Reasons to invest in Real Estate this year: Real estate is possibly the most feasible investment zone in today’s time. A place to stay and make a life there is still a very relevant concept. A residence is the bare minimum scale standard for living a good-quality family life which makes it a priority-based expenditure territory.

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Wanting homes in proximity to the place of work and other socio-cultural infrastructure is every modern-day buyer’s top demand. Investment in realty clearly assures a plausible customer engagement, even more so if one is in ownership of property in popular and well-oiled infrastructurally growing realty corridors.

 

Listed below are five reasons why you should invest in real estate: -

 

1. Valuable source of passive income

One job does not make two ends meet amid steep price commodity rise and inflation, which are current economic realities. It just manages to keep your head above water. Real estate assets can be used as a great source of capital revenue in the form of housing rentals. Rental Housing has emerged as one of the growth drivers in the realty markets both in satellite cities and Tier 1 and Tier 2 cities. The return-to-work-from-office setup has led people to flee back to their work destinations and most of them are salaried employees.

They cannot afford to buy homes but can definitely channelize a portion of their incomes into monthly rentals. Housing rental prices have shot up ever since the Covid effects have waned in the backdrop of stark inflation and interest rate hikes. Real Estate Investment serves as potential saviors and crisis averters in times of financial downsides. There are high chances of investors propelling more money in dark times when the appreciation of real estate properties grows at higher rates and brings gargantuan return-on investments. One makes a sound real estate investment if he or she calculates tax percentage and maintenance charges beforehand and then cumulatively decides on the property pricing mechanism.

Shiv Parekh, founder of hBits, said that real estate has been an attractive investment option for generating wealth and securing a stable income. In fact, 77 per cent of Indian households invest in real estate, as a part of asset creation, as per Reserve Bank of India report. This asset class offers a range of benefits such as high growth potential, high returns on investment, safety and stability of income. 

"Real estate is one of the most lucrative investment options for consumers, be it senior citizens, mid-age consumer segment or the young millennials. It is a great investment option, across demographics and geographies," Shiv said.

2. Ever-increasing appreciation value 

The location of a property and its infrastructural connectivity plays a major role in the amplification of its appreciation potential over the course of a few years. This means that a real estate property owner is most likely to earn substantially more, by huge margins every year if he decides to invest his surplus money in a real estate hotspot. According to experts, the value of a realty property rises by 6-8% every year.

Sharing similar sentiments, Dr Renu Singh, President, Sales and Marketing, Spaze Group, said, “A sense of well-guided personal realty investment policy can make property holders considerably wealthy. Real estate is a tangible asset resource that will never lose its long-term value. Real estate ownership is the source of sustainable wealth accumulation, which can secure future generations as well.”

3. Tax Benefits and Sops

In times of property depreciation, real estate investors can leverage tax breaks from maintenance and repair expenses. Investors who are up for long-term-realty investments in realty are also at the end of lower tax rates compared to other industries.  

Rajesh K Saraf, MD, Axiom Landbase, said, “A prior, deep-rooted and extensive understanding of tax policy for realty investors is critically important. It makes them less susceptible to chicanery and allows them to make prudent decisions related to property investments. Tax remissions and rebates in unforeseen conditions encourage different players to participate in the realty market and bring many investors to the forefront as they feel they are protected against any kind of adverse economic circumstances. Sops and Tax benefits act as mitigators in the period of property devaluation.”

4. Tangibility adds to Real estate’s Value 

The tangibility of a real estate asset does great service to its equity and value. In India, the land is not merely seen as a remote or immovable asset. The primacy of landownership is intensive and is regarded as means of earning bread and butter. The sociocultural beliefs are long-held and widely cherished. It is easy to own and sell and is regarded as the safest economic venture which has a prominent capitalization value and can soar up the fortunes of generations to come. Hence, realty investments are comparatively risk-free and can be channeled into multiple revenue-earning streams.

Shiv Parekh, founder of hBits said, "For millions of Indians, real estate has been an attractive investment option for generating wealth and securing a stable income. In fact, 77% of Indian households invest in real estate, as a part of asset creation, as per Reserve Bank of India report. 

"The rental yield of a commercial property, at around 9% per annum, is higher than the yield from a residential property. So, an investment of Rs 25 lakh in fractional ownership has the potential to deliver Rs 2.25 lakh per year in rental income," he added.

 

5. Beats Inflation

 

The property value witnesses sustainable growth even in the midst of crippling inflation. Property prices undergo an imminent increase in the face of inflation, which is why real estate investors are always on the brighter side of attracting good rentals and returns on their property.

Amit Modi, President, Credai Western UP and Director, County Group, said, “Real estate has always retained its timeless and flamboyant character as an investment-friendly zone, which has still not lost its vigor even in the midst of competition from various investment channels. Any kind of business planning or functionality requires the fulfillment of primary capital which is land. The paucity of land and space has also shot up the demand for real estate and owners who are in possession of land and properties are capitalizing on the large-scale demand. Realty will always be the hot favorite investment class in the markets where scant supply and rising demand are at loggerheads, causing the prices of existing property lands to go up.”