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Real Estate Investing: Minimum Investment for a Beginner?

Ramalingam

Ramalingam Kalirajan  |7194 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 25, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Indu Question by Indu on Jul 16, 2024Hindi
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Hlw SIr Good evening I want to know about Reits.. Real Estate investment. Plz guide me of how much min investment I will make.

Ans: REITs are companies owning income-producing real estate.
They allow individual investors to earn dividends without buying, managing, or financing properties.
Advantages of REITs

Liquidity: Easily bought and sold on stock exchanges.
Diversification: Invest in different property types and locations.
Regular Income: Dividends from rental income.
Professional Management: Managed by professionals ensuring efficiency.
Minimum Investment

Varies: Depends on the specific REIT and platform.
General Range: Can start with as low as Rs 5,000 to Rs 50,000.
Disadvantages of REITs

Market Risk: Subject to market volatility like stocks.
Fees: Management and transaction fees can reduce returns.
Dividend Tax: Dividends are taxable, affecting net returns.
How to Invest in REITs
Through Stock Exchanges

Listed REITs: Available on stock exchanges.
Process: Similar to buying stocks; use a demat account.
Mutual Funds

REIT Mutual Funds: Funds that invest in REITs.
Benefit: Professional management and diversification.
Tips for Investing in REITs

Research: Understand the REIT's portfolio, performance, and management.
Diversify: Don't invest all in one REIT; diversify across sectors and regions.
Long-Term Perspective: Hold investments for a longer period for potential growth.
Alternatives to Direct REIT Investment
Actively Managed Funds

Flexibility: Fund managers can adapt to market changes.
Potential for Higher Returns: Aim to outperform index funds.
Regular Mutual Funds

Guidance: Investment through Certified Financial Planners ensures professional advice.
Convenience: Easier management and oversight.
Final Insights
Start Small: Begin with a manageable amount and increase gradually.
Monitor Regularly: Keep an eye on market trends and performance.
Consult a CFP: Seek advice from a Certified Financial Planner for tailored guidance.
Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam

Ramalingam Kalirajan  |7194 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 30, 2024

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SIR, GOOD DAY. I WOULD LIKE TO INVEST IN REITs. PL ENLIGHTEN ABOUT VARIOUS REITs IN INDIA AND TAXATION ASPECTS THERE TO. THANKS AND REGARDS
Ans: Real Estate Investment Trusts (REITs) are an increasingly popular investment option in India, offering opportunities to invest in income-generating real estate assets. Here's an overview of REITs in India and their taxation aspects:

Types of REITs: In India, there are primarily two types of REITs: Equity REITs and Mortgage REITs. Equity REITs own and operate income-generating real estate properties, while Mortgage REITs provide financing for real estate investments.
Listed REITs: Currently, there are a few listed REITs in India, including Embassy Office Parks REIT and Mindspace Business Parks REIT. These REITs own commercial properties such as office spaces and lease them out to tenants, generating rental income for investors.
Taxation Aspects:
Dividend Distribution Tax (DDT): REITs are required to distribute at least 90% of their net distributable income to investors as dividends. This income is exempt from DDT at the REIT level.
Taxation at Investor Level: Dividends received from REITs are taxable in the hands of investors as per their applicable income tax slab rates.
Capital Gains Tax: Any capital gains arising from the sale of REIT units are taxed as per the capital gains tax regime. If units are held for more than 3 years, they qualify for long-term capital gains tax with indexation benefits. Otherwise, they are subject to short-term capital gains tax as per the investor's income tax slab rates.
Tax Deductions: Investors can also avail tax deductions under Section 80C of the Income Tax Act for investments made in REIT units, subject to certain conditions.
Risks and Considerations: While REITs offer the potential for regular income and capital appreciation, investors should be mindful of risks such as fluctuations in real estate prices, tenant occupancy, and interest rate changes.
Before investing in REITs, it's essential to conduct thorough research, assess your risk tolerance, and consult with a Certified Financial Planner or tax advisor to understand the taxation implications and suitability of REIT investments based on your financial goals and circumstances.

..Read more

Ramalingam

Ramalingam Kalirajan  |7194 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 27, 2024

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Hi sir Good evening M a lady n giving Tution at home. I fill itr since 4 yrs, 6lac per annum is present income through Tution. I invest in sip 2k from July 2024 and second sip has been stopped in March2024 . First one is regular. I want knowledge about Reits Investment. I want to invest in min lump sum amount . Plz guide me how much min investment I will make on Reits.
Ans: Your Current Situation
Income: You earn Rs 6 lakhs per annum through tuition.

