We, at Real Rich, have been one of the loudest voices advocating for Indian investors to get into the real estate market. However, as with any other field, investing in real estate is an exercise that is surrounded by myths. These myths, whether they be hopeful or despairing, are not helpful to a new investor! Today’s article aims at dispelling the 5 most popular myths about Indian real estate.
Myth 1 – The real estate market is a stagnant market
This is something that we have been at pains to communicate! The market in India is not only NOT STAGNANT, but it is actually one of the MOST GROWING real estate markets in the world. With India literally being built now, new buildings – be they residential, commercial, high or low end – are continuously being built. This means that an investor has lots of options to choose from.
Myth 2 – To invest in the market, one needs a lot of capital
This could not be further from the truth – especially in a country like ours, which has so many affordable housing projects and low-density commercial enterprises. Yes, the “big earner investments” will require a lot of capital, but one must start somewhere! If the first time investor was to make use of all the tools at their disposal – such as home loans or the aforementioned affordable housing projects – they will be able to make their way up the real estate ladder and eventually begin to pursue those “big earner investments” later.
Myth 3 – The real estate market is a zero-maintenance passive earner
While real estate can bring you passive income, a property needs to be maintained well. A misconception, especially for the first time landlords, is that once a property is bought and rented out, it needs very little attention. To ensure that you maintain a tenant over a long period of time – or, if you’re running a short-term rental that you maintain a steady flow of renters – you need to manage your property well! If you choose to sell it off later, you need to keep in mind that a well-maintained property is always going to fetch you great returns.
Myth 4 – Real estate is a short-term investment tool
While real estate is one of the best ways of wealth creation, one needs to exercise a bit of patience. You need to give time for the value of your property to appreciate. We are not saying that there are absolutely no options available for using real estate as a short-term investment tool. But those are risky and can come with hidden costs. So it is always better to keep a long-term goal in mind while investing in real estate.
Myth 5 – Investments are only practical in Tier 1 cities
Given that Tier 1 cities in India have the highest land value, highest demand and highest income, it may seem that it is only logical to invest in Tier 1 cities – like Delhi, Pune, Mumbai, Bangalore etc. – and to ignore the market in Tier 2 cities. However, the market in Tier 2 cities like Chandigarh, Nagpur, Ghaziabad etc. is not only cheaper for the investor, but the demand is just as high as it is in Tier 1 cities! A smart investor should not ignore this!
To conclude, investing in real estate may seem like a huge task, but if you do your research well, understand the market and avoid believing in the myths that float around, you can find that perfect property, which will yield great returns for you.
