Throughout the world, property buying is one of the most common investment practices and it has created a huge amount of wealth for millions of people over the years. For decades now, popular wisdom widely perceives realty investment as a proven and tested way to realize one’s financial goals.
So, let’s look at the top reasons that make an investment in the property so attractive and why you should also invest in real estate.
Indians love ‘real’ estate-
Let’s accept it. Everyone values the worth of a residential property because we all have either owned, rented or lived in a home. According to a recent report on household finances by the Reserve Bank of India, about 77% of household wealth in India is invested in real estate. This is way more than 11% of all family wealth being invested in gold and only 5% of the family wealth in financial assets like cash, bank accounts and pension accounts.
Real estate is a tangible asset and it is easy to understand as we can touch it, see it and live in it. In its true sense, real estate is far more consumer-facing than stocks, bonds and crypto-currencies. As such, it just requires common knowledge to invest, unlike stocks and bonds which are still high on research and need a lot of macro-level analysis before you decide to jump in. Now with technology advancements, real estate is even easier to get into.
Real estate provides a unique flexibility to investors wherein they can utilize their property as a home or rent out while waiting for capital appreciation. Similarly, property investment is easy to finance. With almost all other investments, you pay upfront for what you buy. That’s not the case with real estate investments. With property financing options available, one can buy a house by paying just 20% of the amount as down payment and rest in monthly repayments.
The residential property market is far less volatile than other assets primarily because it’s a usable investment, driven by the supply-demand situation, and not by market forces and investors. At the same time, since property investment takes time to liquidate, even short-term speculators cannot induce any drastic fall in property prices.
All said like other asset classes, real estate investments too are prone to certain fluctuations in property prices, rental demand and rental yields. Notwithstanding these swings, property investments are among the best and most reliable medium-to-long term investment options available today.