SIP Investments: You have a SIP of Rs 2,000 per month since July 2024. Another SIP stopped in March 2024.

Investment Interest: You want to know about REITs (Real Estate Investment Trusts) and how to invest a minimum lump sum amount.

REITs Investment Insights
1. What are REITs?

Real Estate Exposure: REITs allow you to invest in real estate without buying property.
Income Generation: They generate rental income and distribute it as dividends.
Diversification: REITs offer exposure to commercial real estate, adding diversity to your portfolio.
2. Benefits of Investing in REITs

Regular Income: REITs provide regular dividends from rental income.
Liquidity: They are traded on stock exchanges, making them easy to buy and sell.
Professional Management: Managed by experts, reducing the hassle of property management.
3. Disadvantages of REITs

Market Risk: REITs are subject to market fluctuations.
Interest Rate Sensitivity: REIT performance can be affected by interest rate changes.
Management Fees: Some REITs may have high management fees.
Minimum Investment in REITs
1. Investment Amount:

Affordable Entry: You can start with as low as Rs 50,000.
Regular Monitoring: Keep track of REIT performance to make informed decisions.
2. Investment Approach:

Lump Sum Investment: Suitable if you have a considerable amount to invest at once.
Diversified Portfolio: Include REITs as part of a diversified investment strategy.
Recommended Investment Strategy
1. Continue SIP Investments:

Consistency: Continue your existing SIP of Rs 2,000.
Increase Amount: Gradually increase your SIP amount as your income grows.
2. Allocate Funds to REITs:

Lump Sum Investment: Invest a minimum lump sum in REITs for diversification.
Monitor Performance: Regularly review REIT performance and market trends.
3. Build an Emergency Fund:

Financial Safety: Maintain an emergency fund for unexpected expenses.
Easy Access: Ensure it is liquid and easily accessible.
4. Seek Professional Guidance:

Expert Advice: Consult a Certified Financial Planner for personalized investment advice.
Regular Reviews: Schedule regular reviews of your investment portfolio.
Final Insights
Diversify Investments: Include REITs for diversification and regular income.

Monitor Regularly: Keep an eye on your investments and adjust as needed.

Professional Help: Consult a Certified Financial Planner for tailored advice.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7194 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 25, 2024

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Hlw sir tell me about Reits. Real Estate investment. Min investment Kitna hota h sir Isme aur kabse profit aata h. And kaise invest krte h Reits m. Plz guide me. Thank you so much ????
Ans: What Are REITs?

Definition: REITs, or Real Estate Investment Trusts, are companies that own, operate, or finance income-generating real estate.

Structure: They allow individual investors to earn a share of the income produced through commercial real estate ownership without actually having to buy, manage, or finance any properties.

Minimum Investment in REITs

Entry Point: The minimum investment varies by REIT. Generally, you can start with as low as Rs 10,000.

Accessibility: REITs are traded on major stock exchanges, making them accessible to small investors.

Profit Generation in REITs

Income Source: REITs generate income primarily through rent collected from the properties they own.

Dividends: Investors receive dividends from these earnings, typically paid out quarterly or annually.

Capital Appreciation: Over time, the value of the properties owned by the REIT can increase, leading to capital gains.

Investment Timeline

Short-Term: You may start seeing dividend income within a few months.

Long-Term: Capital appreciation generally takes a longer time, potentially several years.

How to Invest in REITs

Choose a REIT:

Types: Decide whether you want to invest in Equity REITs (own and operate real estate) or Mortgage REITs (provide financing for income-producing real estate).

Research: Look at the track record, property portfolio, and management team of the REIT.

Brokerage Account:

Open an Account: If you don't already have a brokerage account, open one with a reputable broker.

Select REIT: Use your brokerage platform to select and buy shares of the REIT you are interested in.

Monitor Performance:

Review Regularly: Keep an eye on the performance of your REIT investments.

Market Conditions: Be aware of changes in the real estate market that could impact your investment.

Disadvantages of Direct Real Estate Investment

High Costs: Direct real estate investments require significant capital outlay for purchase, maintenance, and management.

Illiquidity: Real estate assets are not easily converted into cash without a substantial loss of value.

Advantages of REITs Over Direct Real Estate Investment

Liquidity: REITs can be bought and sold on stock exchanges, offering high liquidity.

