After a long and dormant phase, the Indian real estate market has finally begun to look up, backed by solid infrastructural developments and burgeoning demand. The reasons for the upswing in the market are a favorable economic outlook and optimistic buyer and investor sentiments. The market witnessed momentum after the pandemic-triggered slowdown, and in the current positive outlook, it is only gaining strength. As a result, this could be the best time to invest in real estate in India.
From time immemorial, the idea to invest in real estate has been associated with status, wealth, and credibility. It is the best way to secure one’s wealth apart from investing in gold. Through this article, let’s understand why it is the best time to make a real estate investment.
1. Rapid growth in the industry
According to a report, the real estate market in India is witnessing significant growth and expansion. Its value is projected to grow to ₹65,000 crores in 2040 from ₹12,000 crores in 2019. Moreover, its GDP contribution is expected to reach over 13% by 2025.
Therefore, the country’s real estate is a lucrative avenue. Additionally, many multinational companies are also launching their operations in India, which is a positive sign for the country’s employment market. As more Indians gain access to increased capital, the demand for housing is anticipated to increase.
2. Lucrative investment return
In India, real estate prices tend to appreciate over a period of time. When a property owner is ready to sell a home or a commercial space, they can earn huge returns if the investment is wisely chosen. The rental income also increases with time, leading to a rise in cash flow. Generally, the longer a person holds the ownership of a property, the higher the amount they can earn from the sale or letting of the property.
3. Safe and secure investment opportunity
Real estate investment in India is safer compared to other asset classes, including cryptocurrency and stock markets. It is because investing in real estate is among the more secure financial strategies, unlike the stock market, which can be volatile. The real estate market is relatively stable and less prone to frequent fluctuations.
Additionally, the Real Estate Regulatory Authority (RERA) and other government authorities regulate the real estate sector. Well-documented legal precedents reduce the chances of fraud.
4. Leverage
One of the reasons real estate is the best investment right now is the opportunity to leverage. Individuals can purchase a property with only a part of their funds while financing the remaining amount from a bank or a housing finance company. For instance, one can buy a home worth ₹1 crore by making a down payment of ₹15-20 lakhs from the available resources and applying for a home loan for the remainder.
5. Tax benefits
In India, every individual earning an income is liable to pay taxes. Owning real estate enables one to claim tax deductions and get the benefit of tax savings. Rental income is also not subject to self-employment tax.
Apart from these tax benefits, the government provides tax deductions for aspects like insurance, repairs and maintenance, depreciation, and legal costs of an asset. It also provides deductions for the interest accrued on a mortgage. Real estate investors can enjoy reduced tax rates due to the nature of their long-term investments.
Section 80C of the Income Tax Act permits taxpayers to benefit from tax deductions of up to ₹1.5 lakhs on house loan principal amounts. Likewise, one can also claim a deduction of up to ₹2 lakhs under Section 24 on the home loan interest. Thus, real estate investment in India is financially beneficial as it helps to reduce a significant chunk of taxable income .
6. Adequate cash flow through rental income
If one invests in real estate, one can generate consistent cash flow through monthly rental income. This is a mode of high passive income, offering financial security to the investor. Rental income is suitable for people who are about to retire as they need not worry about earning.
Bottom line
Real estate has always been a dependable investment option with minimal risk. Most investors prefer this choice above all other investment options. It is apt for investors with a low-to-moderate risk appetite and those with a goal of building an asset.
Despite market volatility and COVID-19-triggered turbulence, real estate has performed better than other investments. As the market continues to boom, real estate investment in India can shower favorable returns in the future. Since India is currently the best place to invest in real estate, one can look into the luxury residential apartments by Piramal Realty. With several luxury real estate projects in Mumbai, Piramal Realty enables one to secure their future, live a luxurious life, and leave a legacy behind for their loved ones.
Disclaimer- This article is based on the information publicly available for general use as well as sources mentioned herein. We do not claim any responsibility regarding the genuineness of the same. The information provided herein does not, and is not intended to, constitute legal advice; instead, it is for general informational purposes only. We expressly disclaim any liability, which may arise due to any decision taken by any person/s basis the article hereof. Readers should obtain separate advice with respect to any particular information provided herein.
