Many people prevent investing in property in India as they think that real estate investment is scary and needs a lot of money. But the reality is totally different. Yes, you read that right! When you invest in real estate, you are about to embark on one of the best investment journeys of your life. We have listed below the 7 major benefits of investing in real estate.
Direct control over investments
The first and the most crucial benefit that comes with real estate investing is direct control over investments. When you invest in the stock market, you are putting your hard-earned money into the hands of people you don't know just to manage for you. On the contrary, investing in the real estate market gives you complete control and freedom over how, when and where to invest. Also, Delhi real estate company can help you make a better real estate investment decision so that you can have complete control over your investments.
Regular cash flow
If you purchase or hold real estate, you can earn monthly cash flow by renting it out. This will increase the profits from buying property in Delhi since you rely on appreciation and the monthly rental income. Of course, there is always a risk of tenants vacating the home early, but there is a risk associated with every investment. Without risk, you cannot get any reward.
Inflation hedge
Along with being a hedge against a bear stock market, the real estate segment is also a hedge against inflation. While the total rate of inflation over the past 20 years has been nearly 37.4%, house prices have risen by nearly 98% over the same period. It is not only the hike in the market values that real estate investors benefit from. In many markets, increase in an annual rent help to keep rental income cash flows in line with the annual rate of inflation.
Tax benefits like depreciation
Another benefit that you get with investing in property in India is tax benefits like depreciation. The IRS allows real estate investors to reduce their taxable income with a non-cash depreciation deduction. Over the time period of 27.5 years, you can reduce 3.636% of your property's value (excluding the land) from your net income subject to tax.
You can pass on real estate down to your heirs
If you wish to leave a legacy behind but do not think going cash is a great idea, passing real estate down can be much better. Not only do you give your heirs an income-generating asset, but it is also an appreciating asset whose value increases over time. So, they can either keep the property and let the legacy continue or sell it and earn high profits.
Real estate can be financed and leveraged
Of course, you can technically buy stocks and other assets using debt, but this can be very risky because the financing is not to buy a hard asset. On the other hand, real estate is a market where products are generally bought with debt. Real estate investments purchased with a mortgage or hard-earned money can be structured in multiple ways that are rather affordable and safe so that big and significant purchases can be made easily with relatively small investments. Ultimately, the result is the purchase of a hard asset that appreciates over time and pays for it primarily with other people's money.
Allows diversification of assets
Investing in property in India allows diversification of assets. Real estate investment has almost no direct correlation with other famous paper-based assets like debt, equity etc. In fact, it has a negative correlation with assets like gold, stocks etc. This signifies that the last benefit that real estate offers is the diversification of assets. Growth in the value of a real estate portfolio bears little relationship with other asset classes. In a scenario where an economic boom ends, the real estate market will still yield better and more lucrative returns.
Investing in property in India is an excellent way to diversify your investment portfolio. If you invest in rental homes, you can enjoy the cash flow while the house appreciates, thus giving you significant capital gains when you need it most- in retirement. So, don't wait much and invest in real estate now with the help of clicbrics.