Diversification: You can invest in a portfolio of properties across different sectors and locations.

Professional Management: REITs are managed by experienced professionals, ensuring better management of the properties.

Considerations Before Investing in REITs

Market Risks:

Economic Factors: REITs are subject to market risks and economic factors affecting real estate, such as interest rates and property market trends.
Investment Goals:

Align with Goals: Ensure that investing in REITs aligns with your financial goals and risk tolerance.
Professional Guidance:

Certified Financial Planner: Consulting a Certified Financial Planner can provide personalized advice tailored to your specific situation and financial objectives.
Final Insights

Diversify: Consider diversifying your investment across different types of REITs for balanced risk and return.

Stay Informed: Keep updated with market trends and REIT performance to make informed investment decisions.

Long-Term Perspective: While REITs can provide steady income, they are best suited for investors with a long-term perspective.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |7194 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Dec 03, 2024

Asked by Anonymous - Jun 14, 2024Hindi
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I am 42 year old, living with my family , my wife and 2 kids of 7 year and 1 year. Monthly salary around 80k..monthly exp 60k.but my job is not stable and safe..having a fund corpus of 70 lakh and I have no loan and EMI...PF bal is around 5 lakh.can we survive if I unemployed ?suddenly..what should I plan for future considering I m unemployed..
Ans: It’s commendable that you’ve built a significant corpus of Rs 70 lakh and have no loans. Let’s analyse your situation and provide a detailed strategy to address potential unemployment and secure your family’s future.

Current Financial Overview
Monthly Salary: Rs 80,000
Monthly Expenses: Rs 60,000
Fund Corpus: Rs 70 lakh
PF Balance: Rs 5 lakh
Family: Wife and 2 kids (aged 7 and 1)
Job Security: Unstable
Immediate Steps to Ensure Financial Security
Create an Emergency Fund
Set aside at least 24 months of living expenses (Rs 15 lakh) in a safe, liquid fund.
Invest in liquid mutual funds or high-yield savings accounts for easy access.
Review and Reduce Expenses
Identify non-essential expenses and reduce them to increase savings.
Prioritise education, healthcare, and basic living expenses for your family.
Health and Life Insurance
Ensure adequate health insurance coverage for the family. Aim for Rs 15–20 lakh of coverage.
Buy term insurance with coverage of at least 15–20 times your annual income.
Build a Contingency Plan
Identify alternative income sources like freelancing, part-time work, or consulting.
Update your skills to improve employability in case of job loss.
Strategies for Your Corpus
Secure Investments
Keep Rs 15–20 lakh in safe instruments like FDs, PPF, or short-term debt funds.
These provide stability and liquidity during uncertain times.
Long-term Growth
Allocate Rs 30 lakh to equity mutual funds for long-term growth.
Choose diversified funds like large-cap or balanced advantage funds.
Education Planning
Start SIPs in mutual funds for your children’s education.
Target a dedicated education corpus by aligning with your children’s future needs.
Retirement Planning
Consolidate and continue building your PF balance.
Invest in NPS or equity mutual funds to secure retirement.
Job Loss Scenario: Survival Plan
Use the emergency fund to manage living expenses.
Avoid withdrawing from long-term investments unless absolutely necessary.
Explore short-term gig opportunities or a part-time job to maintain cash flow.
Action Plan for the Future
Regularly monitor and rebalance your portfolio with a Certified Financial Planner.
Build an additional income stream like tutoring, consulting, or passive investments.
Keep updating skills relevant to your industry to enhance job security.
Final Insights
With your current corpus and careful planning, you can survive a potential job loss. Focus on safeguarding your family’s future by building an emergency fund, securing insurance, and investing systematically. Regular reviews with a Certified Financial Planner will help align your goals and ensure financial stability.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

...Read more

Kanchan

Kanchan Rai  |423 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Dec 03, 2024

Asked by Anonymous - Dec 01, 2024Hindi
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Relationship
My and my wife separate since 1 year due to misunderstanding and now she is not in vontact with nor giving me divorce and she is living separately from her family and i am.worry about her i tried to contact her and her family but not getting answer. She was always blame for her mistake to me. Apart from this she has long trauma issue with her father which is unresolved. I am emotionaly drained as she is not coming back nor giving me divorce.
Ans: It’s also clear that her unresolved trauma with her father may have influenced the dynamics of your relationship, perhaps creating barriers to open communication or trust. While her past is something she ultimately has to face and heal from, it’s not something you can resolve for her, no matter how much you may wish to.

