Rich and wealthy invest in real estate directly. They own multiple residential or commercial properties. Steady and decent capital appreciation of their real estate property is common.
But the part which makes property investment so dear is its capability of generating stable short term income. The short term income is generated in form of “monthly rents“.
The rate at which the rental income grows, generally beats inflation in long term. This is specially true for Metro, Tier1, and Tier 2 Cities. As the monthly yield of property grows, this also pushes the overall property price up.
Real estate investment generates assured returns. The returns are in form of Rent and capital appreciation.
The rental yield (fixed income) grows with time. Generally this growth keeps pace with the inflation. Capital appreciation will happen due to demand growth. India being a growing and young population, demand for property keeps rising.
This dual effect (of assured rent and value growth) makes the real estate sector generate unparalleled returns, unlike any other asset.
Property investment is one of the best Inflation hedge. This is the reason why big investors has special liking for it.