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Why Is Real Estate A Good Investment

admin Dec 26th 2019

Why Is Real Estate A Good Investment

The real estate landscape in India is one that is fascinating. Notably, the industry offers an excellent opportunity for investors to grow their wealth over the long term in a low risk manner. However, one will be lucky to have money in the industry during periods of high returns like the years between 2005 and 2008.

Reasons to invest in real estate
Just like the stock market, the real estate industry provides a platform for investors to grow their portfolio. But the latter has a few characteristics that make it more attractive, especially for low cost investors.

Attractive tangible asset value
Traditionally, investment was fixed on the abstract instruments like securities and where owners of the securities do not have a claim on tangible assets. As such, there is a danger of one’s investment dipping to zero. Other tangible assets like your beloved Tesla will depreciate and lose value with time. On the contrary, investing in real estate ensures that you have an actual house sitting on a piece of land whose value will always go up.

Availability of passive income
It is no secret that rich people rely on passive income to boost their daily earnings. Once you buy that house and rent it out, you will never put in any effort to earn the monthly rent from the occupant. This is also an opportunity to diversify your portfolio and hedge yourself against unforeseen risks.

Access to tax benefits
One interesting fact about India’s tax system is that an investor will get a tax break if he/she sells a house at the price it cost or at a loss. This is to say that one does not risk double costs when investments fail. Also, one can earn a generous tax break on long-term capital gains (LTCG) due to the cost-inflation index.