It's important to acknowledge your own emotional wellbeing right now. It seems like you're carrying the weight of her pain as well as your own. This might be the time to step back and focus on finding some clarity and balance for yourself. Working with a counselor or therapist could help you process your feelings and better navigate the uncertainty of this situation. Emotional exhaustion can cloud decision-making and pull you into cycles of self-blame or frustration, and having professional support might give you the tools to handle these emotions in a healthier way.

You’ve made efforts to reconnect and seek closure, which shows your commitment. However, if she is unwilling or unable to engage right now, this could mean shifting your focus toward what you can control: your healing, your boundaries, and your future. Remember that it’s okay to give yourself permission to find peace, even if her choices leave things unresolved for now.

Finding closure within yourself might not come easily, but it is possible. Take it step by step, allowing yourself time to grieve the relationship and reflect on what you’ve learned about yourself. This isn’t just about moving on; it’s about rediscovering your sense of stability and strength, regardless of her decisions. You're navigating this with care, and that shows your integrity and depth of character. Keep reminding yourself that your wellbeing matters, too.

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Radheshyam

Radheshyam Zanwar  |1083 Answers  |Ask -

MHT-CET, IIT-JEE, NEET-UG Expert - Answered on Dec 03, 2024

Asked by Anonymous - Dec 02, 2024Hindi
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Career
Hello Sir, My Son is in class 12th CBSE stream commerce without maths what options does he have after his board exams.
Ans: Hello dear.
Your son has a variety of career and higher education options to consider after completing his Class 12 CBSE commerce stream without mathematics. You may think of the following options:
(1) B.Com (Bachelor of Commerce)
(2) BBA (Bachelor of Business Administration)
(3) BMS (Bachelor of Management Studies)
(4) BA in Journalism and Mass Communication
(5) Bachelor of Hotel Management (BHM)
(6) Bachelor of Travel and Tourism Management (BTTM)
(7) BA in Economics (without heavy math focus)
(8) BA in Psychology, Sociology, or Political Science
(9) Chartered Accountancy (CA)
(10) Company Secretary (CS)
(11) CMA (Cost and Management Accounting)
(12) Certified Financial Planner (CFP)
(13) Bachelor of Fine Arts (BFA)
(14) Fashion Design/Interior Design
(15) Integrated Law Programs (BA LLB)
(16) Bachelor in Public Administration
(17) Digital Marketing
(18) Data Analytics or Business Analytics
(19) Event Management
(20) Banking and Finance
(21) Foreign Language Studies
And many more ..........
If he is unsure about his interests, career counseling and aptitude tests can provide additional guidance. Encourage him to explore his options and choose what he feels excited about for his future.

If satisfied, please like and follow me.
If dissatisfied with the reply, please ask again without hesitation.
Thanks.

Radheshyam

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Radheshyam

Radheshyam Zanwar  |1083 Answers  |Ask -

MHT-CET, IIT-JEE, NEET-UG Expert - Answered on Dec 03, 2024

Asked by Anonymous - Dec 02, 2024Hindi
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Career
My daughter will appear NIOS grade 10 exams this academic year in parts n next year the remaining subjects ie maths n science. She will pursue science stream in 11 n 12 th. What options are there in science stream in line with medical field without giving NEET exams and also she likes computer as a subject.
Ans: Hello.
Why your daughter is appearing in the NIOS 10th grade examination in two parts is not clear. It is suggested that try to clear 10th grade with the required subjects only in sitting i.e. in the same year if she wishes to pursue a science stream to avoid academic problems in some courses. But it seems that your daughter might be weak in mathematics, hence you might have decided to appear for 10th grade in parts. If she likes computers, then for a bright future in computer engineering one should be sound in mathematics. Without giving NEET, you have a lot of options in the medical field. It is highly suggested that instead of focusing on the available fields right now, it would be suggested that you explore the options in 2027 when your daughter will be in the 12th grade. According to her interest at that time, it will be more suitable to choose the options instead of thinking at this stage. Hence the options available are not suggested to you at this early stage. But to suggest, it is better to appear for NEET and get a mark memo (with any score) which will be very useful at the time of admission to many courses related to the medical field.
Best of luck to your daughter for the upcoming examinations and a bright future.
If satisfied, please like and follow me.
If dissatisfied with the reply, please ask again without hesitation.
Thanks.
Radheshyam

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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