Why Should You Invest in Real Estate?

21 Nov 2022

A better investment can be life-changing. It has the implicit promise of changing not only your life but also the lives of those you touch. Past days when people relied on a single source of income and traditional savings to become financially independent.

Nowadays, investment can include a variety of assets, such as stocks, mutual funds, gold, crypto, and much more. Real estate continues to occupy the big shares of the total assets of a typical Indian. According to a survey, 77% of the total assets of a typical Indian household are in real estate.

Real estate company in Navi Mumbai demands are always high, that is the great investment option in India. Purchase a new home is always a dream come true for Indian families. While fulfilling this dream gives you emotional satisfaction, it also promises financial growth, as real estate investment in India has a good ROI.

Here are some reasons Why You Should Invest in Real Estate?

Appreciation of Value

Real estate costs always increase the value of properties. With a good investment, one can turn an enormous profit. Rents is also to increase with time, leading to higher cash flow. It is clear that the longer you hold onto your real estate, the more money you will make. The housing market always recovers from bubbles and crises that cause home appreciation to slip. Even in the most uncertain times, prices always return to normal, and appreciation is back on track. In other modes of investment, like the stock market, the risk of loss is omnipresent, but real estate offers increased control over one’s investment. Property, being a fixed asset, can be leveraged to capitalise on numerous revenue streams while enjoying capital appreciation.

Cash Flow

Cash flow is the net income from a real estate investment after mortgage payments and operating expenses are covered. Real estate has a considerable ability to generate cash flow. A steady monthly rental income is an excellent incentive for passive income and offers long-term financial security to the investor. In many cases, cash flow only strengthens over time as you pay down your mortgage and build up your equity. A good real estate investment generally provides you with 6% or greater cash flow.

Tax Benefits

Tax deductions on real estate can balance income and reduce overall taxes. There is no self-employment tax on rental income. At the same time, the government offers tax breaks for property depreciation, insurance, maintenance and repair expenses, legal fees, and even interest paid on a mortgage. Real estate investors get lower tax rates for their long-term investments. Reasonable costs of owning, operating, and managing property is easily deductible.

Leverage

A very significant benefit of real estate investment is the ability to use leverage by investing just a small portion of one’s own money and borrowing the rest of the money to buy a property. If you come up with a down payment from your savings and acquire a housing loan to cover the rest of the cost of the property, you can invest in prime real estate for as little as 15 % of the total purchase price. This means only a tiny fraction of your own money is invested in the property, but you still get to be the owner's profit. It also ensures that you do not invest your entire life's earnings in real estate and save some for the possibility of emergencies.

Tangible Asset

Property is a tangible asset, that can be leveraged to capitalise on numerous revenue streams while enjoying capital appreciation. The high balance asset value ensures constant security as there will always be value in real estate, unlike other investments such as stocks, which have a low or no tangible value.

Real estate is easy to purchase, convenient to finance, gives tax advantages, improves your lifestyle, and is devoid of any impossible financial barriers. Hence, real estate today remains one of the most advantageous investment options.