Everyone around the world seems to be worried about the looming economic recession. In times like this, the real estate market usually takes a hit. Ironically, this is the best time to buy a property. An investment in real estate has historically proven to be more fruitful and stable, in comparison to mutual funds and bonds. Whether you buy an independent house, a duplex, or a flat in a gated society, its value is only going to appreciate. Wondering how?
Let us clear your doubts.
1. An ever-growing demand for real estate
The human population just hit 8 billion recently. To state the obvious, we need more and more houses to accommodate the growing population. Especially in metropolitan cities like Bengaluru, Mumbai, and Delhi, there’s a steady demand for real estate. There’s a large number of NRIs who invest in the Indian real estate market. They rent out their properties, creating an excellent source of passive income.
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2. Relative stability
Although not fully immune to volatility, real estate offers relative stability to its investors. A good investment strategy is what a buyer needs. It might not be wise to put all your money into retail and industrial properties during an economic downturn. However, family homes can prove to be great assets. Historically, too, real estate investments have outperformed other investment options.
3. Tangible asset
The reason why properties offer stability is their tangibility. Unlike bonds and stocks which only exist on paper, a house is tangible. During a recession, the stock market suffers the most. Sometimes bonds and stocks lose all their value at once. But even in the worst-case scenario, your property will be worth something at least.
4. Source of passive income
If you live in a metropolis, buying a flat to rent out can provide you with a reliable source of passive income. Stocks and bonds don’t give you monthly returns. With inflation engulfing the world economy, it’s become all the more important to build multiple sources of income. On top of that, if you sell your property, you’re entitled to massive capital gains. It’s a win-win!
5. Tax saving deductions
If you wish to buy a property on loan, then as an Indian citizen, you’re entitled to some tax benefits. It’s even plausible to claim a tax deduction of up to 5 lacs under some sections of the property law. Other than the stated benefit, many builders such as Brigade properties offer year-end bonanza.
Summing up
Real estate and gold investments can be considered as most trusted investment options. The reasons stated above make real estate attractive even during economic downturns. It’s not very smart to rely on a single source of income anymore. Buying a property and renting it out can earn you some cash flow every month.
