Real estate can provide rental income, long-term appreciation and portfolio diversification.
Returns depend on location, purchase price, property type, tenant demand, maintenance expenses, documentation and resale liquidity.
Gross Rental Yield = Annual Rent ÷ Property Purchase Price × 100
Net rental yield also considers maintenance, vacancy, repairs, taxes and brokerage.
Property appreciation is the increase in the market value of a property over time.
It may be driven by infrastructure development, employment growth, limited supply, improving connectivity and rising demand.
Properties bought for rental income should have strong tenant demand and reasonable rental yield.
Properties bought for appreciation should be in locations with upcoming infrastructure, limited future supply and improving economic activity.
Residential property may offer a larger tenant pool and lower investment amount.
Commercial property may offer higher rental yields and longer leases, but it can involve higher vacancy risk and a larger ticket size.
The main risks include:
Important value drivers include:
