Investment Objectives & Advice

Investment option: Real-estate

Sorry guys for the delay in article, as promised it is to tell you the next investment option Real-estate. As soon as I take the name of real estate most of you must have started thinking that it is something out of your budget, hold on let me complete the details and its beauty first.

Real estate traditionally have always been preferred by Indian investors, who have more money or who are considered to be more influential people. Common man still have doubts while investing in real-estate that is it a genuine ownership, will it be a good buy, how the returns on it can be realized, will I find someone buying this from me in future?

Let’s first understand that why I am suggesting investments in Real-estate, in what are the merits and demerits of real estate investments. Starting first with the merits of this investment

  • You own a house worth more than INR 10 lakhs with investments as low as INR 2 lakhs
  • On an average if you buy a house in metro cities, return on your investments will be in range of 15-20% as companies claim but let me tell one actual example to make you rush for such investments
  • You get the Tax benefits on your investments while repaying the home loans on principle as well as interest which can go up-to INR 2.5 lakhs means depending on Tax bracket you fall in saving up-to INR 25,000 to 75,000 per annum under-section 80C & 24 of income tax

For e.g. If you buy a house in construction phase worth INR 25 lakhs, you will require a down payment of almost INR 3 lakhs including registration and rest will be paid by bank, during the construction period you do not have to pay the EMIs, if the house get ready say in three years from now at a marginal rate of 10% the value of house will be INR 33.725 lakhs. Now if you pay the house, immediately after possession the new owner will have the responsibility to pay the outstanding loan amount through EMIs. So what you get out of your INR 3 lakh investment return of INR 8.725 lakhs means a return of 42%. If you know some alternate options better than that please share those with our readers, always welcome.

But it is not all this easy as it seems, maximum cases of fraud happen in the real estate investments so make sure that you go for right investments. The common mistakes to avoid while investing in real estate will be covered in Next article till then think how to arrange the first down payment.

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