Real Estate: Is investment in real estate good in India in 2023? Is real estate profitable in India in 2023? Benefits of investing in Real estate in India 2023:
A smart investment can be a turning point in your life. It has the potential not just to change your life, but even create generational wealth and support your offspring. Gone are the days when people relied on a single source of income and traditional savings to become financially independent.
Today, investment portfolios of millennials include a variety of assets, such as mutual funds, gold, stocks, crypto, and more. While all these assets are popular, real estate continues to occupy the lion’s share of the total assets of a typical Indian. According to a report, 77% of the total assets of a typical Indian household are in real estate.
Since the demand for real estate is always on the higher side, real estate makes for a great investment option in India. Buying a new home is always a dream come true for Indian households. While fulfilling this dream gives you emotional satisfaction, seen as a status symbol, it also promises financial growth, as real estate investment in India has a good Return On Investment (ROI).
Here are some reasons real estate continues to be a preferred choice of investment in 2023 for millions and billions of Indians:
1. Real Estate is a Tangible asset
Before anything, we are humans. We are blessed with a special set of sense organs, one such sense being touch. We feel peace and joy when we touch something that is ours. Property is a tangible asset and we unarguably know the sense of security and happiness owning a property and living in it provides. Also Property being a high tangible asset can be leveraged to capitalize on numerous revenue streams while enjoying capital appreciation.
2. Real Estate Appreciates by Value
We all work today not just for our better tomorrow but also for our family’s future.
- The value of a good real estate investment increases over time. Show me one place around you that you can still buy and own for a few rupees. Especially in urban areas, real estate is bound to appreciate due to scarcity of land.
- It is quite evident that the longer you stay invested in real estate, the more money you make. With a good investment, one can turn an enormous profit when it’s time to sell.
- If you buy a property today, even your children can use it years later. In this way, you can build generational wealth by purchasing property.
If you’re buying real estate as an investment, consider investing in high growth potential locations to maximize your returns. Properties enroute International airports for instance would be good long-term investment locations, just like Devanahalli, the town which hosts Bangalore’s new Kempegowda International Airport, is bound to spur growth.
3. Sufficient Cash Flow via Rental Income
Cash flow is the net income from a real estate investment after any mortgage payments and operating expenses are covered. By planning wisely, you can generate consistent positive (income-exceeds-expenses) cash flow.
A steady monthly rental income is a great way to build a good passive income and offers you great financial security. If you are someone who is about to retire, income from your rental properties can ensure that your retirement life is hassle-free. A good real estate investment generally provides you with 6% or greater cash flow.
Be it residential or commercial real estate, getting assured rentals month-on-month is a great way to earn a handsome ROI on your property. With agreements ranging anywhere from 1 year to 5 years, it helps you escape from the volatility of the markets. Sometimes, the returns from rentals might not be substantial but they are recurring and confirmed which is always better.
4. Real Estate is a Safe & Secured Investment Option
History proves that the real estate market always gets back on track, following even the most uncertain times. Be it the 2008 economic crisis or the recent pandemic period, the prices returned to the same level and even escalated further.
Real estate is a relatively safer investment option than other assets like stock markets and crypto. In modes of investment like the stock market, the risk of loss is omnipresent, but real estate offers increased control over one’s investment, as the prices of real estate are steady and less susceptible to frequent fluctuations.
With the introduction of the Real Estate Regulatory Authority (RERA) and reduction in interest on home loans, sales in the real estate sector have further increased.
5. Real Estate gives Decent Return on Investment
The real estate returns in the majority of Indian cities surpass the inflation rate. Hence, it offers you real profits in the long run. Unlike stocks, gold, and crypto, the investment process in real estate is quite structured with RERA, well-documented and established court precedents, and established legal procedures like stamp duty and registration. Once invested, the chances of theft or any fraud are minimal if you’re investing in a reputed builder or developer’s project.
6. Tax Benefits on Real Estate
Most of us pay taxes and by investing in real estate, we can save some too. There are quite a few tax benefits of investing in real estate. If you have opted for a home loan, under section 80C, you can save up to INR 1.5 lakh on the principal amount. Similarly, as per section 24, you can also save up to 2 lakhs on the interest payable. In this way, you can make investing in real estate more affordable and also reduce a significant amount of taxable income. Read more here: https://www.hdfcergo.com/blogs/home-insurance/heres-how-investing-in-residential-property-help-save-tax
Tax deductions on Real Estate can offset 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 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 are easily deductible.
Lastly, one might also look at ‘Depreciation Expense’, which is one of the biggest tax benefits and can also help improve cash flows by reducing tax liabilities.
Also one can get exemption on the capital gains too, if one decides to sell the property and invest in another one. Section 54 of income tax act makes provision for this.
7. Leverage
Leverage is another of the biggest benefits of investing in real estate, as the ability to invest just a small portion of one’s own money and borrowing the rest of the money to buy a property. If you save up for the down payment 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. So only a tiny fraction of your own money is invested in the property, but you still get to be the owner of the property. It also ensures you don’t put the entirety of your life earnings in Real Estate and save some for the possibility of emergencies.
Summing up
Real estate in India is easy to purchase, convenient to finance, gives tax advantages, improves your lifestyle and status and is devoid of any insurmountable financial barriers. Hence, Real Estate in 2023, remains one of the most advantageous investment options.
Contact https://wireinternational.in for investing in properties and allied services in Devanahalli.
