Metal oxides have always been at the focus of research in material science for several applications. Hematite or α-Fe2O3 is one of the most abundant, stable, and relatively non-toxic oxides and has been explored for catalysis, sensing, magnetic properties, and many industrial applications. The optical bandgap of ~ 2.1 eV makes it a suitable material for solar energy absorption and hence has been extensively used in photocatalysis. However poor carrier lifetime and short hole diffusion length remain drawbacks in achieving higher efficiency. In this work, vertically aligned nanostructures have been fabricated using simple chemical techniques to achieve directional charge transport and a higher specific surface area. The photoelectrochemical behavior of these structures has been investigated in detail. Further, the Fe2O3 nanorods are coated with an ultrathin and conformal Al2O3 layer using atomic layer deposition (ALD) to achieve enhanced photocurrent density and gas sensing characteristics. Finally, multiferroic perovskite BiFeO3 nanorods are prepared by deposition and diffusion of Bi on the surface of FeOOH nanorods. The magnetic and ferroelectric characterizations confirm the multiferroic nature of the nanorods. The photoelectrochemical and gas sensing studies show the potential of these nanorods in photocatalysis and sensing applications.