Why is residential real estate a good bet in the current situation?

Published: July 2, 2020 3:58 PM

The tangible aspect of a home as a long-term investment tool with a sizeable return over the period has emerged stronger than ever.

real estate, residential real estate, a good bet, in current situation, Tangible asset, financial security, steady income, rent From time immemorial, owning a home gives a sense of security both emotionally and materialistically.

The definition of what a home is and what it signifies has been constantly evolving over time, and the unchartered waters that we find ourselves in, has further accentuated its importance. The tangible aspect of a home as a long-term investment tool with a sizeable return over the period has emerged stronger than ever. It is considered one of the best and secure investment options in the current scenario. Even though it may just be a physical property, it is often associated with an intangible emotional value, which in itself is a good reason to invest in residential real estate.

Here are a few reasons why this is the best time to invest in residential real estate.

Tangible asset and financial security

Owning a home is one of the most important and largest financial investments one can make. Besides, the future financial security, a home is also an immediate tangible asset, which gives the investor a sense of physical security as well.

Incremental value of a property increases with time

Globally, gold and property are the best-known assets as their value always increases with time. In real estate, there are various factors that define the value of a property- Land, location, time, infrastructural development, interest rates, etc. A property which is at a prime or futuristic location and includes advanced features will be a good choice, as it promises a high return to the individual who has invested in the particular property both in terms of rent or outright selling.

A safer investment option

The current volatility of equity market, mutual funds and the receding rate of interest of traditional (financial) saving tools, has made home one of the better feasible investment option (in the present scenario). The prices do not fluctuate overnight due to market fluctuation, and moreover it offers relatively lower risks and greater scope for diversification.

Steady Income

Real estate investment can effectively generate more revenue than what was cost to finance it. The current unprecedented socio-economic environment has instilled a sense of larger fiscal discipline especially the cash flow aspects of operating a business. Being a landlord and renting out a property you own will result in steady cash flows even in uncertain times as present.

According to a report, jointly released by Housing.com and National Real Estate Development Council (NAREDCO), the self-regulatory body of the Housing And Urban Affairs Ministry, 35% prefer to invest in property over gold (28%), 22% in fixed deposits, and 16% in stocks, thus making property the most preferred investment option. Home has always been a prized possession. From time immemorial, owning a home gives a sense of security both emotionally and materialistically. The underlying benefits, especially the intrinsic value a home adds on its owner. makes it one of the safest and most credible investment options, for all times.

(By Ashish R. Puravankara, MD, Puravankara Limited)

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Have loan but lost job or other source of income due to pandemic? RBI to give you respite
2Fixed deposits fetching negative real return! RBI saves FD investors from going deeper into crisis
3RBI to allow offline payments using cards, mobile devices – Here is how it works