investors, similar to REITs, but concentrates on a single asset at a time. Investment companies that deal in fractional ownership of real estate or property frequently seek out properties based on thorough market analyses and past rent performance in the region. The asset is then subjected to additional analysis in light of the potential returns it may yield.

Investors can diversify their portfolio by holding partial interests in a variety of asset groups, including industrial floors, parking lots, warehouses, and commercial offices. It's simple to withdraw from a fractional ownership investment. You have two options for transferring ownership: either wait until new tenants move in to make the decision to keep or sell the asset, or use the management firm's portal or services to sell your share.

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