Real Estate, What It Is and How It Works

What is Real estate:

The term real estate means real, or physical property. Real estate consists of land and the buildings on it. This also includes any resources such as water, crops or minerals.
Urbanization and economic growth have created a great demand for quality real estate in India and is the most preferred for asset investment!
Real estate is of 4 types:

Residential real estate, Commercial real estate, Industrial real estate and lands.

Residential real estate:

The properties for residence such as individual homes, apartments, etc. which are for residential purposes. The highest in demand and one of the emerging businesses in the country!
This is a dynamic sector and is flourishing in recent years. With the transparency improvements like RERA, the home buyer being the “Financial creditor”, the industry is in a better shape.
Buying residential real estate depends on various factors like location, water, the transport facilities, availability of schools and other essential services nearby, etc.
Developers like GP Homes, being experienced and reputed in the field for more than 15 years, having 950+ satisfied customers and various floor plans, encouraging site visits, provides hassle free payments and easy documentation. They have a brilliant team to ensure excellence and finesse go hand in hand! Their many happy customers stand testimony to this! The property value of such projects climbs high based on the growth in the nearby areas.

Commercial real estate:

The non-residential properties like restaurants, malls, offices, shops, hotels or services used for business. This generates steady income as profit per square foot is considered.
Buying or leasing commercial real estate is different from residential real estate. The lease in general is longer than the residential lease and cost is also more but with steady income.

Industrial real estate:

The properties like factories, warehouses, manufacturing companies, etc. Generally, this is for production and distribution of goods. The demand for warehouses and distribution centers are increasing as many e-commerce companies are making their presence. More investors are now ready for this sector because of the demand.

Lands:

This means vacant lands, plots or farms. Investing in lands is for the long term and farmlands for agriculture or organic farming. This is preferred investment because of the high costs in residential real estate. Vacant plots can be used to later build individual homes or villas. But keeping an eye on maintenance and Government policies is important to avoid encroachment.
Another option is to let out the land for industrial use where the rent will be the income. Land resale value is better than residential real estate.
We can also invest indirectly by buying the shares in real estate.

How it works:

Real estate works because the value of the properties rises, and profits could be made. The basic activities are buying, selling and leasing.
The universal rule is to buy at a lesser cost and sell it at a higher cost! When a property is bought, a sale deed is made and when the property is sold, the name in the deed changes to the buyer. Investors also buy with the help of banks and other financial institutional loans based on their income and repayment capability.
From builders to architects and engineers and real estate agents — they are all a part of this booming industry in India and contribute in their own little ways.
If we are planning to invest, a lot of homework needs to be done before taking a plunge directly! This can be done by the person himself or to take the help of an expert.

The Expert:

A real estate expert is sought after, who has the property listings and can help the buyer and the seller complete a transaction. That expert is called a “Real estate agent”.
A real estate agent is a person whose business is to arrange for selling, buying or leasing a property abiding the law. Since the competition is too high, the agent’s market knowledge and negotiation skills need to be exemplary. His or her networking skills, use of technology and online presence gives an edge. He is the intermediary between the seller and the buyer.
The agent charges commission for their services. The agent must have a real estate registration certificate from RERA.

Conclusion:

Real estate is one of the oldest forms of Investment. Everyone aims to invest in assets according to their budget and the returns are rewarding as the industry is always growing.

The Government initiatives like smart city, metro, etc., encourages a vast development in real estate in all the tier 1 and tier 2 cities. This is the most preferred investment by the NRIs due to its growth and transparency initiated by the Government.