Every individual has specific needs and priorities. Your needs could vary but the ultimate aim of all is to attain financial stability over the long term. But how many of us are willing to take the risk? We always look for an investment option that gives a good profit with little or no risk involved. That’s where Real Estate investment comes to your rescue. Investing in Real estate is one of those investment options which is safe and also gives you great returns. Here are a few reasons why Real Investment is the best investment you could make in India:
When you buy a real estate property, you have something that you can physically see, touch and feel. Thus it makes you feel secure, making it the most comfortable and safest option for investment. It offers you an immediate personal satisfaction and also the potential for increased future consumption through price appreciation. This is less likely with any other form of investment you could make.
Will never depreciate in Value
The investment you make in your property is never lost as it never stops growing. Once you buy a property, the returns are always in the increasing end. Property is proven to be a stable investment. Since housing is a basic necessity, it will always be in demand. It will always have value because we simply can’t live without it, which gives property the advantage over other investment options with less risk and greater stability over time. If you look back over the past few decades, you would get an idea on how steadily property has increased in value over time.
Loans are cheapest
In India, loans offered for homes are cheaper when compared to other assets. On an average, home loan starts from 8.35 percent interest while personal loans start from for 10.99 percent interest. Especially, 2017 has witnessed a drastic reduction in the interest of home loans. After 6 long years, the interest rates on home loans have come down by more than 1.5%. You may think that this decrease may be offset by the increased rate of 18% GST in place of the 15% Service tax. But this is not the case since GST/ Service tax is levied only on a very small amount in case of loans. This makes real estate the most profitable investment.
Increase your returns through leveraging
Leverage is the investment strategy of using borrowed money. Real estate investing gets potentially more rewarding when you make use of a bank loan or home financing options. Leveraged real estate investing works best when you rent out the property. The value of the real estate and the rents keep increasing, but their monthly mortgage remains constant, thus creating larger profits. When you rent out the property, you would be able to pay your mortgage with the income you receive. So when you sell the property, you’ll be making 100% in profits.
Property owners can claim deduction of up to Rs.2 lakhs on their home loan interest if the owner or his family resides in the house property or when the house is vacant. If you have a rental property, then the entire amount you pay for the home loan is allowed as a deduction. Keep in mind to record all your expenses from the costs of maintenance, to utilities, rental repairs, and insurance on your rental property to help reduce the taxes.
Protection from Inflation
This is one of the top reasons why real estate is the best investment strategy. By investing in an asset that is expected to maintain or increase its value over a specified period of time, you would be able to protect your financial stability during inflation. That’s why real estate is considered a hedge against inflation. Property price tends to increase as a result of inflation. As the value of the property rises, you could increase the rental amount over time, to keep pace with the general rise in prices across the economy.
You Have More Control
When you invest in real estate, you become your own boss. You are the decision maker, whether it’s deciding on your tenants, how much to charge for rent, or when to buy and sell. This is also one of the reasons why real estate is a less risky investment. Even if you take help from a broker to buy or rent out the property, it is always a one-time deal. Of course, there are external factors that affect real estate, but at the end of the day, you become liable for the choices you make.
Serves as the best Retirement Plan
Whether you want to retire early or simply are looking for a retirement plan for the future, Real estate investment would definitely guarantee you a convenient retirement and a secured future. It will help you generate steady, regular and passive income for your golden years. If planned and executed successfully, a real estate investment plan can secure your entire retirement. Of course, you’ll need to be systematic and well knowledgeable in order to make the best investment.
Owning a property is not just an investment but is a matter of pride for most of us. Thus it’s important for you to realize that real estate investment is not a cake walk. You’ve to put in a lot of research, be knowledgeable in the real estate world and chart out a proper plan to yield the maximum profits. Be sure of one thing, real estate is definitely the best investment strategy!