With the recent phenomenal appreciation in capital values of
Real Estate, I have been frequently asked by manya people ‘Is this the right
time to invest in Real Estate? Are these prices going to last? Have I missed
the Bus?’
Well all I can say is Real Estate of any country, state or
region primarily depends upon 2 factors
(1) The Economy
(2) The Population
Fortunately we have both in our favor, no wonder that real
estate prices have appreciated more than 600% in the last 6 years. Besides we
Indians are very emotional. Unlike people in most developed countries, a roof
above our head a Home to call your own means a lot to us. Hence we beg, borrow,
liquidate all our investments, take huge loans on our future earnings and forgo
& compromise with all our comforts and luxuries to buy that house or your ‘DREAM
HOME’ even though we have the option of renting that same house for a fraction
of the cost of that apartment, or to be precise just 3% p.a or 0.25% per month of the capital value of
the apartment. For example a 3 Bedroom apartment approx. size of 2000 sqft
costs anything between 6 -7 crores in Bandra, a residential suburb in Mumbai
and the same apartment is available for approximately Rs. 1.50 lacs rental per
month against the very minimal Bank interest of 9% p.a. A straight saving of 6%
p.a which can be substantial savings and if invested smartly with tax savings
instrument with the correct blend of prudence can help you leverage against
inflation.
So if you are not an overly emotional person and can manage
your finances, opt for a Rental apartment for atleast 2-3 years, leverage your capital
and keep your eyes and ears open for an opportunity to invest in Real Estate,
rest assured opportunities are there for the seekers.
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