Why Real Estate Investments make sense?
August 5th, 2015 Posted by Sohan
"Never depend on single income. Make investment to create a second source." - Warren Buffet
Though the above is true for most cases, it more so in case of India. Real estate investments in India are the safest bet considering the no or limited downside. This is what makes real estate the wisest form of investment, moreover makes way for the best investment returns or capital value appreciation.
Consider the following reasons for investment in real estate:
1. An Enjoyable Investment
Bank deposits, bonds and shares cannot compete with real estate investments. One way to invest and enjoy appreciating value is to own a home in the upcoming properties and residential projects in India. Deposits, while allowing returns in the form of interest, disables you from actually withdrawing them as and when you wish, given the interest actually gets added to the principal amount. One rarely sees people withdraw the interest on deposit with actual intention of spending. A residence gives you the satisfaction of saving on rental amounts. Buying a home and then renting it out will result in a continuous inflow of cash – more like and income than savings. This shows that home ownership is the most superior form of investment than others. Other purchases like vehicles or electronic gadgets get their values depreciated with use unlike a home.
2. Value Appreciation
Over time, the value of properties appreciates. Intelligent investments in prospective properties in Delhi have produced smart returns. Multifarious increase in value is possible only for real estate. Though shares of a company too, provide good returns, it brings about uncertainty and turbulent changes to your family fortunes and hence not advisable.
3. An Extended Shelf Life
Unlike depreciating assets, the life of a property or home lasts longer and without devaluation. Properties, almost last forever. Even aging plots of land can do wonders with redevelopment, homes with renovation which secure them for generations. Other investments like bank deposits cannot be held on to for a long time.
4. Tax breaks
It is true that property and income from it often add to complicated tax returns you file. However, it saves tax in the long run. Home loans result in the most profitable tax deduction on your salary, resulting in an increased salary at hand. Owning rental properties has its benefits too. It is possible that these rented properties offer deductions in the guise of repairs though the increased income is taxable.