The Indian real estate market is booming, and by 2047, it is expected to reach a staggering value of USD 5-7 trillion, potentially crossing USD 10 trillion. This growth makes real estate a compelling option for investors looking for low-risk opportunities.
But exactly how real estate make money?
The answer lies in understanding the diverse investment avenues available across different tax brackets and knowing the risks and hidden costs that could affect returns.
In this blog, we will explore the skills you need as a beginner investor, break down how real estate make money in practical ways, highlight potential risks, and share insights on trustworthy builders offering high-ROI projects.
From first-time investor to someone looking to expand your portfolio, this guide will help you navigate the opportunities effectively.
Skills You Need As A Beginner Investor in 2025
Learn The Terminology
It’s essential to be familiar with the terminology used by agents and other professionals. This will help you understand the deals better, avoid confusion, and be aware of potential scams. Here are some key terms every beginner real estate investor should know:
- Cash Flow: The amount of money generated by a property after deducting the operating costs and expenses is the cash flow.
- Due Diligence: Researching a property before investing is called due diligence. This includes reviewing documents, operating expenses, and considering risks.
- HOA (Homeowners Association): In India, this is equivalent to a Resident Welfare Association (RWA) or Owners Association (OA), managing common areas, enforcing community rules, and maintaining the neighborhood’s appearance.
- Turnkey Property: A property ready for immediate move-in, requiring no additional work.
- Inspection Contingency: A contract clause allowing buyers to inspect the property before closing, with the option to renegotiate the price based on the findings of the inspection.
Build a Social Media Presence
Real estate is a highly sought-after investment opportunity, so you must be proactive. Building and maintaining a strong social media presence can help you increase your reach and showcase credibility. Further, it helps you find profitable investment opportunities, rent properties, and sell them efficiently.
Develop Soft Skills
Effective verbal and written communication, active listening, and tactfulness are all critical to succeeding in the real estate industry. Additionally, having strong negotiation skills goes a long way in closing profitable deals.
Know the Market
You can find profitable real estate opportunities in any demographic of your choice, but understanding local trends is key. For instance, in a developing tier-2 city like Jaipur, low-rise, plotted living, and gated communities are in high demand. So, invest in what works for the market with builders that are trusted by residents and have clear RERA records, such as Trimurty Builders and Developers, etc.
Take Proactive Steps: Make Offers and Close Deals
Confidence and taking proactive action are essential in real estate. When you identify the right opportunity, make an offer and close the deal promptly. Real estate is highly competitive, and you need to close deals as efficiently as your competitors.
How Real Estate Make Money: Opportunities for Investors
Real estate remains one of the most reliable and profitable investment avenues today. From a beginner to an experienced investor, understanding how real estate make money is essential to making informed decisions and maximizing returns. Here, we break down five proven methods for investors to grow wealth through real estate.
- Rental Income
Rental income is the most common and stable method of generating returns from real estate. Once you invest in a property at a favourable market price, renting it out can create a steady stream of passive income. Even if the market fluctuates, rental income tends to remain consistent.
Renting smaller units: This refers to dividing a property into smaller units and renting them to multiple tenants. You can list the property on platforms like Airbnb or create shared accommodations, which can significantly increase rental yields.
Renting to businesses: This would be your way into commercial real estate. Commercial leases often command premium rents due to strategic location, branding opportunities, and high demand, generating strong cash flow and profitability.
- Share or Group Investments
Such types of investments offer investment opportunities to everyone, regardless of their capital size. They allow you to invest in fractions instead of a whole property. Here are some of the methods by how real estate make money through share or group investments:
Real Estate Investment Groups (REIGs): Real estate investment groups, or REIGs, are businesses that focus on capital in real estate. These do not elect or qualify as a REIT. They may choose to buy, renovate, sell, or finance properties to generate profits. REIGs commonly buy, manage, & sell multiunit properties, while offering investors a share of the profits. Moreover, they take over the administration, maintenance, & tenant management.
Real Estate Investment Trusts (REITs): In India, investing in real estate investment trusts (REITs) has become increasingly popular due to the accessibility and convenience they offer. Multiple investors on a large scale pool funds to buy a rental property, and in return, receive a percentage of the rental income the property generates. Remember, REITs are subject to market risks and depend on the performance of your property and management decisions.
