Benefits of real estate as short term investment

Benefits of real estate as short term investment

In times where the market is facing volatile conditions, with stocks market often closing at a tip and interest rates recording at low, people are looking to park their money in short term investment rather taking in risks with long-term investment. Amidst the prevailing risks and chances with regards to options such as mutual funds, real estate market had turned out to be lucrative for many.

With the Reserve Bank of India reducing its benchmark interest rate by a higher-than-expected 50 basis points to a four-year low, the step has further encouraged the new home buyers to avail home loans at a much lower interest rate. Although, the banks have been slow in passing on the benefit to the home buyers, they have still deducted their home rates by 30 to 35 basis point.

Despite the advantages, many perceive the positives to be a temporary scenario and hence advice investing in other options as well, apart from real estate. However, another segment believes real estate to be one of the best option when it comes to short term investment option. Some of the benefits with short investment with real estate are:

It isn’t so risky: When compared to intangible nature of investments such as stocks and bonds, real estate provides much more assurance, as the prices of the sector do not get affected by daily media news. Besides, investing in real estate further secure an asset, which eventually tends to provide regular income stream, especially in case commercial space.

In proportion with the inflation: Undoubtedly, inflation in on the constant rise. As per the experts, real estate prices are directly proportional with the inflation. Therefore, with every rise in inflation, your real estate prices are set to surge. Therefore, with an investment today in real estate, the value of asset is set to appreciate in couple of years.

Maximising the benefit:real investment becomes one of the best way to leverage the tax benefit provided by the government. There are several tax benefits such as the ability to recover the cost of income-producing property through depreciation, road to earn benefit from personal residence exemption, deduction for mortgage interest and likewise.

Proud ownership: Buying a real estate would only be an investment but would also make you the owner of the property, thereby inducing a sense of pride in you. Being the owner of the property, you would not only have asset but also have a complete control over it, which you cannot have in case of investments like stocks and bonds.

It can be inherited: Real estate can be a good investment in terms of passing to the next generation. While a short term investment can assure you several benefits, a long term possession of the asset can also guarantee some financial support to your next generation as well.