A plethora of investment options are available to people looking for places to invest their savings. One such option is Real Estate Investing.
No wonder 30 years ago, investment in a property was never a requirement but a luxury medium to boast social status. But now, things have changed. Today it’s not just essential to put cash in the real estate industry, but a tried and tested way to constantly increase your investment.
Why should you invest in real estate?
Real estate is generally regarded as an excellent choice for investment. It can not produce a permanent passive income but also be a good investment in long run. Over the time if it’s value rises one can use it to start building wealth as part of general approach.
However, you must ensure, that you are prepared for real estate investment. Firstly, you need to put in a considerable amount of cash in order to start investing in real estate. Purchasing an apartment, a home, or a piece of land can be expensive. Not to forget, if for a moment you are between tenants, then you’re liable for the continuing maintenance costs, and the prospective revenue gaps.
Here’s what you need to understand before investing in real estate:
Safest Investment Choice
Home is indeed the safest investment choice.’ There is no safer location than home’ Reason is that it has related returns and risk. Stocks and equities could yield better over a period of time, but they often pose risks. Even in one week, share and equity prices vary enormously, but housing stays stable and therefore secure for a long period of time.
Loans are Cheaper
Loan offered for housing in India is cheapest as compared to other resources. A home loan is accessible at 9.25-11%, while car loan is accessible at 14%, and private loans are offered at an average rate of 15%. This leads to comparatively cheaper home loans.
It is a Controlled Asset
If you invest in shares and stocks, you may need to employ a broker, but investment in real estate is simple and easy. Property portals are a stop point for searching for alternatives and locality research, getting responses to all property-related queries an investor tends to have. Even if you buy through a broker, it’s a one-time payment, with share brokers charging commission on an annual basis.
Keeps you financially disciplined
In fact, real estate maintains a financially disciplined investor. You are encouraged to arrange the funds in due time by a due date for EMI payment as late payment could include a large penalty. In addition, you must also take account of tax and rental revenue variables, taking account of the holding expenses. This all helps you to be more conscious and urges you to have sound financial skill.
It keeps on growing
Real estate asset never ceases to grow. Once you purchase it, the yields and returns tend to boost as per location. The investment cost continues to grow even if you put it in lease. If you want to construct your pension nest, you have the edge to win, because you can use rental revenue until the age of 58 and sell it for lump sum to purchase other property or assets.
Benefit from other investment
Prices for properties rises whenever there is a growth or upgradation in infrastructure, like hospitals, schools, shopping centers and company hubs. Improved job opportunities can increase the demand for housing in neighboring regions. When you invest in a suburb, improved accessibility can increase the value of the estate along with the demand for housing.
Real estate can be passed on to next generation
Real estate is one of the resources that you can give your children and future generations. Whenever you think of long-term investment, it’s not always your life. You can pass this on to your kids, and property will continue to develop over the long run if well positioned.
You are entitled to a tax rebate if you own a property. Up to Rs 1,50,000 in a financial years can be deducted from taxable income as a home loan payment. However, if the acquisition or construction of a property is completed within three years of the end of the year in which a loan is taken, an enhanced deduction up to Rs 2 lakh annually may be made from the self-employed property.
Time would alter, but real estate investment would only boost its advantages. It’s not only the safest haven, it’s an asset that is tangible and more realistic. The’ look and feel’ is reassuring and has a much more significance than any share or inventory.