By Ritesh Sonavane on Jun 10, 2020 6:12:29 PM
Lack of knowledge in gold investment and stocks might drive your efforts in vain and derive zero profits, so it's wise to look for better options. Every investment has some pros and cons, but real estate is the only investment option where pros cover the cons and become a harbinger of hope, even in troubled times.
Here are a few points to get you acquainted with both advantages and disadvantages of investing in real estate:
Pros of Real Estate Investment
1. Sense of security
Buying real estate won't keep you bothered with often checks, and decision making as the price does not fluctuate now and then compared to other investments. Real estate is a tangible investment that has economic value. You can enjoy your investment by either using it for your own or leasing it out.
2. Generates cash flow
If you are planning to invest in Real Estate, you can either invest in a residential property or a commercial property. Renting out the features assure you monthly cash flow as per the property location.
3. Home Loan Tax Benefit
Home loans allow multiple tax benefits which significantly help you to reduce your tax outgo. Indian government always encourages the citizens to make an investment in residential properties, home loans are eligible under Section 80C for tax deductions.
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4. Simple and Controlled
Real estate is a straightforward and secure investment that also ensures a stable investment. It also gives the investor a complete authority about each and everything involved in the venture. As the investor is in charge of the property, all the decision making and outcomes lie in their hands.
5. Property Appreciation
When the market rates are rising, and the property rates appreciate, you can make a quick selling decision. Real estate values tend to change and increase over time and can help you earn tremendous profits when its time to sell. Real Estate investment is safe as it promises a stable cash flow.
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Cons of Real Estate Investment
1. Professional help required
Investing in real estate and getting the property registered on your name is a lengthy procedure. A lot of documents are required to be submitted as per the RERA Act. To follow these legal steps and to buy a real estate property can really get challenging for one. So its always better to seek help from the Real Estate agents or legal advisors to complete the entire buying process.
2. Time commitment
While buying a real estate property, the initial time has to invest keenly and carefully in property hunting. It is vital to go for site visits and to see every corner of the property before making a buying decision. Background checks and price evaluation also involves a time commitment to figure out a perfect deal for the investment.
3. Maintenance cost
Even though you buy a property and rent it out to a tenant, the owner is liable to pay the maintenance cost of the property. The maintenance cost of the property varies on the kind of property you have purchased. With these fixed costs, there are high entry and exit costs involved as well. Property registration charges and stamp duties differ from state to state as per the RERA guidelines.
4. Less liquidity
Selling Real estate isn't easy. You just cannot seek help from a broker and immediately get a deal for your property and get it sold for cash. Real estate is a long term investment compared to any other investment. Selling Real Estate is a bit time consuming and involves tedious bank transactions.
5. Property tax
People usually prefer buying residential properties over commercial properties. The primary reason being, commercial properties have fewer tax incentives compared to residential properties. In case you take a loan, for repayment of this commercial property loan there is no tax benefit of the EMI paid.
Related Post - How to Save Tax on Real Estate Investment?
In the End
Evaluate both pros and cons before making any investment decision as investing involves a lot of parameters to give you fruitful results. For more information on similar subjects, visit our page https://blog.kohinoorpune.com/
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