This question haunted us for years. Everyone says investing in real estate is a sure shot win situation. Let’s find out the reality.
Everyone has grown up listening to our parent’s talking about the importance of “owning a home”. Thus, this makes us really comfortable while planning for investing in land, apartment or any other property deal. When you invest in real estate, you invest in something palpable. You can look at it, feel it, drive by with your friends, point out the window, and say, “This one is mine”. For some people, that’s important psychologically as it derives a sense of accomplishment.
Moreover, it’s difficult to be conned in real estate compared to any other form of investment if you do your homework because you can physically show up, inspect your property, run a background check and make sure that the building is actually there before you buy it. Taking a loan for investing in real estate is far safer than using debt to buy any other form of investment. Also, Real estate investments have traditionally been a terrific inflation hedge to protect against a loss in purchasing power of the Rupee.
Now let’s look at the flip side of investing in real estate. Compared to any other form of investment, real estate takes a lot of hands-on work. You have to deal with the builders, brokers, government authorities and a whole host of things that you probably never even considered. Even if you have a trusted broker to buy the property from, it’s still going to require occasional supervision.
Not to forget like any other investment, nothing grows overnight, which means you would have to take care of the property for a couple of years before you plan to liquidate your investments. Also, you need to regularly pay for maintenance & taxes for the up-keeping of the property, even if unoccupied.
So all in all, it is not an easy task to invest in property, however, it is a truth “no pain, no gain.” If we look into the real estate trends, it is worth taking the pain. Appreciation of land prices has been phenomenal in the past and the same can be expected for the future.
If you are planning to invest in real estate, all you would require is a smart and trusted broker. A smart and trusted broker would always be well informed about the upcoming plans and projects in the vicinity through different channels. He, in turn, would be in a position to check the authenticity of the deal on your behalf. This would save you from the nightmares of immense paperwork, background checks, etc. Also, your trusted broker can find out a suitable buyer for you in the future.
So to conclude, I would say, investing in real estate is a good option but analyze an appropriate deal before you go for it.