Nonresident Indians or NRIs are looking more and more towards their home country to invest their money. After the reforms of 1990 with the commencement of liberalization, India has become one of the best investment for NRIs.
There are several stories of flats/plots from the ’50s which were bought for a few thousand rupees being sold for a few crores today. That is the kind of stuff that keeps the legend of real estate investment alive and kicking.
Real estate is the best asset class to invest in. If you want to invest money, real estate is a great option. In the end, real estate investment means different things for different investors and has significant advantages and disadvantages at the same time.
Investors can make money via appreciation when they sell, but most returns are generated through rents collected from tenants. Real estate investing occurs when the investor, also known as the landlord, acquires a piece of tangible property, whether that’s raw farmland, land with a house on it, or an office building on it, industrial warehouse on it, or an apartment. He or she then find someone who wants to use this property, known as a tenant, and they enter into an agreement.
The tenant is granted access to the real estate, to use it under certain terms, for a specific length of time, and with certain restrictions – some of which are laid out in Federal, state, and local law, and others of which agreed upon in the lease contract or rental agreement. In exchange, the tenant pays rent.
Real estate is also an extremely tax-efficient investment. Depreciation of your assets can cancel out some or all of your profits, allowing you collect rental income at a favourable tax rate. An investor or a buyer has much higher control over the performance of a real estate investment than other types of investments.
A property purchased now will appreciate in its value over the years to come. With this, the Compound Annual Growth Rate (CAGR) also increases. As part owners of property in these upcoming areas, any upgrade in the locality will only impart a positive influence on its future growth.
Investing in commercial real estate is lucrative and serve as a good hedge against the volatility of the stock market. One of the biggest advantages of commercial real estate is the attractive leasing rates. In areas where the amount of new construction is either limited by land or law, commercial real estate can have impressive returns and considerable monthly cash flow. Commercial real estate also benefits from comparably longer lease contracts with tenants than residential real estate. This gives the commercial real estate holder a considerable amount of cash flow stability, as long as the building is occupied by long-term tenants.
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