Introduction
From time immemorial, owning lands or properties was the symbol of wealth and most of the wars fought during the ancient or medieval times were for acquiring more dynasties and the land associated with them. Even in modern times, every country is worried about safeguarding their borders, which primarily means that they want their land to be safe from invasions.
If you own real estate in any major city in India like Delhi, Mumbai, Kolkata, Chennai, Bengaluru, or Hyderabad, in the last two decades the price of your property would have appreciated manifolds. Cities like Pune and Mysore too are becoming popular investment hubs as IT companies and other corporates are opening offices there. Infosys has a huge 300+ acre training and delivery center in Mysore and Mysore real estate has picked up in the last few years.
Since 2020, the global pandemic forced the employees to work from home and many have vacated their rented apartments in the cities and have gone back to their respective hometowns. There was a sizable population from Mysore working in Bangalore who chose to go back to their native during the testing times. Hence investment in Mysore in the real estate sector has picked up as many IT professionals bought properties during the pandemic when the prices were lower than the regular market rates.
The Pros of Investing in Real Estate
- Stable returns – If you invest in real estate when you sell it off after a couple of years, there will be guaranteed returns. It depends on the area, and how the property prices have appreciated there, however, it can be stated confidently that the seller will receive stable returns.
- Guaranteed Appreciation – Real estate almost always appreciates. Except for situations like the global recession (like the one which happened between 2008-2010 primarily in the U.S and European countries) the real estate investor will receive the appreciated value when he/she tries to sell the property.
- Less volatile than the stock market – Stock market sentiments keep changing regularly and many times people incur huge losses if they have invested large sums there. For example, the current war between Russia and Ukraine made the stock market in many countries across the globe crash even though they were not participating in the war. Real estate prices do not fluctuate that frequently and show a gradual upward trend.
- Generate rental income – Warren Buffet always stated, ‘’never depend on one source of income’’ and smart investors always buy a few extra properties and garner rental income from them. It is a safe passive income and they can always sell the property when the prices are really good.
- Diversification – If you want to diversify your portfolio, investing in real estate is a great option. Along with low-risk options like fixed deposits and PPF (Public provident fund) etc. you can have mid-risk elements like mutual funds and investments through SIP (systematic investment plan). You can invest a little in high-risk options like stocks and bonds. A real estate is a safe option and extremely low-risk. The only problem with it is that it cannot be liquidated in a jiffy like FDs, shares or gold, and other precious metals and gemstones.
- Security – Owning properties will give you a sense of security. If you stay in your own home and complete your home loan term, you will feel at peace. Even in situations like job loss, people who stay in their own homes survive much better as they do not have to pay rent every month.
- Easier to understand – To invest in the share market, you often will have to depend on the advice of your stockbroker. However, that is not the case with real estate. Even illiterate people invest in land and secure their money.
- Hedge against inflation – Most of the elders in the family will always advise the youngsters to invest in real estate and gold as they are considered to provide the right kind of hedge against inflation. Statistics show that the property value appreciation in major cities across the globe is much higher than the inflation of that country.
The US house price index has had a 3.3% CAGR since 1991 and the US residential real estate market is poised to grow at a CAGR of 5.77% by 2026. In India, the last few years the real estate sector is growing with a CAGR of 30%, making it a marvelous market for investment.
Conclusion
So do not think too much. During this auspicious time of Akshay Tritiya, Ugadi, and other festivals, invest in real estate. Rai Estates is a trusted name in the field of real estate for the last two decades. Check out their ongoing projects in Mysore, Bangalore, and Mangalore and select the one which suits your budget and requirements. You need not stay in that house. A regular rental income will make you and your family financially more secure.
