Becoming wealthy through real estate is a goal many aspire to achieve. While it’s true that there are successful individuals in various fields, I personally believe that real estate has been a significant factor in the wealth creation of many millionaires. Let’s look into why I hold this view and discuss two scenarios for those interested in making money through real estate.
Firstly, it’s important to acknowledge that there are millionaires in diverse industries. However, what sets real estate apart is that many affluent individuals, regardless of their primary source of income, tend to invest in this asset class. This suggests that real estate holds a unique appeal as a means of generating and growing wealth.
One key advantage of real estate is its stability. While other investment options, such as stocks or cryptocurrencies, can experience volatile fluctuations, real estate typically exhibits more gradual changes in value. This stability provides a sense of security and is one reason why investing in real estate is considered a prudent long-term strategy.
Now, let’s explore the two scenarios for those interested in earning money from real estate. In the first scenario, if you already possess capital, you have a head start. You can allocate your funds towards purchasing properties that offer potential for appreciation or generating rental income. Conduct thorough market research, identify promising locations, and consider the property’s potential for growth or rental demand. Carefully analyze the risks and rewards associated with each investment, and consider seeking guidance from real estate professionals or mentors who can provide valuable insights.
In the second scenario, suppose you currently lack the necessary funds to invest in real estate. However, you possess a strong desire and passion to earn money through this avenue. In this case, it’s crucial to educate yourself extensively about the real estate market, investment strategies, and financing options. Begin by studying books, attending seminars, and exploring online resources that offer valuable information on real estate investment. Building a solid foundation of knowledge is crucial to make informed decisions in the future.
Another option is to start small by investing in real estate investment trusts (REITs) or crowdfunding platforms, which allow you to participate in real estate ventures with smaller amounts of capital.
In the context of the middle-class audience, where funds for real estate investment may be limited, it’s important to explore strategies that align with their financial situation. We will discuss two concepts: one for those who have capital and the other for those who don’t currently possess funds but aspire to earn money through real estate.
Let’s consider a scenario where individuals have little or no money to invest in real estate. In such cases, it’s crucial to focus on the concept of land as an investment. Land holds immense potential due to the growing population in countries like India, where the demand for housing is high. With a population of approximately 1.5 billion, many young individuals aspire to purchase their own homes. This creates a promising market for land investment.
Additionally, investing in land allows individuals with limited funds to enter the real estate market at a relatively lower cost compared to purchasing built properties. Land investments can be made gradually, as funds become available, allowing for incremental expansion of the real estate portfolio over time.
The demand for land is expected to continue rising in the coming years due to population growth, urbanization, and the aspirations of individuals to own their own homes. Land is a valuable asset that holds its worth over time, and its prices tend to appreciate rather than depreciate. Unlike other investments, such as stocks, land is considered a safe investment with minimal depreciation.
Land has always been a topic of conversation in families, often discussed in terms of lost opportunities or regretful sales. Many wealthy individuals in India have accumulated significant land holdings, which has contributed to their wealth. While the upfront cost of purchasing land may seem prohibitive in expensive cities like Mumbai, the long-term value and potential returns make it a worthwhile investment.
It’s important to note that land is a real asset, while stocks are considered paper assets. Both asset types have their advantages and disadvantages. Stocks offer liquidity, allowing for quick buying and selling transactions. However, land investments require patience and time to multiply in value. Land transactions involve negotiations between sellers and buyers, similar to the bid and ask prices in the stock market. The difference between the bid and ask price in real estate creates opportunities for negotiation and securing deals at favorable prices.
While it may seem challenging to afford land with limited funds, there are strategies that can be employed. One approach is to explore emerging locations or areas with growth potential where land prices may still be relatively affordable. Additionally, partnerships or joint ventures with investors who have capital can help pool resources and invest in land collectively.
Limited funds should not discourage you from pursuing real estate investments. Explore creative financing options such as partnerships, joint ventures, or seeking private investors. These approaches allow you to leverage other people’s capital while sharing the risks and rewards. Additionally, consider government schemes, low-interest loans, or crowdfunding platforms to secure the necessary funding for your real estate ventures.
