The real estate business in India has grown exponentially in the last few decades. With India’s population expanding rapidly, the demand for housing keeps on increasing. And this makes residential housing a viable investment option. Investing in real estate in India is seemingly one of the lucrative ventures. What’s more? Since the government relaxed the stringent FDI rules, investor-friendly policies keep drawing foreign investors in the country.
Here are the advantages of investing in India’s real estate business:
1. Property is a controlled asset
Investing in the real estate business is simple. There are many property portals where you can get homes listed for sale. Firms like movoto are one-stop destinations where you can find endless property options.
These are, for example, Spacio relators, Narains, NBCC India Ltd, and many more. You may need to hire a real estate agent, but the payment is one-off. This is cheaper compared to share brokers who charge an annual commission if investing in the stock market.
Investing in homes is presumably the safest investment. The returns are high, and the associated risks are low. Although India’s market keeps fluctuating, the level of variation is reasonable, and you’re unlikely to endure losses when buying or selling property in India.
Although investing in stocks and shares can give high-profit margins in a few years, the risks are too high. But, housing is stable and safe over a long period. The property appreciation will give you a sense of security because land and buildings are common types of appreciating assets.
However, to reap this benefit, it’s advisable to research the property location thoroughly before investing. There’s no guarantee that the value of your property will rise indefinitely. And this is particularly true of you invest in a property in the wrong location.
3. Financing options/Cheap loans
There are various financing options in the real estate sector in India. They include banks, non-banking institutions, financial companies, and private lenders, and all offer cheap property loans. For instance, you can get a home loan for about 9-11 % and an auto loan for 14 % interest, making home loans relatively cheaper.
4. Tax benefits
You can avail substantial tax benefits while investing in real estate in India. You’ll get tax exemptions in re-investments of sale proceeds of the property. For example, income from a rental property isn’t subject to employment tax. As a real estate investor, you’ll benefit from tax breaks for property depreciation maintenance repairs, legal fees, and insurance. You’ll also enjoy lower taxes for long-term real estate investments.
You’ll also enjoy a considerable deduction from table income while paying a housing loan. The tax benefit is available on all housing loans raised in the country, and it will save you money while encouraging you to invest more.
5. Real estate is a flexible investment option
Real estate investment suits different needs and budgets. Whether seeking long-term capital growth or buying a retirement home, investing in property is always a good option. You can buy a home in a location with an attractive rental flow and get continuous income every month. Moreover, you can acquire an old property at a lower price, renovate it, and raise its resale value. You can also invest in stocks or mutual funds.
6. Capital appreciation
The cost of property keeps on rising, and you can never go wrong, investing in India’s real estate market. You can acquire property and leave it for a few years, without remodeling or letting it tenants. But, if you decide to sell it, you will surely get a profit.
Cities also keep developing; you can buy property in a remote area with prospects of developing in the future. This way, you stand to enjoy huge profits after some years. For instance, your property’s cost will be way more for in like twenty or more years later. Real estate investment is long-term; your investment will grow over time and will benefit your family members who will inherit the property from you.
7. Investing in real estate covers your mortgage payments
With rental real estate investments, the tenants cover your expenses. The income you receive from your rental property monthly will cater to your mortgage payments and any other expenses that you may have. However, it’s critical to maintain your tenants and ensure that your property remains occupied.
What are the things to note as a real estate investor in India?
The real estate business in India is more or less similar to any other country, and the rules are the same. First of all, decide on what to buy and what to sell. Choosing the right property is critical in this sector. The method of investment is also of utmost importance.
There are different types of properties all demand distinct ways of financing. Invest in a property that you are sure to get a high return on investment. Opt for commercial property; it bears good profits. But consider the location and the essential facilities before investing.
Gauge the market and have the latest information on the market trends. India is a very fluctuating market, and all smart investors keep an eye on the ever-changing trends. You won’t make the best deals buying or selling properties if not update with the market situation.
Buy property when few people are doing so. Sell the property when there are high prospects of making a kill. Lastly, pricing is a critical aspect in the real estate business. Keep in mind the competitive environment and price your properties smartly. Consider factors like the location, demand of the property, and the property’s future utility as you price it.
The bottom line
The real estate business in India is highly unpredictable. Profits and losses are probable in the sector-just like in other types of investment. However, timing is critical in all real estate property dealings, and selling your property at the right time can accrue immense profits. If you plan to venture into the real estate business in India, be smart, choose your properties wisely, and hire a skilled realtor.