Know Why Real Estate is a Superior Investment ?
From stock markets to mutual funds or gold to bonds; of all the investment opportunities we have, why is it that Indians still prefer investing a real estate? One reason perhaps is perception. Real-estate is perceived as a safe investment instrument because it comes with the backing of banks, who in-turn are backed by the Government. For a common man, this surety helps. There are however a few more reasons why Indians are taking to investing in real-estate. We at Scapers, take an in-depth look.
1. Real Estate Is Tangible: You can see it, measure it, check it for quality and physically observe it. Take in comparison, stocks. All you get to see are tickers on television. This physical aspect however only helps placate the mind. Another aspect that reassures an investor, is the fact that if something happens to the building, the land is still of value. In comparison, with the case of stocks and other investment instruments, once it’s gone, it’s gone!
2. It’s Easy To Begin: For most people buying a house is a life goal. Those who achieve this goal quickly, eventually begin to realize the value of the property they have bought. Others though, may begin with the intention of investing. No matter which category of people you fall into, it’s fairly simple for anyone to invest in real estate. You don’t need any prior knowledge, skills or qualifications.
The stock market in comparison requires some level of education and an understanding of the market and how it works. What are the different financial instruments used, how trading works, companies in the market, their positions, how changes in the stock affect these companies; these are just a few questions you need to have answer too.
3. Money Lenders Seem To Like Property: Buying property is a thought that crosses the minds of a majority of Indians. Everybody realizes this and attempts to cash-in on the craze. Banks understand it and provide hefty loans, as do money lenders and Non-Banking Financial Companies. This works out as a win-win for both investors and money-lenders. While it may feel like buying property drains you of all your resources, it is still easier to borrow funds for property as compared to any other investment option.
4. The Control Lies In Your Hands: You don’t depend on volatile markets, you are not taken by surprise with company mergers and acquisitions and you don’t need to hire one person just to help you with your investment (unless you wish too). You are also in control of wealth generating decisions such as increasing rent or when to sell. And who better to decide, than you yourself.
5. A Source of Passive Income: Yes! The initial effort of buying a property can be quite a bit but in the long run, it pays off. Property can always be leased out on rent. The investor only needs to find a tenant, which in India, there is no scarcity off. Over the years, property pays for itself without much time or effort spent on part of the landlord. It also acts as a backup source of income for the investor, who can change rates at any point.
6. Real Estate helps Diversify your Portfolio: Put simply, this refers to spreading your money across various assets in order to reduce risks. Real Estate has always served as a safe tangible asset for this purpose. It provides protection from inflation and other market fluctuations.
7. Tax Deductions: Investing in real estate helps you save on tax. There are a number of benefits under sections such as 80G, 24 etc., no matter how many properties you own.
8. Inheritance: Every Indian parent wants their child to not have to struggle in life and real estate assures them of that. Real estate can be passed down for generations. Of course, you can do the same with other investment instruments, but their value fluctuates much more than real estate. Traditionally, real estate is known to appreciate in value.
Call us safe-players or smart-investors, Indians know how to save. And if real-estate investments are how we prefer to save, so be it! We at Scapers will guide you through your property investment deal. After all, a population of over a billion people can’t all be wrong.