When you lack the financial resources to invest directly in real estate, seeking employment within the industry becomes a practical approach. By securing a job, you immerse yourself in the day-to-day operations, market dynamics, and intricacies of the real estate business. This hands-on experience exposes you to various aspects such as property management, sales and leasing, property valuation, legal procedures, and customer interactions. It serves as a crash course, enabling you to acquire practical skills and industry insights that cannot be easily obtained through traditional education or coaching.
Working on inventory management exposes you to the diverse range of properties available in the market. You learn about different types of properties such as plots, flats, floors, and commercial spaces. By actively engaging with the inventory, you gain a deep understanding of the market dynamics, trends, and property values. This knowledge empowers you to make informed decisions and provide valuable insights to potential buyers or sellers.
Managing inventory exposes you to various real estate procedures and legalities involved in property transactions. You gain insights into documentation requirements, property registration processes, and legal frameworks. This knowledge is invaluable when guiding clients through the buying, selling, or renting process, ensuring compliance with legal regulations and safeguarding their interests.
In the pursuit of financial success, understanding the concept of commissions and real estate deals is crucial. Commissions typically range from 1% to 2%, with 2% being common in flat and floor transactions, and up to 5% in commercial deals. However, it is essential to recognize that earning substantial commissions requires dedication, time, and skill development.
A crucial aspect of earning commissions is the ability to complete transactions successfully. In the real estate industry, deals are known to involve significant cash payments, despite regulations discouraging cash transactions. This practice has led to a lack of transparency in the sector. However, it is vital to understand that ethical and legal business practices are essential for long-term success.
For many from the middle-class background, witnessing transactions involving lakhs or crores of rupees might seem far-fetched. However, with the right approach and hard work, anyone can enter the world of real estate and experience these transactions firsthand.
A truly wealthy person exudes an air of confidence and composure that comes from genuine prosperity. However, it is crucial to distinguish between those who showcase their material possessions as a form of showmanship and those who have achieved true wealth through hard work and wise investments. In India, being a millionaire means possessing ten lakh rupees, which, when converted to the dollar at the current exchange rate of 80 rupees, amounts to 8 crore rupees. While this may be considered wealth, there are individuals in the country with assets worth over 100 crore rupees, truly exemplifying immense wealth.
Social media often portrays individuals who appear rich and extravagant, but in reality, they may only be indulging in showmanship. True wealth is often held by individuals whose affluence has been amassed over generations, and they exude a sense of understated richness that comes with their legacy. These individuals have not only acquired wealth but also acquired the knowledge and skills to manage and grow their assets wisely.
Getting a job in a real estate company or with a builder can offer an opportunity to learn valuable skills, build networks, and witness firsthand how deals are made. The commissions in such roles can be lucrative, but the focus should always be on learning and honing one’s abilities.
The key to success in this field lies in generating leads of potential clients with significant spending capacity. It is vital to find mentors and seniors who can provide the necessary guidance and knowledge in this specialized aspect of lead generation.
In the real estate field, it is common to find individuals working with various dealers, some earning high salaries, while others earn a modest income. The difference lies in their vision and determination to succeed. Vision plays a crucial role in shaping one’s aspirations and goals. Without a clear vision, success may remain elusive, just as Virat Kohli emphasized in his speech about his journey to becoming a cricketer.
When one is actively involved in a field, they gain insights and clarity, which helps in formulating a vision for the future. For this reason, taking action, such as getting a job, is essential to lay the foundation for a successful journey.
As the saying goes, “As far as you can see, go there first,” it is vital to take measured steps towards one’s goals. Progress may be slow at times, but it is essential not to rush or get discouraged by challenges. Consistent efforts will gradually reveal the path ahead.
For those fortunate enough to have money to invest, caution is necessary. When considering investing in real estate, the three L’s—location, location, location—play a crucial role. Buying property in a well-established and desirable location is a wise decision, as such areas tend to appreciate in value over time. On the other hand, investing in an underdeveloped or less desirable location may yield lower returns.
While shops, flats, and floors can be constructed, the land itself is a finite resource, and no one can create more of it except for nature. This realization underscores the enduring value of investing in real estate.
This was to highlight the importance of taking action and investing in real estate, even if the initial capital may be limited. By focusing on acquiring land, even in small portions, individuals can lay the groundwork for long-term wealth creation. Real estate is portrayed as a vast and exciting topic that offers endless opportunities for growth and prosperity.
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