Mortagaging: You earn equity with every mortgage payment you make, which is the portion of the property’s value that you own outright, excluding any outstanding mortgage debt. Additionally, mortgage interest rates are usually lower than the rate of property appreciation over time. Therefore, it means that while your property’s value is likely to increase at a higher rate, you’re paying a relatively lower interest rate on your mortgage loan.
- Low-Cost Purchase
If you have a good understanding of the market, a low-cost purchase is a smart investment opportunity. The idea is that you buy a property at a lower price with the intent of selling or renting it at a higher rate. However, it can get challenging to find a low-cost property in India that does not compromise on its integrity. You need good market knowledge, patience, and strong connections, but the payoff can be significant.
- Increasing Property Value
The real estate market is a market that appreciates over time. Although this is not always true, it’s more likely not to depreciate. Depending on the location and surrounding developments, a property’s value is likely to increase. Once you buy a property, you can hold it until market conditions are favorable and sell it at a higher value to create substantial capital gains.
- Tax Benefits
The Indian government offers multiple tax incentives to encourage people to invest in real estate. Here are two major benefit categories for investors.
On Improvements: Any improvements made to a property are subject to taxes. However, these taxes can be offset by the rental income you generate from your property. When you invest in property renovations and upkeep, you increase the property’s value, which in turn allows you to charge higher rents. The additional rental income can then be used to cover the taxes incurred on the improvements.
On Interest: There is a deduction of mortgage interest from the rental income. Investors can effectively reduce their taxable rental income, resulting in lower tax liability and potentially higher total rental profits. This tax-saving strategy increases the overall profitability and improves cash flow for property owners and investors.
Cash Flow Vs Appreciation: What Will Work for You
When it comes to real estate, there are two categories defining how real estate make money: cash flow and appreciation. Choosing the right approach depends on your financial goals, risk tolerance, and investment horizon. Also, consider the benefits and drawbacks of each mentioned below:
Cash Flow
Cash flow refers to the stream of income generated from a revenue-generating asset. In real estate, rental properties are cash-flow investments. As your tenants pay rent, you receive regular and stable passive income.
Benefits:
- Provides consistent passive income
- Offers financial predictability
- Lower investment risk
- Acts as a hedge against inflation
- Renters help build equity
Drawbacks:
- Lower potential for property value appreciation
- Requires active management
- Vulnerable to vacancy losses
- Unexpected maintenance or expenses
Appreciation
Appreciation means an increase in the value of property over time. Even if short-term market dips occur, real estate tends to appreciate in the long term due to the natural scarcity of land.
Benefits:
- Opportunities for cash-out refinancing with buy-and-hold investments
- Less active management for long-term holds
- Long-term wealth creation
- Tax benefits for buy-and-holds and fix-and-flips
- Faster profits for fix-and-flip projects
Drawbacks:
- Risk of depreciation for buy-and-hold properties
- Difficulty in timing the market
- A potentially longer investment horizon required
- Risk of overpaying
- May miss out on steady cash flow
Some Risks of Real Estate Investments
Investing in real estate can be highly rewarding, but it is not without risks. Understanding these risks is essential for making informed investment decisions.
Market Risk
Market risk is one of the most common challenges in real estate. There is always a possibility of a decline in property values or rental income due to an economic downturn, oversupply of properties, or a shift in market demographic trends. To mitigate this risk, investors should thoroughly research the market and track real estate value trends regularly. Also, stay informed about future developments, value progressions, and fluctuations.
Liquidity Risk
Liquidity risk refers to the difficulty of selling a property quickly at its market value. When investing, it is essential to consider how you will exit the investment. For instance, you can attract more buyers in a popular and sought-after location, regardless of market conditions. At the same time, a property located in a low-key region with a smaller market may limit your exit options.
This risk is particularly high in commercial real estate, with a longer holding period and less liquidity than residential properties. To manage liquidity risk, have a clear exit strategy from the outset, so you can sell or transfer the property when needed.
Physical Risk
Physical risk is the potential loss of property value due to damage or environmental hazards to a real estate property or project. This can include construction issues, poor maintenance, or accidents such as fire breakouts. To reduce physical risk, it is necessary to conduct a thorough physical inspection and appraisal before investing.
