When it comes to investing, fixed deposits and mutual funds are at the top of everyone’s minds.
According to a survey conducted by SEBI, more than 95% of households preferred to park their funds in fixed deposits, with only 10% preferring mutual funds and stocks. (Source: Financial Express) However, inflation rates are rising higher than the bank’s interest rates and diversifying your portfolio is vital in building and preserving wealth.
With an array of investment options available, it's crucial to understand the various types of investment management strategies to make informed decisions that align with your financial goals. What makes real estate asset management stands out is its tangible nature, providing investors with properties they can control and potentially benefit from over time.
Types of Investment Management
1. Real Estate Investment Trusts (REITs)
REITs are like the ‘mutual funds’ of the real estate industry. These are companies that own, operate, or finance income-generating real estate across various sectors. Investors buy a piece of property and get a slice of the profit based on their ownership. Investing in REIT companies allows individuals to benefit from real estate ownership without the need for direct property management.
REITs are increasing in popularity as they offer high dividend income and consistent capital growth. India recorded a 6.85% year-on-year growth in the total leasable area of listed Real Estate Investment Trust. (Source: Moneycontrol)
Bonds are debt securities issued by governments, municipalities, or corporations. It’s like lending money to a company or government. They promise to pay you back the amount you invested (the principal) along with interest over a specific period. It's a safer investment compared to stocks and can provide a steady source of income and help preserve your money.
3. Certificate of Deposit (CD)
CDs are low-risk, interest-bearing deposits offered by banks with fixed maturity dates. They offer a predictable return and are a suitable choice for short-term savings goals.
4. Hedge Funds
Hedge funds are investment funds that pool money from accredited individuals, limiting access to the general public. They use complex strategies to potentially profit in both rising and falling markets. Due to their complex nature and higher risk, hedge funds are typically limited to high-net-worth individuals and institutional investors.
5. Private Equity
Private equity involves investing in private companies that are not publicly traded on stock exchanges. This option is typically reserved for HNIs and institutions looking for long-term capital appreciation.
Importance of Real Estate Asset Management
Real estate asset management plays a pivotal role in maximising the value and efficiency of real property investments. Whether it's residential, commercial, or industrial properties, the top real asset management companies ensure that real estate assets are utilised to their fullest potential while minimising risks and costs.
Consistent Cash Flow + Strong Yields + Tax Benefits + Long-term Viability = Sustainable Alpha
These are the main benefits of investing in real estate asset management. Through strategic allocation of resources, timely maintenance, and responsive tenant relations, asset managers are able to successfully leverage wealth through real estate.
Importance of Choosing the Right Real Estate Management Partner
With the growth of REITs, ‘How to invest in a REIT in India?’ is the most common question that arises. When navigating the complex landscape of real estate investment, selecting the right management partner can make all the difference between success and disappointment. A reliable and competent real estate management partner brings expertise, experience, and industry knowledge to the table, acting as a trusted advisor in the pursuit of your investment goals.
At Integrow, our main focus is delivering sustainable alpha to all stakeholders. With an in-depth understanding of market trends, regulatory frameworks, and best practices, we formulate tailored strategies that align with their specific objectives. We help investors offload their day-to-day operational burdens, allowing them to focus on broader investment strategies and ventures.
The synergy between an astute investor and a proficient management partner creates a strong foundation for realising the full potential of real estate investments, fostering long-term prosperity and stability in a competitive market.
Diversifying your investment portfolio is an essential step to secure your wealth. Real Estate Asset Management (REAM) offers valuable portfolio diversification through potential cash flow and capital appreciation. However, it’s important to consult the right REIT companies to help you understand how to invest in REITs in India to meet your financial goals.