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Why You Need to Invest in Real Estate Sector

The real estate sector in India is booming. Both residential and commercial properties are being built at an astonishingly rapid pace. The government has made rules favorable for NRI’s and foreign entities to invest in the Indian real estate sector. Bucking the worldwide trend, the real estate market in India is on the upswing. We look at reasons why you should invest in real estate.

Booming Indian economy

As India’s population and the economy grow there is rising demand for housing as well as commercial real estate. The returns are particularly high in leasing commercial spaces like commercial projects, office space and commercial retail shops.

Diversifies your investment

If you have not yet invested in real estate do so right away. It is a different type of investment as well as diversifies your investment portfolio. By investing in multiple properties, you acquire an asset bank as well as ramp up net worth.

Low risk investment

Unlike stock market where you can lose money quickly real estate is considered a relatively safe and stable investment.

Hedge against inflation

Inflation is a major factor today which is capable of eroding your profits. When you have a residential and commercial property, you earn rental income as well as experience an appreciation of the property value. No other type of investment tackles inflation the way real estate does.

Earn more in the future

Owners of real estate can hike rates whenever the lease term expires or lease is renewed.

Value improbability

Unlike other assets, you can increase the value of your real estate property. By renovating the property for instance by painting the walls or constructing the interiors you can ramp up the value of your property.

Avail of income tax benefits

Just like regular Indian residents NRIs are entitled to tax deduction on home loans for principal payment as well as interest component. For the purpose of repairs and maintenance work of their residential and commercial properties NRIs get a deduction of 30%. NRIs are also entitled to tax deduction on the actual payment of house tax.

It is recommended that NRIs familiarize themselves with both the Foreign Exchange Management Act and the Income-tax Act before investing in any property. NRIs can now acquire both residential and commercial properties and commercial space with the exception of agricultural properties and farm houses.

Now the government has bought down the minimum mandatory size for FDI in real estate industry from one hundred acres to 25 acres. This is a major incentive for foreign investors to invest in the Indian real estate industry.