Why Real Estate Investment is Safe from Any Pandemic?
“Which is the safe investment option in India?” It is a question that concerns every investor. And one of the answers in real estate. Over the years, the benefits of investing in commercial real estate have gained attention, especially during this Coronavirus Pandemic. But the concern is “Is real estate a safe investment?”
Read more to find out what we think about the “benefits of investing in real estate”.
Investment is a decision that most people rely on when they want to make any long-term saving. Whether it’s for future business or marriage or retirement, saving is something that people desire to start at an early stage, or at a time when they begin their first job or earn their first salary. Depending on the level of incomes and the expected saving that they will be left with, at the end of the day, the investment decisions are made. But what concerns them is the question of “which is the safe investment option in India?”
Over the years, real estate has come up as an emerging option for everyone to invest their hard-earned money in. Investment in real estate in India comes with different reasons, mostly being, to earn a second source of income. Seeing this as a potential option to generate more ROI, investors and even people with surplus income have started accepting and considering real estate investment as a huge potential. However, the major concern for every real estate investor is, if real estate is a safe investment? We have listed down some benefits of investing in real estate, which you won’t regret taking up:
1. More Control Over Investment
When it comes to investing in real estate, an investor has more control over his investment decisions. For example, if a person has surplus money, and if he wishes to invest in real estate, he will have multiple options (like commercial real estate or investment for higher appreciation).
Similarly, he will be in control to decide what to do with his real estate investment, whether to generate a second source of income or to sell off the property after a certain period. Unlike investing in securities or share market, investing in real estate does not or rarely requires help from an asset manager or any external expert for decision-making.
2. Easy To Understand
One of the major benefits of investing in commercial real estate is that the real estate market is straightforward to understand. It does not require an Einstein’s mind to invest in a property. An investor is only necessary to analyse his surplus money and to align that to invest in real estate.
Unlike any other investment like in the share market or bullion market, investing in real estate requires only a basic understanding of the cost of acquisition and rapport with the builder. The real estate market is purely based on the “demand and supply” formula, and provides a win-win situation to both buyer and seller.
If a person is going through any financial crisis, a real estate investment will always act as a blessing in disguise. Income from real estate will always help curb the impact of the recessionary phase. If we talk about a recessionary situation, the Coronavirus Pandemic has shattered the financial stability of most of the people.
However, it is acting as a boon to the rich people who can afford to invest in such difficult times, to generate income for their difficult situations like bankruptcy.
4. Better Government Policies
Since real estate is a potential market for boosting economic prowess of the country, the Government also ensures that there is transparency and convenience for those who want to invest in real estate. Government over the years has launched several schemes concerning lower acquisition costs to encourage people to buy a home.
Investors can take advantage of such plans and invest in a property to later give it on ren and earn income from it. Since there are still many people who can’t afford to buy a house of their own, staying in a rented property always acts as a rescue for them, and investors can reap the benefits of their real estate investment, while also assuring the potential rental buyers to stay more comfortably in the budget they can afford.
5. Various Tax Benefits
Another reason why real estate is the safest option is that many tax benefits are waiting for potential investors. Some of the tax deductions and benefits available for real estate investors are listed below:
A person can claim deduction under Section 24 of the Income Tax Act on taxable rental income against the interest that the investor is paying on his home loan (if he has taken a home loan to invest in a property to use as a second source of income). The deduction under Section 24 can also be claimed if the person has invested the amount in a lump sum.
A person can claim a flat 20% deduction on his investment in real estate property, as a long-term capital gain tax deduction, if he has invested in a property for more than one year.
A deduction under section 80C can be claimed by the investor on his taxable income, against the principal amount that the investor is paying on home loan (if the investor has taken a home loan from a reputed bank to invest in real estate).
A person can also claim deduction on his eligible capital gains tax, against the depreciation or wear-and-tear of his property (if any), that arises while selling off his property. However, this deduction can be claimed, depending on the condition of the property while the investor sells it off.
Real estate is the safest and the easiest way to invest your surplus money with lesser risks and guaranteed returns. Since the market is purely based on the theory of “demand and supply”, the investors find it convenient and hassle-free to invest in options that assures them of their financial stability in any financial crisis whatsoever. However, it is also to be understood that real estate investment requires a huge sum of money because the cost of acquisition is higher as compared to any other investment option.
Therefore real estate investment is advisable only to those who either have surplus money or who can afford to take a home loan to invest that money. But if you can afford or take a chance to invest in real estate, you won’t regret the decision, and you’ll always find your money secured and worthy of your investment decision.
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