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India’s real estate industry is the second largest sector of employment in the nation, second only to the agriculture sector. The Indian real estate sector is likely to grow to US$ 1 trillion by 2030 from US$ 200 billion in 2021. It will account for 13% of the nation’s GDP by 2025. The increase in nuclear families, increasing urbanization, and improved family income levels will continue to be the major drivers of development in all real estate sectors, including residential, commercial, and retail. With its return on investment (ROI), the real estate sector of the country is flourishing and is a part of various successful investment portfolios. As per a study, 77% of the average Indian family’s wealth is comprised of real estate.
When it comes to real estate investment, consider buying real estate property and leasing it for extra revenue. In the meantime, it is one of the real estate investment options. Two types of real estate investment exist: active and passive investment. Buying and leasing a house or property is an operational investment for which you must invest your money, energy, and time to make it happen. Passive investment comprises assets you do not have or do not have any physical property. How am I going to invest in real estate without having a physical property? Hence, investment in real estate investment trusts (REITs) and real estate crowdfunding is a passive one. Both investment options have merits.
There are numerous benefits to real estate investment. Investors can potentially attain predictable cash flow, high returns, tax advantages, and diversification with carefully chosen assets—real estate can even help one accumulate wealth.
Read on to know more about the benefits of investing in real estate.
Investment in real estate is accompanied by numerous tax deductions to keep your money. It excludes tax on operational expenses, mortgage payments, insurance, maintenance, and other outgoings. Investment in real estate is taxed at a lower rate compared to other investment alternatives.
Leverage is a real estate investor term that also involves debt or borrowed capital. Some of the terms used include leveraging real estate to build wealth and leveraging equity to buy a rental property. Investors borrow funds and use them to increase their return. Others use it in the acquisition of property. It allows the liberation of money for other investments.
Property investment is a responsible investment even with the instabilities of the markets. Property investment is not as vulnerable to the impact of inflation as the stock exchange. It could be justified as a safer and more reliable long-term investment than any other.
Real estate investment returns a tangible asset. In contrast to investment in shares, it cannot be managed in a balanced way. You may face a loss on an investment, but it is not possible to have such a shortfall in real estate.
Real estate investment is a great way to earn money in retirement. As we all know, the real estate business gives good returns. Investment in rented property can pay you off. Choose the right location and buy a rented property before your retirement.
Investment in buildings or real estate is a means of gaining secure value for your investment. The chance of devaluing is minimal, as investment in real estate is increasing. The value of buildings and land also increases with the progression of years.
Cash flow = Total income – Total expenses
Cash flow is the net income minus all operating expenses and mortgage payments. Cash flow is one of the most important benefits of real estate investment. In the same way that value appreciates, cash flow also grows over time. Commercial property investment yields better cash flow.
Real estate investment returns more than the stock market. Although the stock’s potential return is high, the risk probability puts the investor’s money at high risk. With a low probability of return, a real estate investment returns valuable asset that could be sold with a margin of profit over a holdup period of years.
Want to invest in real estate? Then, you better be informed about everything before making a sound investment!