Also, regular maintenance and upgrades, adherence to building codes and standards, and maintaining insurance coverage for natural disasters or accidents are essential safeguards to protect your investment.
5 Hidden Costs That Can Diminish Your Profits
If you’re learning how real estate make money, it’s essential to be aware of hidden costs. These are expenses that aren’t immediately visible during the purchase process but can significantly impact your property’s profitability. Unexpected expenses from repairs, taxes, insurance, and legal fees can quickly reduce your returns. Here are 5 major hidden costs explained in detail:
Maintenance & Repairs
- Routine upkeep (Plumbing, HVAC servicing, landscaping, painting)
- Emergency repairs (Water damage, roof leaks, electrical issues)
- Long-term replacement costs (Appliances, flooring, foundation work, and other structural maintenance)
Vacancies & Turnover Costs
- Lost rental income (Units sitting empty reduce cash flow)
- Marketing expenses (Advertising vacancies, listing fees, and promotions)
- Tenant turnover costs (Cleaning, minor repairs, and repainting for new tenants
- Screening costs (Background checks, credit verification, and application processing)
Property Taxes & Insurance
- Property taxes can rise annually, affecting net profits
- Insurance premiums (Landlord insurance, liability coverage, and property protection)
HOA Fees & Special Assessments
- Monthly dues are regular homeowner association fees that may increase unexpectedly
- Special assessments are large one-time costs for major repairs such as roofing, elevators, or common area infrastructure
Legal & Compliance Costs
- Eviction and lease enforcement (Court fees, attorney charges, and related legal expenses)
- Regulatory compliance costs are associated with adhering to local property laws, rental regulations, and documentation.
Looking to Invest? Here’s Why Trimurty Builders and Developers Are a Good Choice
When learning how real estate make money, choosing the right developer to invest with can significantly impact your returns. Trimurty Builders and Developers is one of Jaipur’s leading developers, having delivered over 30 residential and commercial projects, known for their luxury designs and eco-conscious approach.
Here’s a look at some of their standout properties and why they are ideal for you to invest in:
- Trimurty Divinity (under construction), C-Scheme features Premium 3 and 4 BHK apartments at Jaipur’s prime location. This benchmark project offers a comfortable and luxurious lifestyle. The sustainability features and the thoughtful design promise a future-proof home with a high ROI potential.
- Trimurty Crimson (under construction), Bani Park offers 3 BHK smart residences that meet the standards & requirements of working professionals and small families. The prime location and modern amenities guarantee strong rental demand and steady cash flow.
- Trimurty Kachnar (proposed), C-Scheme offers 3 and 4 BHK homes that combine connectivity and green building standards. This is one of the strategic projects by Trimurty Group that promises excellent rental yields.
- Trimurty Arabella (ready to move), near Bani Park features 3 & 4 BHK luxury apartments, offering rental yields of 5–7%. These are perfect for investors looking for premium returns in Jaipur’s growing market.
- The Future City is a thoughtfully planned residential township that offers prime investment potential with high rental and resale yields due to its proximity to the SRJIA Industrial Area. The community is developed sustainably, featuring in-house farming, thriving biodiversity with over 50,000 trees & 100+ bird species, and more, creating a green and serene environment. With modern infrastructure, ample open spaces, and eco-friendly planning, The Future City promises a balanced lifestyle while providing long-term property value appreciation, making it an ideal choice for investors looking to maximize returns in Jaipur’s growing real estate market.
Investing in Trimurty projects allows you to maximize returns through rental income, appreciation, and a secure, eco-conscious property. Whether a first-time investor or someone looking to expand their portfolio, Trimurty’s thoughtfully designed projects make real estate a profitable and safe investment.
Conclusion
Real estate is a great investment option. If you are a beginner or a seasoned professional, it’s always great to keep researching and learning about real estate.
Here is a brief on 5 proven methods for investors on how real estate make money:
- Rental income
- Share or Group Investments
- Low-cost purchase
- Increasing Property Value
- Tax Benefits
At the same time, it’s important to stay mindful of the most common risks involved in real estate investments, such as market fluctuations, liquidity challenges, and physical property issues.
Before making your next investment, review this blog to fully understand how real estate makes money to help with any kind of confusion or uncertainty in your mind. For trustworthy opportunities with strong growth potential, consider premium projects by Trimurty Builders and Developers.