Ever since the dawn of this century, real estate has been the money-spinner for successful and wealthy investors. Backing residential properties to prosper has proven to be a wise decision in most scenarios. And while the craze to invest in residential property seems to be dying down gradually over the last five years, it is still an investment that can guarantee a profit. Residential projects in Kolkata have seen an upsurge in the recent past.
Advantages of Investing in Residential Property
At this stage, it’s no secret that there are obvious perks and benefits if you invest in a residential property.
For example, the tax deduction is the most in-demand advantage that comes with investment. Rental income is susceptible to taxes, but it comes with a fair amount of potential tax deductions. Mortgage interest, maintenance of the property, and property management fees help reduce the tax on rental incomes.
Another benefit includes the cash flow that takes place when the rent is higher than the property’s cash-carrying cost. Real estate taxes, insurance, and property repairs are some of the aspects of cash-carrying costs.
One of the most important perks of investing in residential properties is the fact that you can always use debt to enhance your chances of purchasing a property if multiple properties are involved in the project. In the case of residential flats in Barasat, this increased investment acts as a sort of reinvestment program. But if you’re a wise investor, do not waste time to sell the property when its stock rises.
Is Residential Property Still a Profitable Source of Income?
In short, the answer to this question is - yes. But to delve deeper into the subject, we must take a look at the recent past when investing in real estate was steadily taking a hit. From 2013 to 2018, the price appreciation of residential property suffered at a meagre 12%. This resulted in a loss for most property owners as their gross 5-year return plunged way below their expectations. The appreciation took a further hit following the demonetization in India and the subsequent implementation of the Goods & Services Tax and Real Estate Act.
But, as the cliche goes, there’s always some light at the end of every tunnel. While it’s true that there are higher chances of losing money than gaining, the options to profit have increased manifold recently. If you invest in residential properties in a well-informed and careful manner, you can guarantee the profit that you yearn for. There needs to be a range of over five years in which you can see more than a 10% return on your investment.
Another reason behind the sudden dampening of the growth rate is the Reserve Bank of India (RBI) not being able to lower the rate that it cuts from the banks. The crisis is affecting homeowners because they aren’t getting clearance from the banks that hold their accounts, the deposit rate is very high. But once this situation - expected to be long-drawn but temporary - fizzles out, the industry may improve again.
In a developing country like India, where there are over 10 million units in demand, the future of the real estate industry does not look bleak at all. There still lies a lot of interest in it, and once the government eases up on the taxes, it’ll start flourishing again. Considering the usual amount of time (around 5-7 years) that real estate investments take to mark significant profit in the return of investment, it wouldn’t be far-reaching to say that investing in residential properties can still be profitable in 2019. Investing in 3 BHK flats in Barasat and other similar townships can surely turn out to be a well-calculated risk!
Advantages of Investing in Residential Property
At this stage, it’s no secret that there are obvious perks and benefits if you invest in a residential property.
For example, the tax deduction is the most in-demand advantage that comes with investment. Rental income is susceptible to taxes, but it comes with a fair amount of potential tax deductions. Mortgage interest, maintenance of the property, and property management fees help reduce the tax on rental incomes.
Another benefit includes the cash flow that takes place when the rent is higher than the property’s cash-carrying cost. Real estate taxes, insurance, and property repairs are some of the aspects of cash-carrying costs.
One of the most important perks of investing in residential properties is the fact that you can always use debt to enhance your chances of purchasing a property if multiple properties are involved in the project. In the case of residential flats in Barasat, this increased investment acts as a sort of reinvestment program. But if you’re a wise investor, do not waste time to sell the property when its stock rises.
Is Residential Property Still a Profitable Source of Income?
In short, the answer to this question is - yes. But to delve deeper into the subject, we must take a look at the recent past when investing in real estate was steadily taking a hit. From 2013 to 2018, the price appreciation of residential property suffered at a meagre 12%. This resulted in a loss for most property owners as their gross 5-year return plunged way below their expectations. The appreciation took a further hit following the demonetization in India and the subsequent implementation of the Goods & Services Tax and Real Estate Act.
But, as the cliche goes, there’s always some light at the end of every tunnel. While it’s true that there are higher chances of losing money than gaining, the options to profit have increased manifold recently. If you invest in residential properties in a well-informed and careful manner, you can guarantee the profit that you yearn for. There needs to be a range of over five years in which you can see more than a 10% return on your investment.
Another reason behind the sudden dampening of the growth rate is the Reserve Bank of India (RBI) not being able to lower the rate that it cuts from the banks. The crisis is affecting homeowners because they aren’t getting clearance from the banks that hold their accounts, the deposit rate is very high. But once this situation - expected to be long-drawn but temporary - fizzles out, the industry may improve again.
In a developing country like India, where there are over 10 million units in demand, the future of the real estate industry does not look bleak at all. There still lies a lot of interest in it, and once the government eases up on the taxes, it’ll start flourishing again. Considering the usual amount of time (around 5-7 years) that real estate investments take to mark significant profit in the return of investment, it wouldn’t be far-reaching to say that investing in residential properties can still be profitable in 2019. Investing in 3 BHK flats in Barasat and other similar townships can surely turn out to be a well-calculated risk!
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