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Property: An investment which sells itself and is yours to keep!!

Land acquisition has been the ideal of success since ancient times, be it the times of Ashoka The Great, the Mughal Empire, explorers and colonizers who answered to the Queen, the World Wars. Then came a time when a collaboration of nations decided it uncivilized and detrimental to peace endeavors to occupy any land, not part of one’s political territory.

 

Now, in this globalized world, looking beyond acres and hectares of mere land, the civilized liberal world based on a capitalist economy, offers land, not as an investment for which one fights and wins, but earns by making smart business decisions. What real estate today has to offer is more than buildings, but a living style and a profitable asset.

 

Manish Sinha from Favista Real Estate has been familiar with enough scepticism in the minds of educated and qualified professionals, who are quite accustomed to live on rental accommodations in cities wherever their jobs take them with respect to property purchases. Often people  fail to be perceptible about the future.

 

At face value, property investments seem risky and a tad expensive, for at the time of purchase, the rental returns as well as the investment in housing loans seem to put an investor at a loss of, lets say, 5 to 6 per cent annually . However, what one fails to comprehend is that if the property purchased appreciates annually by 10 to 20 percent every year. This makes it about 75 per cent appreciation over four years!!! This is because as the property appreciates, a steady appreciation, in rental value is also likely to happen. This value will increase each year too. When this happens, an investor doesn’t have to pay from one’s own pocket but from the rental returns of the property. Given this scenario, a property purchase can be equated to an exchange of money from the bank to the developer and from the tenant to the bank. And in this process, a smart investor will also be able to possess an immovable asset economically, cleverly, legally and fairly. There is no need for ashwamedha yagyas, colonization or barbarity, the world history engaged in.

 

This asset can also be extremely valuable to get tax benefits as well as education loans for your kids. Moreover, it can be a safety blanket, should such a situation arises, that one has to sell, as opposed to one’s wants. Even then, if an investor puts his money in just the right project at the right time, then again, the smart investor can make an immense profit.

 

This is the rationale for why in an appreciating market scenario, buying property makes for a great investments, even though initially rentals returns do not pay for the loan EMI.

 

 

The next question is: When is it the right time to buy? To find out, wait for Favista’s next blog addressing this particular topic.

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