REAL ESTATE INVESTMENT BENEFITS

When you invest in real estate, you are buying physical land or property. Some real estate costs you money every month you hold it — think of a vacant parcel of land that you hope to sell to a developer someday but have to come up with cash out-of-pocket for taxes and maintenance. Some real estate is cash generating — think of an apartment building, rental houses, or strip mall where the tenants are sending you checks each month, you pay the expenses and keep the difference as the profit.

Let’s check out some of the Real Estate Investment Benefits-

1. Tax Benefit:

Taxes are one of the biggest expenses for anyone – let alone a real estate investment company. However, there are ways to combat the loss of money in taxes with real estate. Rental houses, apartments, vacant land, commercial buildings, industrial, shopping centers and warehouses all offer their own variation of tax incentives.

2. Cash Flow:

Talking about everyone’s favorite benefit, cash flow is essentially profit. Cash flow is what is left over after you collect the rent and pay your liblities like mortgage, taxes, insurance and other expenses.

3. Hedge Against Inflation:

Inflation is defined as a sustained increase in the general level of prices for goods and services. In other words, it causes every Rupee you own to buy a smaller percentage of a good or service over time. Stocks, for instance, require more money to purchase with the increase of inflation. Essentially, inflation prevents your money from going as far as it would have. Real estate, on the other hand, serves as a hedge against inflation. Unlike almost every other form of investment, real estate reacts proportionately to inflation.

4. Leverage Funds:

When purchasing a property, you have the ability to do so with leverage. It is entirely possible to purchase a Rs.500,000 property with Rs.100,000. You don’t even have to use your own money. Stocks, on the other hand, require 100 percent of the investment up front. Leveraging money also allows you to initiate more than one real estate deal at a time because all of your funds aren’t tied up in one project.

5. Equity & Wealth Building:

In the event you borrow money to complete a real estate deal, you will be required to pay it back with interest. However, each payment also gets you one step closer to paying down your principal payments. You are simultaneously building equity and wealth in the same property.

We at Floorrise give a best fit projects in and around pune, so please if you have any information required, please feel free to get in touch with us.

 

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