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Real Estate Investment Has the Best ROI to Offer

22 September, 2020
Invest in real estate for better returns

People seeking a safe and long-run investment, often run after various deposit options in banks and other financial institutions. But the pandemic has proved to be a lot heavy on such investment plans, especially, with the shrinkage in interest rates. During such a time, real estate investment leads as the best investment plan with higher returns in the long-run.

Here is to why real estate investment can prove to fetch greater benefits in favour of upcoming days:

Better stability with profitable returns

Real estate investment is a seamlessly stable investment with better returns and does not suffer from any volatility. Recent reforms such as RERA and GST have made this business quite more transparent and feasible. It is also a mode of reliable passive income that accelerates over the passage of time, especially in the form of rentals.

Furthermore, there is also a significant rise in capital in case of developing projects based on affordable housing schemes. So, one can never as such make any loss on these grounds. A strong barrier to inflation. Investments on real estates, unlike other investments, is directly proportional to inflation in terms of returns. This shows that it is a secured investment that possibly offers higher returns than any financial institution.

Resale flats always earn medium to high returns for a longer duration. While investments of other stocks or mutual funds always stay in a dwindling condition, real estate investments show income growth with inflation within the secured boundaries of investment.

Real estate purchases have the advantage of controlled handling of funds

Large asset purchases have the advantage of keeping the funds under control. This is possible because one can easily borrow money from a lender instead of burdening his shoulder with the entire expense amount at one go. Also, putting one’s own capital and risking his lifestyle is never a hindrance while purchasing large assets. For an instance, the capital can be borrowed at quite low interest rates and there are opportunities of getting a large sum appreciation additionally on rental income. The Pradhan Mantri Awas Yojana – CLSS Scheme has made property buying more reliable.

Real estate purchase comes with tax benefits

The Income Tax Act allows for exemption on grounds of property investments. As per Section 54 of the Income Tax Act, purchasing of residential house within a predefined timeline, the amount of investment can be reduced from the taxable capital gains. This significantly curbs down the effective tax and side by side aids to build up an asset spontaneously. Also, a second home investment with substantial tax benefits can prove to be highly profitable. On grounds of house property, one can claim a deduction of around Rs 2 lakh interest paid per financial year on housing loan (self-occupied property). Holding property in joint names provides better tax benefits results to someone who receives any sort of rental income as well. The Government of India has also provided various tax benefits on housing properties so that people can easily invest without any doubt.

Reduced rates of home loans

RBI has now kept low-interest rates for housing property investments owing to the breakdown of the economy during the pandemic. At certain cases, home loan rates are the lowest that subsequently reduces EMI burdens as well. This low-interest regime is a marvelous opportunity to make a hassle-free investment in the real estate market. Some of the banks are offering rates under 7% per annum as RBI has cut out the REPO rate on multiple occasions, the prevailing Covid19 pandemic has turned out to be a golden opportunity for property buyers. Hence, this is a never-before offer for people who have plans to own a home. Moreover, if you are availing a Marginal Cost of Lending (MCLR) or a Base-Linked Rate (BLR) home loan, your EMIs are also likely to reduce due to the REPO rate cut by the RBI.

Online classes and Work From Home are here to stay

Based on the current situation with the ongoing pandemic, children and office workers are having online classes and attending work from home respectively. This new normal will keep on continuing for an unknown period of time. Such online activities require more space at home, a noise-free atmosphere, and some privacy that is possible to have in a self-owned house. Reports suggest that this is a major factor resulting in property purchases in any metropolitan city like Kolkata. Depending on the strength of the family, people are now booking 2BHK, 3BHK, and even standalone bungalows for a better and secured living.
Real estate investment will remain as the prominent leader among asset classes with the highest ROI. As this has zero volatility, real estate investors lead a peaceful life with a secure future for them and their families.

This is probably the best time to invest for an affordable living as the PMAY CLSS benefits, lower interest rates and developers’ incentives along with other favourable factors do not often come together as a package.

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