What is Real estate investment and how to invest in Real estate?

 Investment In Real Estate.

📌Role of real estate in a portfolio:-

♦ Income in the form of rent.

♦ Property price appreciation.

♦ Diversification Benefits :- Co-relation of real estate indices with bond is much lower than equity, it means diversification benefits is higher with Fixed Income.

♦ Inflation Hedge:- Rent & Prices typically rise with inflation.

♦ Tax Benefits:-  You can think of Depreciation tax shield(DTC) in case of private equity real estate investment and tax advantage status of REITs of public real estate investment. 

📌Forms Of Real Estate:-

★ Residential Real Estate :- it is an area for people to live on.

  🏠 Single Family Home.

  🏩 Multi-Family Home (Flats). :-Prime determinant is population growth & demographics.

★ Commercial Real Estate :- That means income producing real estate.

  🏪 Retail Spaces  :- it depend upon consumer's spending.

  🏢 Office Building  :- it depend upon job growth.

  🏨 Hotels and Motels :- it depend upon travel and tourism.

  🏭 Industrial and warehouse :- it depend upon production ( production is a major factor while calculating GDP).

★ Other Commercial :-

🌿Farmland :- income stream arising from sale of crops and also from land price appreciation. crops has to harvest every year irrespective of crops price.

🌳Timberland:- income stream arising from sale of lumbers, it will grow at the rate of 5% to 7% and there will be a richer harvest next year.

1. Equity Real Estate Investment :-

• Private Equity real estate investment:- Directly buy a property, either as sole ownership (by using entirely your money or by taking loan)  or, as partnership or, commingled.

• Public Equity real estate investment:- it is an indirect way to buy a property, by investing in REITs or REOC. its just like buying units of mutual fund which is investing its money in real estate. (REITs and REOC are explained in detail bellow).

2. Debt Real Estate Investment:-

• Private Debt real estate investment:-  Giving loan to buy a property. (best eg:- Banks, NBFC)

• Public Debt real estate investment:- Buying Mortgage-backed-securities (MBS).it means indirectly you are refinancing the mortgage. it is also a form of lending,.  

Our Focus Area is Equity Real Estate Investment .

Comparison between Private equity real estate investment v/s Public equity real estate investment.  

Private Equity Real Estate Investment	Public Equity Real Estate Investment
It requires expertise in maintaining properties.	Ownership & maintenance is professionally handled by REITs managers.
Lack of liquidity.	Highly Liquid.
Private Equity Real Estate Investment is Suitable for Rich, Sophisticated investors who can exploit inefficiency in the private equity real estate space.	Public Equity Real Estate Investment is Suitable for small investors lacking expertise and seeking some diversification while at the same time enjoying liquidity.

📌Risk Factors of Real estate investment :-

💥Business Conditions :- It depend upon the Economy. #Acche din aayenge.

💥Cost & availability of capital :- if debt market are not doing well, that is debt(loan) is not easily available, real estate price will be down↓.

💥Legal And Regulatory risks.

💥Lack of Liquidity.

💥Environmental risks.

💥Lack of information about property.

💥Unexpected Inflation( Rise in price ).

Thank you Stay happy and safe..