Investment in real estate comes always comes with its own pros and cons. Unlike yesteryears, there are diversified investment opportunities available for today’s investors. The most common forms of investment options available are bank deposits, postal deposits, mutual funds & ULIPS, stocks, real estate & gold.
However, for people looking at genuine investment options, real estate is a safe bet considering the fact that it is regarded as a long term investment option. Compared to bank deposits or mutual funds which have a normal lock-in period of generally upto five years, investment in property stays for a period of 15 to 20 years.
In mutual funds or stocks, one needs to continuously keep a track of how the fund is performing. At the same time, these funds are critically sensitive to the performance of the stock market. So is the scenario with ULIPs or ELSS.
However real estate investments do not come with these downsides. Investment in real estate works in an uncomplicated way. Let us get to the process of how a real estate investment works; An investor can either pay a lump-sum or make stage-wise payments and once the property is ready for occupation, it is handed over to the customer. He can fund the property through a loan or through his own liquidity. He can utilize this property either as his own dwelling or put it up for rent or sell it when the markets are doing exceptionally well.
Unlike mutual funds or ULIPS, one need not keep a track of the amount that is invested. Renting out the property means that the owner gets a return on investment on a monthly basis.
The best time to invest in real estate is when there are more supply and less demand. That’s when you can bargain a great deal. These are testing times for the Indian economy with reduced consumption due to recession. India’s current GDP will grow at the rate of 6-6.5 percent in the next fiscal year 2020-2021 which is an encouraging sign for the economy.
One needs to follow an optimistic approach when it comes to investment in property and also needs to patiently wait if he is looking to multiply his investment. Thus it can be justified that real estate is a far better investment option than stocks.
--- PRASHANT NAIK ---
