Finance and Investments  |  27 Jun 2018

The best investment avenues are the ones that give you high returns at a low risk. Today, real estate has emerged as one of the most profitable investment options that provide exactly that. Investing in real estate is no longer an expensive and complicated process. With the introduction of new policies by the government, easing up of home loan regulations and the availability of affordable homes, real estate investments have become accessible to almost everyone. If you are looking to invest your hard-earned money in something that will give you almost guaranteed returns, here’s why you should consider real estate.

1. High price appreciation

For those looking to make an investment, they are usually faced with three main options: stocks, gold and real estate. While each of these categories have their own pros and cons, real estate is the clear winner in terms of return on investment and minimal risk.

Real estate vs stocks

Those who want to invest in stocks are often lured by the possibilities of making a quick profit through a comparatively low investment. However, even though stocks require less capital to invest, real estate is still the better investment decision. For new investors especially, navigating the stock market can be tricky and can lead to bad investments. Buying real estate, on the other hand, is a very simple process even for first-time home buyers. There are plenty of resources available, such as our first-time home buyer guide, which can make real estate investments very straightforward. Real estate is also insulated from the fluctuations which stock markets are affected by. This can reduce the risk involved and help investors get steady returns.

Real estate vs gold

Gold has traditionally been one of the most preferred investments for many Indians, however, that is slowly beginning to change. Today, real estate has several advantages over gold. One of the most significant benefits is that investing in real estate doesn’t require you to pay 100% of the total value upfront. Banks have eased their requirements for providing home loans, making home ownership more accessible to all. There are, however, no similar loans for those looking to invest in gold. Real estate has also outperformed gold in recent years and this trend is predicted to continue in the future as well. For those looking to make a safe long-term investment, real estate is definitely the best choice.

2. Tax benefits

Apart from the long-term rewards, investing in real estate can also help you save money in the short term through tax deductions. This is especially true if you have purchased real estate with the help of a home loan. Under section 24 of the Income Tax Act, individuals can claim a tax deduction of up to Rs. 2 lakhs against the interest repayment of the loan for a self-occupied property. If you have decided to rent out your property, there is no maximum limit for claiming deductions on your loan. Additionally, there are special benefits for first-time home buyers who have invested in a property worth below Rs. 40 lakhs. Section 80C also provides tax benefits of up to Rs. 1.5 lakhs on the principal repayment of the home loan.

3. Government initiatives

In an effort to encourage more people to invest in real estate, the government has launched a series of initiatives and reforms. Under the ‘Housing for All’ program, the government initiated the PMAY and CLSS schemes which provide special subsidies for first-time home buyers. The introduction of RERA has also eliminated the risk factor for home buyers as it enforces transparency in the real estate sector. Home buyers can now be assured of stricter adherence to deadlines, legitimate certifications and greater protection against fraudulent developers.

4. Affordable housing projects

Affordable housing has emerged as the future of the real estate segment. In the last few years, real estate developers are shifting their focus from central areas of the city to emerging suburban areas. This has been driven by the influx of investments pouring into these areas by large corporations who are opening up their offices here, creating thousands of jobs. Because of this, the demand for quality housing has also gone up. Potential homebuyers can find high-quality homes at prices which are a lot more affordable than the central locales in the city. This means that a small budget does not have to stop you from making a strong investment in real estate!

5. Infrastructure

For a real estate investment to appreciate, it needs to be supported by excellent infrastructure in surrounding areas. India’s infrastructural development has, therefore, played a huge role in the emergence of real estate as a lucrative investment option. In Bangalore, for example, the launch of the Namma Metro project, improvements in connecting roads and the proposed Silk Board flyover have made suburban areas more accessible. This has made Bangalore a real estate investor’s paradise. Similarly, Chennai has also seen improvements in transport and arterial roads, which have caused property values in the city to soar.

While the financial benefits of owning a home are undoubtedly impressive, one of the best parts of becoming a homeowner is the emotional aspect of it. A home is something tangible where you can create a lifetime of happy memories in. At Shriram Properties, we ensure that each of our homes is designed keeping your happiness at the centre. So go ahead and invest today in your dream home!

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