Financial Benefits to Look Forward to When Investing in Real Estate
Jun 03, 2019 Real Estate News
For most of us, the dream is to own a house and live there. As soon as we have accumulated a certain amount of savings, our first thought is to proceed towards fulfilling the dream of owning a house. Not only as a great investment option buying a property also meets emotional needs while giving us a sense of security.
Just having enough savings to buy the house is not enough to make the wise purchase investment. There are a lot of things that a buyer needs to keep in mind before getting into the world of real estate. With the rise in demand for housing, the real estate is growing and is expected to grow even in far future. The main aim of investing in real estate is the better return. The return in real estate might be slower than other investment areas like mutual funds, etc., but the returns are highest.
The reason for the growth in the demand for real estate is the growing amount of nuclear families. The cities are expanding, and so are the needs of the individual properties. The availability of the land is, however, only limited. This is one reason for the prices going higher.
One cannot overlook the benefits of investing in real estate. We discuss the benefits below:
1. Capital gains:
The returns on the real estate investment are higher than other investment areas. However, the process in the real estate market is cyclic. In India, the real estate was at a peak from 2003 to 2008. The year that follows saw a significant slump in prices. The market revived for again for the next three years later. The market has been stable for the last four to five years. Hence, an investor needs to make sure that they have done proper research on the cyclic prices in the area they are willing to invest.
Having a hospital, railway station or airport will raise the price of the property and the homeowner will get a reasonable price when they sell it off.
2. Tax savings:
Buying a property comes with various tax benefits of them being the interest component of the EMI of the particular financial year is deductible form a person’s taxable income up to Rs 2 Lacs. The principal element of EMI is also deductible under Section 80(C) of the Income Tax Act.
3. CLSS Benefit:
To promote the PMAY, the Ministry of Housing and Poverty Alleviation has introduced the CLSS, which is an interest subsidy scheme. The scheme is targeted towards the Economic Weaker Section, Middle and Lower Income Group. The scheme is valid on a loan of Rs 6 lacs and above where the minimum subsidy is Rs 2.67 lacs. The only restriction is that you or your spouse must not own any other property in the country. Only one unit per family is allowed, and you must not have availed the PMAY facility before.
Just having enough savings to buy the house is not enough to make the wise purchase investment. There are a lot of things that a buyer needs to keep in mind before getting into the world of real estate. With the rise in demand for housing, the real estate is growing and is expected to grow even in far future. The main aim of investing in real estate is the better return. The return in real estate might be slower than other investment areas like mutual funds, etc., but the returns are highest.
The reason for the growth in the demand for real estate is the growing amount of nuclear families. The cities are expanding, and so are the needs of the individual properties. The availability of the land is, however, only limited. This is one reason for the prices going higher.
One cannot overlook the benefits of investing in real estate. We discuss the benefits below:
1. Capital gains:
The returns on the real estate investment are higher than other investment areas. However, the process in the real estate market is cyclic. In India, the real estate was at a peak from 2003 to 2008. The year that follows saw a significant slump in prices. The market revived for again for the next three years later. The market has been stable for the last four to five years. Hence, an investor needs to make sure that they have done proper research on the cyclic prices in the area they are willing to invest.
Having a hospital, railway station or airport will raise the price of the property and the homeowner will get a reasonable price when they sell it off.
2. Tax savings:
Buying a property comes with various tax benefits of them being the interest component of the EMI of the particular financial year is deductible form a person’s taxable income up to Rs 2 Lacs. The principal element of EMI is also deductible under Section 80(C) of the Income Tax Act.
3. CLSS Benefit:
To promote the PMAY, the Ministry of Housing and Poverty Alleviation has introduced the CLSS, which is an interest subsidy scheme. The scheme is targeted towards the Economic Weaker Section, Middle and Lower Income Group. The scheme is valid on a loan of Rs 6 lacs and above where the minimum subsidy is Rs 2.67 lacs. The only restriction is that you or your spouse must not own any other property in the country. Only one unit per family is allowed, and you must not have availed the PMAY facility before.
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