When compared to investing in gold or equity, is Real estate a safe bet?

To answer this question, it is important to understand what a real estate investment is. Real estate is a tangible asset. Investors choose real estate because they can touch and feel the asset, and watch it appreciate over time. It is now easier to buy real estate because many banks offer loans with a 20 per cent down payment. This allows people to buy not just their home, but also many real estate assets that rise in value over years.

The stock market is considered a benchmark according to which a country’s growth is judged. Many IT, pharma, banking, real estate, oil and manufacturing companies are listed on the stock market. The performance of the stock market is closely linked to a country’s growth. As an asset class of the stock market, the real estate index on the Sensex is an indicator of the performance of the assets of real estate developers.

Real estate and equity markets both have their pros and cons, and investment in either of them depends on the level of investment one is willing to make.

The stock market, however, requires cash in hand or liquid cash. When the market conditions are favourable, you may benefit from investing in the stock market. But when market conditions are bad, you may lose your money. This, of course, depends on the value of the stocks you have invested in.

Unlike stocks, real estate prices are not regularly published, so a drop in real estate prices is not a public phenomenon, hence the panic buying due to lack of liquidity, so investors also do not get early profits (when the price rises) as is the case with a stock.

Real estate is the best asset class for investment. If you are looking to lose money, real estate is a great asset class to lose your money. These statements are contradictory but true. Investing in real estate means different things to different investors, and at the same time it has significant advantages and disadvantages.

What are the benefits of investing in real estate?

  • By investing in multiple properties, you can create an asset bank and increase your net worth.
  • Real estate investing is often viewed as a hedge against volatile investments in the stock market.
  • Rental income The rent increases each time the lease expires and is renewed.
  • In addition to the profit from renting out your property, you also benefit from its progressive increase in value.
  • Real estate is also an extremely tax efficient investment. Property can erase all or part of your income, allowing you to generate rental income at a favorable tax rate.
  • Real estate is a long-term investment because people have been holding it for a while. Selling real estate takes time.
  • The investor or buyer has much more effective control over real estate investment than other types of investments. For example, a buyer might do something with a property to add value.
  • Real estate returns are not highly correlated with returns on other asset classes (such as stocks and bonds). This leads to further diversification of the buyer’s investment decision.

Mistakes to Avoid :

After you have decided to invest in real estate, it is best to avoid buying or investing in apartments under construction. Buyers are actually lending money to a developer in the hope that they will rent out an apartment in the not too distant future. you will make a good profit when they buy an apartment under construction, but a higher profit means a higher risk. In the Indian context, the risk of buying an apartment under construction is so high that investors have to cut the price down enough to make a good profit for the buyer.

If you understand the risks involved, there is nothing wrong with buying a floor under construction for a higher profit. But most people have little understanding of the risks.

Everyone should invest in real estate. Don’t put off buying your own home. what you get when buying an apartment under construction.

Categories: Sunrise Infra


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