We connected with VLA Ambala, SEBI Registered Research Analyst and Co-Founder of Stock Market Today, to understand the practical steps beginners should follow when entering the world of real estate investment:
How To Get Started In Real Estate Investment
Step 1: Begin With Clear Goals And Research
Before investing a single rupee, clarify what you want to achieve. Are you aiming for rental income, long‑term capital growth, or property development profits? Once your aim is clear, invest time in researching the market. Understand local property laws such as India’s RERA Act, the landscape of Tier‑1 and Tier‑2 cities for real estate investment, and neighbourhood growth prospects.
VLA Ambala says, “Look for places that have a higher population, low vacancy levels, and rising rent demands. The Thane area in Mumbai, for example, saw realty costs soar by 46% in just three years. Similarly, projects in Gurgaon Sector 61 have recorded a 100% increase in just four years.”
Step 2: Assess Your Finances
Real estate requires careful financial planning. Determine your budget, inclusive of stamp duty, registration, maintenance, and potential vacancy periods. Explore financing options such as home loans or partnership models. If you’re an NRI, familiarise yourself with FEMA regulations and international funding flows. Ambala advises starting modestly, targeting manageable property investments rather than jumping into high-stakes deals.
Step 3: Select Your Investment Strategy
There are diverse paths to real estate investment. You might choose direct ownership of residential homes or commercial units, or opt for indirect exposure through REITs or syndicated investments. VLA Ambala suggests, “Real estate provides several options, such as rental properties for passive returns, fix-and-flips for quick profits, and REITs or crowdfunding for easy investing. Notably, REITs have historically averaged an 11.1% annual return since 1972, which often makes them a solid choice for a novice.”
Choose what suits your risk appetite, experience, and long‑term vision.
Step 3: Location And Property Selection
“Shop for competitive mortgage rates and select properties you can handle locally. Investing in real estate is a very fulfilling experience, but it depends on how you do it. Armed with the right information and an attitude of learning, even a beginner can create wealth for the long term with intelligent, sophisticated decisions,” shares VLA Ambala.
Early investors should pick areas they can monitor, preferably cities where they have familiarity or access. Look for neighbourhoods with upcoming infrastructure, rental demand, and clear legal titles. Be cautious of flashy developments and instead, focus on areas with sustainable growth prospects and tenant demand. Make sure to do a legal inspection and verify property titles.
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Step 4: Start Small, Then Scale Gradually
Ambala and seasoned investors advise starting with a single asset, perhaps a rental flat or joint‑venture project, and learning the ropes. This practical exposure helps you refine your strategy over time. As experience builds, gradually expand your portfolio, reinvesting gains into new opportunities, whether direct properties or REITs.
Step 5: Monitor And Optimise Your Investment
Review rental yields, maintenance expenses, tenant satisfaction, and property appreciation over time. Tax regulations change, and staying informed ensures your returns remain efficient.
If managing tenants becomes a burden, consider professional property management services.
Real estate investment is not about quick wins, it’s a journey built on planning, patience, and continuous learning. Consult a financial advisor for more information.
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