7 Reasons For Real Estate Investment in 2023.
To earn more than average and get their future secured, people lean towards investments. Real estate investment is one way to invest and earn ample profit with continuous cash flow. Investment in REITs is a great way to diversify your portfolio in a unique way, apart from traditional stocks and bonds. Real Estate Investment Trusts (REITs) are a list of companies that either own or finance certain real estate. REITs are listed on the stock exchange for trading and are beneficial for investors. Real estate companies are heading towards bright prospects with quantity and quality. High-Interest rates especially in commercial properties are re-shaping the intriguing investment by Indian Investors.
7 Reasons For Real Estate Investment In 2023.
1. High Returns On Real Estate Investment for Long Run:
When it comes to real estate, Mumbai is the most expensive place to buy a property. Why? Because of the scarcity of land. It is said that the longer the term period the higher the returns you will get. The value of Real Estate increases over time. Even when the pandemic hit the economy down, the real estate industry kept on flourishing. Past data confirms that the real estate industry is never off-track. Real estate generates wealth for your future generation. The ROI in real estate shouldn’t be less than 2%. Normally, the ROI on real estate investment is 8-15 % all over the world. Whereas, in India, the average comes down to 3 – 5 % which will definitely increase in the coming years.
2. Passive Income:
Everyone likes an extra piece of cake even when you are full. Passive Income acts the same way for you. The Internal Revenue Service states that Passive Income can be earned from 2 main sources viz property and Business. Renting a property brings you a good income with no labor work involved. In comparison to residential and commercial properties, commercial properties bring more returns with around 9% rental yield.
3. Steady Cash Flow:
With the increase in Inflation by every minute, the middle-class masses can’t rely on their rigid income. To fight this demon of inflation, one needs an extra source of income. Here, Real Estate Investment can be the helping hand. The best example is a rental yield, If a person rents his property, then he is liable to earn a rental yield.
4. Credit Value:
Whenever one faces a financial crisis, the first solution that comes to his mind is to utilize their assets. Real Estate can be one of those assets because of its high credit value. Real estate valuation is the process of estimating the current value of a potential real estate investment utilizing three ways: a sales comparison, cost, and income approaches. This factor helps in evaluating various investment prospects. Many times the property price and the property value differs.
5. Tax Benefit:
Investing in real estate has some tax advantages. Section 24 of the income tax Act 1961 often also referred to as “Deductions from income from house property.”, allows the person to assert tax exemptions on the interest amount of the home loan. One can use this smartly to earn tax benefits when it comes to depreciation. Real estate depreciation refers to the deductions in the value of the real estate. This can be used to claim tax deductions over the income generated from the asset and recover the cost of improvements. Also, In India Women are benefited from several tax benefits, in the context of real estate the property is offered to women at a discounted price and the earning interest is also high.
6. Tangible Asset:
Many Investment publications refer to tangible assets as ‘alternative assets’. Real Estate Investment is counted as a tangible asset that ensures added security and value to your investment. As the investment is tangible it can be leveraged to capitalize with appreciation in value. A tangible asset exists outside of your account balance or any financial statement.
Leverage in real estate means that you can utilize your borrowed capital to fund real estate investments. This increases your purchasing power by multiplying your buying capacity. Also, you can invest in huge income-generating properties and enjoy increasing returns. Example: By just paying 10-15 % of your property’s value and holding the rest amount on the loan you are still the full owner who will benefit from the future appreciating the value of real estate investment.
The Managing Director of Nivom Realty, Mr. Aditya Bharadwaj says “I believe that buying a home is a great investment in comparison to other investments, Why? Because you can’t stay inside a stock certificate. You can’t live in a mutual fund”.
Yes, stocks and mutual funds can be a big headache because it comes with higher risk as compared to real estate investment. Indian Investors prefer real estate investment as the safest asset. A person who wants to start investing with less risk but good returns should lean toward real estate investments. This Investment provides both Long Term and Short Term Capital Gains. Also, the participation of the government is seen to be increasing by 2023. The state of Maharashtra is planning to launch its housing scheme for homeless people. The solid infrastructure with aggressive competition helps benefit the investors. The effectiveness of a real estate investment may be viewed differently by different people. Considering the above facts and past data real estate is safe and effective.
If you are considering investing in real estate, hiring a consultant for the same would be an easy and secure move.
Nivom Realty is the leading Real Estate Agency in Mumbai. We are a one-stop solution provider for all your real estate needs. We deal in properties in Mumbai, which includes Residential and Commercial. Since its establishment, our whole endeavor has been focused on becoming the most trusted real estate company. We cover all the prime locations in Mumbai. Nivom realty is also known for its Best interior services, Vastu Consultants, and House Caretaking at affordable prices.
For more details related to real estate investment, you can visit Nivom Realty.