Investing in real estate continues to be a good option, even in the pandemic-struck 2020. In fact, realty experts have already predicted the demand for residential spaces alone will rise to 30 million by 2022. In addition to residential and commercial projects, investors are exploring newer options like warehousing, co-working spaces and even co-living.
So what makes investing in real estate such an attractive investment and what are the benefits associated with it?
- Competitive returns
The real estate market offers far more competitive returns than others investments like stocks and bonds. In fact, since 2000 real estate has outperformed stocks by about two to one, earning an impressive 10.71 per cent annual ROI (Return on Investment), compared to 5.43 per cent for the stock market. When you invest in different types of real estate, you can enjoy the returns every year on the passive income generated by the property, invest that income in your family or more properties, in addition to 3-4 per cent appreciation annually.
- Cash flow & Rental Income
A major benefit of real estate investing is its ability to generate cash flow through rentals. In simple terms, it is the net difference between money coming in and money going out from your property. Positive cash flow is the ideal circumstance, wherein income exceeds expenses, leading to a profit for the investor. In most cases, this cash flow strengthens over time as you develop your equity.
Appreciation, of course, is the increase in the value of the rental property over time. You can thus make money through rental income and profits generated by property-related business activities. Real estate values mostly increase with time and when you make a good investment, you can make money when it is time to sell the same.
- Tax benefits
Investing in this key sector can help you enjoy the advantages of numerous tax breaks and deductions, as announced by the Government of India from time to time. According to 54EC of the Income Tax Act, when individuals invest in specified bonds, they can claim a deduction of up to Rs 50 lakh on the capital gains derived from the sale of the house property.
- Hedge against inflation
Real estate is considered to be a hedge against inflation since it is a “hard” or tangible asset. It protects you from the long-term negative effect of inflation. Also, home values and rents always increase over time, rising along with inflation. Real estate tends to maintain the buying power of capital by passing some of the inflationary pressures on to tenants and by incorporating some of it in the form of capital appreciation.
Of course, in a market that consists of many players, it is important to invest your money prudently by booking your dream home or office with a reputed developer like Arrjavv. Being a top-of-the-line developer, the Group boasts of an exquisite selection of projects in prime locations. The Group believes in providing the best services to all its buyers. All their projects are an ideal mix of architectural ingenuity, design, infrastructure, world-class amenities, locational advantage and the trustedbrand value that has been built through years of experience in this key sector.