For those who can afford it, the real estate sector offers many benefits, from rental income and long-term value appreciation to shelter and financial security. However, the huge capital requirement for entry into the market proves a major barrier for small investors. Thankfully, the sector is evolving, and to overcome this problem, companies are launching new investment products, such as real estate investment trusts (REITs), to encourage more people to participate in this space. People who are unsure about the sector can consult experts before investing.

Professionals can help them decide since they may not be fully sure of their varied risk profiles and requirements. Tax benefits, returns, capital requirements, etc., can also be their key consideration areas.

Also Read: How To Optimise And Reallocate Retirement Savings For Best Results

Should Seniors Invest in Real Estate?

Real estate offers advantages and disadvantages, depending on the property, product and investment purpose. Viineet Chellani, founder & CEO of Asset Deals, a real estate firm, explains that real estate investments can provide two benefits. “For seniors, their money gets invested in a place whose value increases day by day in the future. Second, they even get an opportunity to create a source of income for themselves. The latter is specifically beneficial for elderly people who retire from private jobs, which provides little or no scope for pension,” says Chellani.

It also helps diversify the investment portfolio while people continue enjoying monthly income via rentals, tax benefits, value appreciation, and capital gains during sales. Real estate investments can offer stable rental income for retirement because as the housing demand grows yearly, so will the rental income, providing seniors with the cash flow they need for their daily expenses and a safety valve against inflation.

What Investment Options Does Real Estate Offers?

According to Chellani, “Some people buy properties for rental income. However, investing in REITs has also become a vogue.” He recommends that people also consider leasing properties to commercial entities and buying real estate mutual funds and shares.

However, Chellani cautions that both real estate and stock market investments are subject to market risks. Hence, investors should evaluate all the pros and cons, such as liquidity risk, long-term profitability, and value appreciation, before investing.

Income from Real Estate Investments

Chellani adds: “There have been numerous cases where investments in the real estate industry have fetched systematic monthly incomes to the investors, thus guaranteeing them a stable source of income to bank on. As already said, these monthly incomes are generated through investing in REITs from apartment rentals and investing in different crowd-sourced systems that harness regular payments to the investors.”

Also Read: LIC May Enter Into Health Insurance; Can Explore Inorganic Options, Says Chairman

Conclusion 

All investment instruments in the market come with risks and benefits. So, select the options wisely based on your risk appetite and requirements. For seniors, real estate could be an option to reinvest a portion of their corpus. However, they must consult a certified investment advisor.