REAL ESTATE INVESTMENT IN INDIA

Is it wise to invest in real estate in India?
It permits leverage at very low risk, lends stability to the portfolio, and can be a steady source of income. In the long run, real estate has the potential to yield extremely high returns.
In the long run, real estate has the potential to yield extremely high returns. It has several tax advantages and has the potential to provide a steady cash flow. The following are just a few of the many advantages that real estate has over other types of investments.
steady source of income The rising demand for rental housing It has increased by 29.4% sequentially and by 84.4% annually, while average rents have increased by 8.4% sequentially in the April-June quarter. In the coming years, this demand is expected to rise, making rental units a reliable source of income.
If inflation or other macroeconomic trends cause the currency’s purchasing power to decrease, real estate can also protect against capital loss. According to RBI data, property rates increased by an average of 15.1% across the major cities between 2011 and 2021, which was significantly higher than the average inflation rate of 6.15 percent during this time. Demand for real estate has rebounded strongly in spite of hiccups like the 2008 global financial crisis, the implementation of RERA, demonetization, and the pandemic. This has restored investor confidence in the industry. The strength of the sector is demonstrated by the fact that average residential rates in the 13 cities tracked by the index increased by 2.4% q/q and 8.0% y/y while aggregate demand increased by 16.9% q/q and 27.7% y/y.
Plenty of liquidity
Property can also be used as collateral to obtain loans. Since these advances against property (LAPs) are gotten, they are less expensive than individual credits (unstable) and accessible for longer residencies. Customers adore LAPs, and the market is expected to expand at a CAGR of 14% between the years 2025 and 26. Reverse mortgage financing is another option for seniors who want to borrow money against their home without giving up ownership.
Investments in real estate have always been expensive, but things have changed in recent years. Financial backers can now take a more modest openness through land venture trusts (REITs). REITs are organizations that own, work and money pay producing land resources. They are popular because they are regulated by SEBI, have liquidity because they are publicly traded, and only 300-400 rupees per share are required. REITs are currently restricted to commercial property, but they may soon be permitted to include other assets like shopping malls, warehouses, industrial parks, and possibly housing.
Leverage potential
One major advantage of real estate investing is the ability to finance it with debt. Real estate allows one to invest more than their current net worth, in contrast to other assets like bonds, mutual funds, or stocks. The majority of lenders only require 20% to 30% down payment. Because of this leverage, property investment is a viable option for potential investors. Furthermore, home loans are possibly the cheapest form of credit, with interest rates as low as 7-8 percent. This leverage comes at a very low cost. It gets even better if the house is used for oneself or rented out.

The tax benefits on the interest bring the loan’s actual cost down to just 5-6% for those in the 30% tax bracket. In conclusion, real estate contributes to portfolio diversification and mitigates the effects of volatile investments like stocks and equity funds. At the same time, issues like illiquidity and transparency exist. As a result, comparative price evaluations, background checks, and due diligence cannot be overstated. Purchasers ought to likewise allude to information reports and solid master exhortation to settle on the best choice.