The property market is very stable as the prices of the property do not suddenly crash down. The prices of the property keep on rising gradually as and how time passes. In very rare cases there is a correction in prices that happens due to extreme slack demand or the recession in the economy. The property prices depend upon various factors like the demand for the property, ready reckoner rates of the property set by the government, construction cost material prices & depending upon the commercial and industrial development of that particular locality. Thus due to ever-increasing growth in the real estate markets real estate investment is considered as one of the safe investments compared to any other type of investment. The investor can expect returns as high as 2x to 3x returns over 5-10 years. Also, home loans can be availed at attractive interest rates for the purchase of the house. The loans can be availed at interest rates as low as 6.50% per annum. The borrower of the loan can also avail of tax benefits under income tax act 80C for the purchase of the house.
The government of India also encourages the people to invest in the property as the real estate sector creates large-scale employment for the white-collar as well as the blue-collar workforce. Also, the government receives huge amounts of taxes through registration, stamp duty & GST charges. Also due to the high costs involved in the purchase of the house, the investment provides a big boost to the economy. Also, the construction material is being heavily charged by the government. It is also recommended that the investor should preferably invest in the new construction property rather than the resale ones. As the age of the building goes on increasing and if the condition degrades then in that case the value of the property declines. Thus in the case of the new construction building, the condition of the building is good and thus while selling the property after hoarding for few years the buyer can expect good returns on investment. The old or the dilapidated building does not fetch better value as like the building with better quality of construction. The returns gained in property investment are far higher than the returns gained in fixed deposits as the interest rates are declining while the property prices continuously go on increasing.
Benefits of Buying a House as an Investment for the future:
Income Tax Benefits:
In the case of home loans being availed the borrower avail the home loans for 30 years maximum, while the actual approval of the tenure depends on the age of the borrower. Under the income tax act 80C, the borrower can avail of tax benefits for a long period as long as the borrower pays taxes to the lender. Thus through tax benefits, the borrower can save a huge amount of money.
Higher Returns Than Any Other Form of Investment:
If the flat buyer invests rightly by doing a proper survey of the growth potential in the locality the investor can expect handsome returns on investments. And the prices of the real estate are mostly non-volatile thus the borrower can at least expect steady returns on investments for the property being purchased. The returns in investment are certainly higher than the fixed deposits and sometimes can also be higher than the money invested in stocks & mutual funds.
Returns Can be Gained as Per the Inflation Index:
The ever-increasing prices of the property lead to ever-increasing inflation in the markets. Thus the value of the money declines. Thus in the case of the investment in the property, the returns can be gained as per the inflation index and the investor can expect good returns on the investment.
Income Can be Gained From Rentals As Well:
The borrower can even gain income on the property during the waiting for the investments by giving the flat on rent and gain monthly rental yield from the property. Thus as soon as the investment is done in the property the investor can expect to start gaining returns on investments by gaining the rental yield. And after the appreciation of the prices, the investor can sell the flat and gain higher returns.
We can conclude that the property investment never goes to waste as there is a steady rise in the prices of the property always. In a very rare case, the prices of the property decline, and thus the returns could be lower. In that case, the investor may have to wait for a longer period for gaining returns. Hence the investment in the property is regarded as one of the safe investments as the investment never goes to waste. And the investor can never be at a loss from the investments.