Real Estate For investment purposes
It is called investment in real estate when you intend to buy a property other than for residential use (for rent or profit). Due to the ever-increasing number of people and the rising purchasing power of the middle classes, long-term investments in real estate can yield high returns.
Real estate is also a type of asset, just like equity, mutual funds, and gold. As an investment, It has no comparison. Real estate is easy to understand and tangible. It can significantly increase your portfolio’s returns. It is stable because of the low volatility in real estate prices. As opposed to other asset classes that may experience large fluctuations, the prices increase slowly over time. You can also get a steady income stream through renting, even in times of economic slowdown. You can use the rental income to partially finance your mortgage payments or other expenses even if you don’t intend to live there.
Purchasing property enables you to claim tax deductions on principal and interest repayments and repairs. it enables tax saving. Real Estate provides diversification for your portfolio. It would help when different factors can be considered when buying real estate, whether for investment or personal use. While real estate can be a wise investment, it shouldn’t be your only one. Real estate can be a risky investment.
Where should you invest?
There are many schemes that you can apply for, including Housing Boards and Development Authorities. Each state has its housing board and development authority. You can apply to invest in these schemes by contacting the DDA, HUDA or MAHADA. Remember that these schemes are lottery-based, and you may not receive an allotment. Builders may also offer schemes for residential townships that may include flats, villas or plots.
There are four ways to invest in properties
1. Purchase of a plot in a new, developing area.
2. Book flat(s) in a multi-story building by a builder.
3. Purchasing a ready-to-move-in-house/flat.
4. An investment in commercial property
Buying a property
The most common question you will have when thinking about buying a house is, “When is the right time to buy a home/flat/plot?” The simple answer is that the ‘right time to buy a house/flat/plot is when ONE IS ready to take on the responsibility.
It is crucial first to consider the primary purpose of purchasing a house/flat. What are the specifications you prefer in a house? Why do you want to buy a house? Are you buying a house to live in? Or are you seeking rental income? Are you looking to make a long-term investment? What is it that interests you in the property?
Two main reasons people buy a property are:
1. Residential purpose
2. Investment source.
Clearer your reasons for buying a house will help you narrow down your search to choose a property that suits your needs.
As we have said, everyone wants a place where he and his family can live in peace, harmony and comfort. He can either borrow money or use his savings over the years to achieve this goal.
Selection of a Location:
People choose different locations depending on their personal and occupational needs.
Business owners: Individuals who own a business prefer to purchase a home in the same area as the business premises.
Salaried People: In general, there are three types of salaried workers.
1. State Government Employees: Most state employees have transferable jobs. They should buy a home in their hometown or a nearby city.
2. Central Government Employees can buy a home in the state they are permanently stationed in or near their permanent residence.
3. Private Sector Workers: The rise in pay and the number of private jobs in recent years has increased young professionals’ purchasing power. Many of them move around the country to find new employment, so they are likely to buy property in other states and cities. They usually purchase the property to live in, but they sell it at a higher cost and move to another city once they transfer. It is best to buy the property in the town they choose or their permanent residence
Real Estate as a gifting suggestion for Minors
In India, relatives will often gift money or gold when a child is born. In many cases, parents receive a large amount of cash. A large number of people open a bank account in their child’s name (under guardianship) or make a fixed deposit. A fixed deposit is a gift that grandparents give to their grandchildren every year. The gift has a sentimental value that helps to create resources and investments for the child’s future.
Investment Planning for your child
Parents are well aware that expenses and prices tend to rise with time. Higher education is more expensive than marriage, and higher education is even more costly. A child requires additional funds for education and marriage when he turns eighteen and above. It’s common for parents to opt for insurance policies. A consultant or insurance agent suggests that parents sign up for a child plan. This will allow them to pay a monthly or annual premium and ensure that their child receives a large lump sum amount at 18 years. This will enable them to provide for education and marriage. The insurance agent also states that the child will receive the assured sum upon the death of one parent, and the insurance company will pay the rest of the policy premiums. After 18 years, the child will also benefit from the return on their investment. Insurance is a tool to protect against any unforeseeable event and not an investment tool. It is better to invest in the child’s future than to buy life insurance in your name. This will allow you to protect your assets.
A piece of land for your child’s future
Investment consultants suggest you buy a plot of land in your minor child’s name if you want to invest in your child’s future. This is a piece of land without any boundary walls or construction. It can even be a plot in a layout. This is one of the most valuable investments you can make in the world. It could be used for residential or agricultural purposes. Your investment can vary depending on your ability to invest.
Section 64 of income taxes states that as the plot won’t generate income, it won’t affect the tax liability until the child turns 18.
When buying a plot of land, make sure you select the best location. It is important to choose an area that has potential for development in the future. This will ensure that your investment is well-received and will provide adequate returns for your child’s future.
