What are the best way to invest in todays market ?
depends on your financial goals, both long term and short term. It also depends on what you can afford, whether or not you prefer passive or active income and what type of financing you will use and/or qualify for.
Buy land, they are not making it anymore!
India is a country where most of the millionaires became millionaires because their forefathers bought some property and that property appreciated immensely over time giving them manifold returns!
So, there are a few ways you can earn money out of real estate and they are elucidated as follows:
Long term appreciation - This is the situation wherein you a piece of land(residential, commercial or industrial) in a newly developed peripheral area of a huge city with great growth prospects and they wait for a few years for the property to become a multibagger. The gains from such appreciation are called long term gains. This is my personal favourite Way of investing in real estate because it can give the highest returns and doesn’t require much brains. Also the returns from long term capital gains are subjected to the lowest tax rates i.e 20%.
Investing for monthly rental returns - You can invest in a variety of properties for rental returns and each type of property shall give you varying returns. This is mostly suitable for people who want a regular and stable income and cannot afford to wait for a long period of time. Such properties mostly exist in urbanised areas and do not appreciate much in the long term. Following are some estimated returns
Commercial Property - 6% PA
Industrial property - 5% PA
Residential property - 2.5% PA
Trading real estate - Many people expect to earn returns on their real estate investment within a short period of time. Such people usually buy a property by paying 10–20% as earnest money(Bayana) and get a time to pay the rest within 2–3 months. If they are able to sell the property within 3 months at a higher price than what they had bought it for, say suppose at 110% of the price. They’ll earn huge returns on their investment but they might also lose all of their money invested if the property doesn’t fetch the value that they are paying.
There are other ways of investing in real estate as well such as virtual real estate which are not that common as of now.
So there is no one best way of investing in real estate, it all depends on you financial situation, you expected returns, your future plans. Keeping all of this in mind, real estate is the only way an average person can become a $ millionaire!