Discover Real Estate Investment in India - Pros, Cons and alternatives
The Indian economy is the fastest-growing large economy globally, growing at an estimated 7.3% p.a. in 2024. A few sectors stand out as beacons of the nation's growth trajectory, the real estate sector in India being one of them. The Indian real estate sector is forecasted to grow to a USD 1 trillion market by 2030.
If you are looking at avenues for securing a financial future, real estate investment in India may appear a promising proposition, but, does come with a lot of complex factors as well. The limited supply of land in prime locations and unhinged urbanisation have led to a supply-demand imbalance, presenting both challenges and opportunities.
In this blog, we will explore how to invest in real estate in India, the best place to invest in real estate in India, which is the best real estate investment in India, and look at the flip side to compare alternative investment avenues for a well-informed decision. Contrary to conventional wisdom, we delve into the notion that real estate investment in India might not always be the optimal route for generating high returns for you, especially when compared with alternatives like Gullak
Get higher returns than real estate investments
How to Do Real Estate Investment in India?
Real estate investment in India offers a diverse range of opportunities across three main channels:
- Residential real estate investment in India encompasses apartments, flats, independent houses, villas, gated communities and integrated townships. This caters to the housing needs of the burgeoning urban population. However, the gross rental yields for this channel are only between 1.5 and 3.5% p.a., depending on the location of the property and other factors.
- Commercial real estate investment in India presents investment avenues in office spaces, retail spaces and industrial properties. Additionally, specialised real estate investments, such as healthcare, hospitality and warehousing and logistics, cater to niche sectors with promising growth potential.
- Real Estate Investment Funds (REIFs) and Infrastructure Investment Trusts (InvITs) are attractive options if you are seeking diversified exposure through real estate investment in India. These investment vehicles pool funds from multiple investors to invest in a diversified portfolio of real estate assets, offering liquidity and professional management. The average returns for InvITs are in the range of 8-10%, however, the higher returns are due to high-risk exposure and may not be suitable if you do not have a high-risk appetite.
The Best Real Estate Investment in India
Commercial real estate is a preferred investment choice due to higher rental yield when compared to residential properties, the potential for portfolio diversification and capital appreciation. However, while the rental yields for commercial properties are between 8-11% p.a., there are both pros and cons of commercial real estate investment in India.
| Pros | Cons |
|---|---|
| Stable source of high rental income. | High ticket investments, typically valued between ₹25 and ₹30 crore. |
| Commercial rental leases last for 3-9 years, providing a stable income source. | Complex asset management processes requiring professional expertise. |
| Potential of capital gains from property sale with long-term appreciation. | Requires extensive research and detailed legal processes. |
Best City for Real Estate Investment in India
There are only a handful of hotspots for real estate investment in India. Even those are mainly limited to a few big cities in the country. These include -
| City | Returns | Investment Hotspots |
|---|---|---|
| Mumbai | up to 7% | BKC, Lower Parel, Andheri, Powai, Navi Mumbai |
| Delhi-NCR | 5-13% | Connaught Place, Saket, Nehru Place, Gurugram, Noida |
| Bengaluru | 8-10% | Whitefield, Electronic City, Outer Ring Road, Indiranagar, Koramangala |
| Chennai | 6-8% | Guindy, Teynampet, Mount Road, OMR, Ambattur Industrial Estate |
| Hyderabad | 8% | Gachibowli, HITEC City, Madhapur, Jubilee Hills, Banjara Hills |
| Ahmedabad | up to 12% | S.G. Highway, Maninagar, Chandkheda, Shela, Ghuma, Thaltej, Satellite City |
How to Maximise Returns on Real Estate Investment in India?
Real estate investment in India will require you to select the right location, conduct market research, invest in upcoming neighbourhoods, understand rental demand, spend on refurbishing your property, and have effective property management. For the best place to invest in real estate in India, you may require professional asset management services to deal with the complex processes and legal requirements.
Thus, it is prudent weigh your options in other asset classes that are less demanding and provide higher returns. Let's explore Gullak and how it differentiates itself from real estate investment in India.
Real Estate Investment in India vs Gullak
Gullak makes it easier to accumulate gold digitally without having to buy a large amount in one go. You can start buying gold from just ₹100/day and gradually build your gold savings over time.
Here's a comparison of some key differences between real estate investment and building gold savings through Gullak:
| Parameter | Real Estate Investment in India | Gullak | ||
|---|---|---|---|---|
| Gold Accumulation | Real estate generally requires a substantial upfront investment. | Instead of buying gold in one go, you can start buying gold on Gullak from just ₹100/day and gradually accumulate gold over time. | ||
| Flexibility | Selling or partially liquidating a property can take time and may involve significant effort. | You can pause or restart your recurring gold savings whenever you want and choose between daily, weekly or monthly SIPs, as well as one-time purchases. | ||
| Investment Required | The investment amount is generally substantial, reducing the ease of entry. | You can start building your gold savings from just ₹100/day.Usage | Real estate is primarily held as a property investment and may require a complete or partial sale to access its value. | Once you build your gold savings, you can use them towards jewellery across Gullak's 5000+ jewellery store network, including leading jewellers such as Tanishq, Malabar and CaratLane. |
Start building your gold savings from ₹100/day
Conclusion
Even after selecting a suitable city for real estate investment in India, buying a property can involve a substantial upfront amount, extensive research and lower flexibility when you want to access only part of your investment. Gullak offers a different way to build gold savings by letting you start from just ₹100/day and accumulate gold gradually over time. You can choose daily, weekly or monthly SIPs or make one-time purchases, with the option to pause or restart your recurring savings whenever you want. Once you have accumulated enough gold, you can also use it towards jewellery across Gullak's 5000+ jewellery store network, including leading jewellers such as Tanishq, Malabar and CaratLane.
Disclaimer: Investors should do their own due-diligence before choosing any financial asset
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