03 July, 2023    

Five Reasons Why You Should Invest in Real Estate Right Now

In the realm of investment opportunities, real estate has emerged as a time-tested and reliable avenue for individuals seeking to grow their wealth and secure their financial future. Whether you're a seasoned investor or just beginning to explore your options, gaining a clear understanding of the importance of investment can offer valuable insights.

So, let’s delve into the five compelling reasons why now is an opportune time to invest in real estate. From the potential for wealth creation and steady income to the tax advantages and tangible nature of real estate assets, we will explore the significant benefits that come with real estate investing. So, if you've been contemplating where to invest your hard-earned money, uncover the benefits of investing in real estate below that deserve your attention and consideration in today's market.

Massive potential for appreciation

Real estate has a remarkable track record of value appreciation over time. Property values tend to increase, allowing investors to reap substantial profits when selling their assets. According to ET, some statistics highlight that the average rate of property prices in Bengaluru saw a 10% appreciation in the past year, making it the market with the sharpest uptrend in property prices. Additionally, rental income also tends to rise, contributing to higher cash flow. Unlike the stock market, real estate provides a greater level of control over investments and offers the potential for multiple revenue streams, while enjoying capital appreciation.

Cash Flow

Having extra cash coming in from another stream of revenue never hurts. Rental income from properties can provide a consistent source of cash flow for business owners, in addition to the income from your company. Real estate investments offer the advantage of generating consistent cash flow. After deducting mortgage payments and operating expenses, rental income provides a reliable source of passive income. As time progresses, cash flow tends to strengthen as mortgage payments decrease and equity builds up. With good real estate investing, you can expect a cash flow of 6% or more, ensuring long-term financial security.

Tax Benefits

Real estate investing provides various tax advantages that can help reduce overall tax burdens. In Bangalore and all parts of Karnataka, taxpayers can claim deductions on home loans taken against investments in property. This is a great way for people to save on their tax payments. Rental income is not subject to self- employment tax, and property owners can benefit from tax breaks on property depreciation, insurance, maintenance and repair expenses, legal fees, and mortgage interest. Moreover, long-term real estate investing often enjoys lower tax rates, allowing investors to optimize their returns.

Inflation hedge

Gold no doubt acts as a hedge against inflation in the long-term; however, nothing beats real estate. Inflation has a soothing effect on real estate debt, as the market turns inflationary, the prices of homes rise over time. As the value of money decreases over time due to inflation, the value of real estate tends to increase, helping to preserve the value of the investment. As business owners, we are always looking for ways to maximize our money. Inflation literally evaporates the value of our hard-earned dollars, and having a healthy real estate portfolio simply helps you hedge your bets.

Secure and Safe Investment

Compared to other assets like stock markets and cryptocurrencies, real estate is a relatively safer investment choice. In uncertain times like pandemics, inflation issues, and recessions, stocks and bitcoin are too volatile investment options. On the other hand, throughout the past few decades, real estate has consistently grown. Sales in the real estate sector have increased as a result of the Real Estate Regulatory Authority's (RERA) establishment, decreased home loan interest rates, and decreased stamp duty in some states. Real estate values are stable and less prone to frequent volatility, unlike stock markets and cryptocurrencies, which are overly fragile. Of course, this comes with the caveat that you should invest in a ready home, where there is no risk of delays, or invest in under-construction property only with a good developer with a solid track record and after the requisite due diligence.

Bottom Line

Investing in real estate today can be a smart choice for individuals seeking a secure and profitable investment avenue. The advantages of real estate investment include the potential for value appreciation, consistent cash flow, tax benefits, leverage opportunities, and the tangibility of assets. These factors give the answer to why invest in real estate for diversifying portfolios and building long-term financial security.

Agarwal Estates is a reputable real estate company in Bengaluru, known for its 10 years of experience and 95% customer delight. The core concept revolves around empowering customers through knowledge, building trust and transparency by providing comprehensive information, and fostering a strong bond. Choosing Agarwal Estates can be a reliable decision for individuals looking for trustworthy real estate services in Bengaluru.

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