The Real Estate market has always been dominant over others because of the tremendous returns it offers to its investors. Land is always considered as the major asset of the individual because the value only grows with time. There is a well-known phrase, “safe as a house” and it’s actually true. According to research by AMP, Indian property has increased in value at a rate comparable to that of the stock market since 1947 – an average of 11.4% per annum – in defiance of a succession of wars, disasters, recessions, and crises.
Real Estate saw a downfall last year due to the pandemic and builders have incurred huge losses on their projects as no one was investing in the property but still, the trust in the Real Estate market hasn’t shackled a bit, the reason being the capacity of this sector to create wonders for the people. In a recent survey by Housing.com, it was found that Apartments for sale in Gurgaon have reached record-breaking inquiries due to the recent initiatives by the government like Reduction in home loans interest rates, deduction in tax duties, and Reduction in repo rate.
The best thing about Real Estate is you don’t need specialist knowledge to start investing in property: in fact, many Indian property investors didn’t start off aspiring to make their fortune through the property. Instead, they just purchased a house to live in. It’s only after seeing the value of their home increase – and recognizing how much wealth you can generate – that many investors take the leap and start investing in the properties. Many of the property developers in Gurgaon were not having any background in this sector but because of the availability of land, they jumped into it and today making huge lumps of profit. Let’s focus our attention on the reasons that will show why investing in real estate is a good option for you.
Reasons to Invest in Real Estate Market
Appreciation
Real estate investors can generate wealth through rents, any gains created by property-aligned business activity, and appreciation. In Real estate, property values tend to increase over time, and with a good investment, you can generate a mammoth profit when it's time to sell. As time pass by even the rent increases (10 - 20%), which can lead to higher cash flow. The cash flow associated with real estate is easy to track and requires fewer efforts from the owner. In a city like Bangalore, appreciation of property value is on the higher side as the best builders in Bangalore have their townships in potential growth areas.
Ease of Financing
Ease in Financing may not feel like it when you’re applying for a mortgage, but lenders like property. Home loans are a crucial part of any bank’s business model, and people are more likely to lend on residential property than any other asset class – as witnessed by the fact that they will lend a higher proportion of the value like almost close to 100% and at lower interest rates than any other asset class. This motivates the investors to invest in properties rather than going for any other asset class.
#3. Real Estate is Improvable
To increase the worth of a property is in your hand, this cannot be possible in any other sector. If you renovate your flat or a house, your chances of getting good resale value will definitely increase. Since real estate is a substantial asset, any improvements you make to it will increase its value surely. Some things that bring the biggest return for your money are flooring, Doors, and Ceilings.
Real Estate Leverage
Real estate is the only sector that provides huge leverage to its investors. Leverage is defined as the process of using various financial instruments or borrowed capital like debt to uplift an investment's potential return. A 20% down payment on a mortgage will get you 100% of the house you want to buy, that's how leverage helps the investors. In NCR, many builders like MVN Infrastructure are offering a ready-to-move house in Faridabad which becomes a good opportunity with the advantage of leverage.
Portfolio Diversification
The investors always look for methods to lower down the risks in their investments, real estate gives them the opportunity by providing different platforms like commercial offices, Plots, Flats, and independent houses. It makes sure that if one area falls down a little another one is always there to balance it out.
Tax Deductions
Tax codes allow various deductions for the normal expenses aroused in owning real estate properties, such as apartment upkeep, maintenance, advancements, and also the interest paid on the mortgage. The deductions can build income and reduce your overall taxes. For first-time home buyers, tax deductions are more favorable. Most of the Builders and Developers in Bangalore are associated with RERA that improves their authenticity and also helps investors to get tax deductions easily.
Inflation Hedge
Inflation affects every investment and impacts the functioning of that sector but real estate is an investment that is almost always in demand, so it basically maintains its monetary power. Normal inflation often creates hurdles for companies to create products and services. They either have to increase their prices or accept lower profits. Real Estate does not get affected by such inflation and because of this prominent feature, it comes out as a natural Inflation hedge.
Conclusion
The investment in the real estate market is quite easy and understandable to the masses which motivates everybody to test their hands in this sector and make a fortune for themselves. Real Estate is back on track with the help of new norms by the government and it is the right time for you to dive into this ocean and generate enormous profit.