Real Estate – Best Investment Class
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24 October 2018 - 14:00, by , in Current News, No comments

Real estate is a thriving market. Everyone in today’s day invests in real estate to grow their profits and diversify their portfolios. Real estate investments are considered safer as compared to other investment assets, therefore, make for a great investment opportunity. The downside, however, is that these investments are more expensive as compared to other investments. The following reasons make real estate investments favourable despite their expensive nature.

Tax Benefits: Realty investments provide an opportunity for significant tax deductions. Finance minister, Arun Jaitley increased the tax deduction limit from INR 24000 to INR 60000 per annum on housing rent further fortifying the benefit of tax deductions on investment properties. He also announced an additional tax relief of INR 50000 per annum on a loan of INR 35 lakhs for the first time home buyers provided the cost of the house does not exceed INR 50 lakhs.

Capital Appreciation: Long-term investments in real estate ensure appreciation in the asset value. When a real estate asset is purchased after thorough due diligence and detailed research for a considerable amount of time, the asset is bound to increase in price and value. Factors like planned developments of highways and metros, sales pattern of similar events, the rate of appreciation for each property type and at different stages, the pricing practices of the developer, the future social infrastructure help in the next price estimation.

Shield for Inflation: As an economy grows, the real estate is the first to get affected by it positively. These investments are the best way to combat inflation because as inflation rises, real estate increases in value along the currency value. The limited availability and growing population also ensure that real estate prices will always see an upward trend.

Additional Income Stream: Investing in a residential or commercial real estate asset can generate an additional income stream for the investor. These properties can be rented out or leased out and earn a monthly revenue for the owner. Additional income is always welcome by any individual. Renting as a business venture is considered extremely profitable and is usually safer and hassle-free as compared to other business classes.

Legacy for Future Generations: As already discussed, real estate as an asset class usually exhibits an upward trend. This primarily means that property would only get more expensive for the coming generations. Having built real estate assets would ensure the kin benefits from appreciating properties. Property is an asset that remains in the family permanently unless sold and would be a legacy for the future generations.

Safe Investment: Real estate investments are considered safer as compared to other investment classes. There is seldom a case where the price of a property goes down. Adding real estate assets to the portfolio diversifies the risk. In addition, these assets also create an income stream for the investor in the form of rentals. The owner does not have to worry like in the case of stocks crashing or business incurring losses because of complete ownership of property. However, it is important to do a proper research in terms of track record of developer, land title, quality of construction and future social developments in the pipeline.

Owner’s Pride: Real estate assets belong to the owner entirely. Owning a real estate asset gives a sense of security unlike other assets like stocks and bonds. These assets require a considerable investment and being able to buy properties inculcates a sense of pride. Being able to build something for the future generation is a significant achievement.

 

See Also: Managing Multiple Investment Properties

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