One of the most reliable methods Indians may create money is real estate. Purchasing real estate, however, calls for a large outlay of funds, documentation, and upkeep. Suppose you could invest in real estate free from these complications? A real estate ETF then comes in quite handy.
Using a real estate ETF, let’s investigate how you may smartly invest in real estate.
An ETF in Real Estate:
An exchange-traded fund (ETF) in real estate is one which invests in real estate-related company stocks. Real estate developers, building companies, and Real Estate Investment Trusts (REITs) can all fit under this heading.
Investing in a real estate ETF exposes you indirectly to the property market without really purchasing real estate or structures.
Why Would One Invest in a Real Estate ETF?
Many Indian investors are picking a real estate ETF for these reasons:
- Low entrance cost: Start small; there is no need to purchase real estate.
- Simple liquidity: Buy and sell on the stock market whenever.
- Diversification: Invest in a portfolio of equities connected to real estate.
- No documentation nor property management.
- Profit from property expansion via REITs and rental revenue.
ETFs in Real Estate versus Direct Property Investment:
| Characteristic | Real Estate ETF | Physical Property Investment |
| Liquidity | High (may sell at any moment) | Low (may need months to sell) |
| Variations | High | Low |
| Management Demand | None | Indeed, tax and upkeep |
| Cost | Low | High |
Indian Real Estate Investment Prospective:
Although pure real estate ETFs are still brand-new in India, you can make investments in:
- REITs, or Real Estate Investment Trusts, posted on Indian stock markets
For instance: Embassy REIT, Mindspace Business Parks REIT, Brookfield REIT
- Purchase commercial office real estate.
- Provide capital appreciation plus rental income.
- Purchase commercial office real estate.
- Global mutual fund platforms allow international real estate ETFs
- Track US, Singaporean, etc. property markets.
- Greater risk but also better world exposure.
- Track US, Singaporean, etc. property markets.
- Theme Mutual Funds with Real Estate Focus
- Certain money goes into enterprises connected to real estate.
- Not precisely a real estate ETF, but rather in line in approach.
- Certain money goes into enterprises connected to real estate.
How to Invest in Real Estate ETFs:
- Invest in a REIT or Real Estate ETF here.
- Create a trading and demat account.
- Select an ETF with a listed REIT or real estate focus.
- Use your trading platform to place an order.
- Track your returns as with any other stock.
Who Should Make Investments?
- If you want property exposure without purchasing actual real estate, you may look at a real estate ETF or REIT.
- Your consistent revenue comes from rental returns.
- You want a somewhat cheap and hassle-free solution.
- You wish to vary your portfolio outside gold and equities.
Conclusion Notes:
The contemporary approach to invest in property with freedom and simplicity is a real estate ETF. For Indian investors looking to profit from real estate expansion without having to deal with the heavy expenses and work involved in owning actual assets, it’s ideal. You may start small and expand slowly using REITs currently traded on Indian marketplaces.
