We are aware of the golden rule of investment is diversification. Or in simple words, you should never put all your eggs in a basket. But when it comes to risk analysis, there is no doubt that real estate is the best kind of investment owing to its financial security. Unlike the other kinds of investment, the real estate sector is stable and financially secure, now and in future. Irrespective of the property being residential or commercial, investment in real estate has a lot of advantages.
Chennai’s real estate market is known for its stability in comparison to other markets as the city is well developed. For example, if you are considering investing in Mannivakkam, make sure to check Mannivakkam land value. The infrastructure of properties in the city is known for its structural integrity and availability of facilities. These aspects of the market make it a wonderful investment opportunity. The demand for properties, mostly residential, is forever rising. Thus, it is a wise decision to invest in real estate in Chennai. Moreover, there are some more factors that add to the benefit of investing your money in real estate which makes it the best investment of your life.
The net income is derived from any investment in real estate after the mortgage payments and operating expenses are cleared. One significant benefit of investing in real estate is its capability of generating cash flow. Although in some cases cash flow only gains significant momentum once you clear your mortgage and increase your equity. Another way of generating cash flow is by turning the property into rental homes. It is an excellent form of investment as you can build a house on a plot for sale in Mannivakkam and make it a rental home which will keep generating steady cash flow for you. There are many websites that allow property owners to list their property for prospective tenants. You can also consider leasing the place.
Tax breaks and deductions
The secondary reason which makes real estate such a lucrative market for investment is the tax breaks and deductions. So it is an advantage for investors when you are filing for your taxes. Moreover, the cost of buying and then improving any property depends on Manivakkam land value which can then be depreciated over a particular time period.
Real estate provides you with the opportunity to force appreciation. Consider this when looking for CMDA approved plots for sale in Chennai. The natural appreciation of property takes place at 3-5% annually without any steps taken by the owner other than maintaining the property. However, the rate of appreciation can also increase if you renovate or repair your property.
This is specifically applicable to homes. But you must ensure to make the renovations through a licensed appraiser or a real estate agent to determine the most value renovations that you can possibly carry out. Although you cannot get every rupee invested back, expect a return of 80-90% return from the money you invested. Things like adding a room or creating a permanent garage will add greater value to your property in comparison to simple cosmetic renovations. Consider revamping the kitchen or the bathroom which will have a huge impact on the net worth of your property.
Leverage your investment
If you are considering investing in assets whose worth is more than you need to invest, there aren’t many options other than real estate. For example, you have decided to make an investment of ₹4000000 in the stock market. So what do you do? You buy shares worth the same amount as various companies.
However, if you are investing in real estate, you can begin investing a fraction of the amount. You spend ₹80000 in buying the property (in the form of a down payment) and the rest can be financed from a bank through home loans or any other lending institution, given you have a good credit score and a steady income.
Hence, only by investing 20% of the total value of the asset, you can become the owner. In the upcoming years, you are able to clear the mortgage and eventually increase the rate of return you yield from the investment. The rate of return can be increased by paying off your mortgage and appreciation.
A sense of financial security
2020 has rocked the global investment markets, be it stocks or real estate. But there is no denying that the real estate investment market is resilient and showing signs of growth and improvement.
Since it is a form of long term investment, you are well aware of its appreciation. Housing has the capability of bouncing back if you have the patience of holding on to it.
While many people choose to invest in real estate only after their retirement with the hope of supplementing their income, there is no correct age for investing in property. So if you can afford to pay a fraction of that Mannivakkam land value, don’t hesitate or wait to make the move.
For those people who are trying to build a legacy and pass down one’s family wealth to the next generations, real estate is a better option. In future, your heirs can keep the property and decide to continue the legacy, or they can choose to sell it and earn a significant profit.
There are many benefits of investing in real estate. In fact, you can liquidate it in a couple of months if required. Whereas it can also reap the benefits of regular cash flow as your property appreciates and eventually provides you with gains. Whatever might be your choice, do your own research and consult with licensed professionals prior to investing.