Buying Property on Loan: Making a wise investment decision is not an easy task, especially when scores of options are available, including real estate
Buying Property on Loan: Making a wise investment decision is not an easy task, especially when scores of options are available, including real estate. Investing money in real estate has been treated as the best thing one can do in life for generations. However, in current times, there are several concerns in the minds of the new generation about real estate. Buying a property is a costly affair now. One may have to take a bank loan to buy a property and pay back in EMIs over a long period. Hence, a genuine question arises: Is it wise to invest in real estate today with loan?
Agnelorajesh Athaide, founder and chairman of St. Angelo’s VNCT Ventures, argues: “Real estate is always the best option compared to any other option. The reason being, you can buy real estate with just 20 per cent down payment and the balance comes from the bank as a loan to be repaid over 20 years.”
“The interesting part is the value of EMI keeps depreciating whereas the value of the asset keeps appreciating, creating a big advantage to the buyer. Any and every property in India, over a waiting horizon of 10 years, appreciate for sure,” he told FE Online.
Experts believe that real estate investment will be a wise decision today as one can now earn more from their property through rent, which will cover for the EMIs one has to pay to the bank against the loan.
“Properties also give rental yields and now with concepts like air BnB and trip villas, even a residential property can earn commercial returns, which not only helps the repayment of the EMI but can also become a profitable venture over and above the EMI repayment,” said Athaide.
You can buy property with the help of bank loans or invest in real estate through REITS. Indians can also buy any property across the world but there is a restriction of USD 2 lakh per head per financial year.
Dealing with fraud
Athaide said that today RERA is operational in most of the cities of India which protects the interest of the investor. Also, banks have started playing a very stringent role in disbursing loans to real estate buyers. They not only get into the legalities of the developer but also get involved with the legalities of the project. Every disbursement happens under very very strict monitoring of the work progress. This protects the buyer to a great extent.
“Police have also become very strict with complaints against developers and act quickly on complaints, which has become a significant fear force for developers. The social media shaming is also playing strong against errant developers. Due to all these reasons, the scenario has changed and buyers find it more comfortable to transact in the real estate investment,” he added.