Why invest in real estate at a young age?
It’s never too late to begin investing and planning for the future, but the sooner the better.
One main advantage to investing when you are young is you will be able to make a substantial amount of money over long term by taking advantage of the monthly cash flow and excellent appreciation in asset value because the property value is based on rents increasing and not just property values.
It’s great to dream about the riches you can make from real estate no matter how young or old you are, but it’s critical to enter into the right property investment.
Most of all, you need to enjoy the ride of real estate investing and not be afraid to take the opportunity because it truly is a great experience.
We educate and help the millenials, the generation next and every other individual to invest in the right kind of real estate investment that generates tremendous wealth.
Whether you got your first job or just started working, qualified working professional, an entrepreneur, businessman, high net worth(HNI)/ wealthy individual, we have an investment that suits every investor.
We also help you build a powerful real estate portfolio with a unique & diversified mix of our top asset categories.
Investors can build a portfolio with just 50 lakhs with a combination of unique assets that gives a consistent cash-flow in terms of monthly rental income and also multiply the investment using our unique short term investment strategy that will yield 30-60% in 2-3 years time.
Simple reasons why investing income producing real estate is an excellent choice for protecting and growing your wealth:
1.Dependable Income Stream/ monthly positive cash-flow
One of the biggest benefits to income producing Real Estate Investments is that the assets are generally secured by long term leases which provide a regular and dependable income stream that should produce positive cash flow higher than any other investments.
2.Multiply Asset Value through Leverage
Another important characteristic of income generating real estate investing is the ability to place debt/loan on the asset which is several times the original value of the asset. This allows you to buy more assets with less money and significantly multiply asset value.
3.Debt Reduced by Property Income
The debt on the property will be reduced by the rental income of the property’s net operating income, NOI. NOI(Net Operating Income) is the gross income less all expenses before loan interest/EMI. The NOI will sufficiently fund the loan interest/EMI payments thereby reducing the debt balance and creating equity.
4.Inflation Hedge
Real estate investments have historically shown the highest correlation to inflation when compared to other asset classes .
Generally speaking, when inflation occurs, the price of real estate, particularly multi-tenant assets will also rise.
5.Physical Asset
Income-producing real estate is one of the few investment classes that as a hard asset has meaningful value. The property’s land has value, as does the structure itself and the income it produces has value to future investors. Income producing real estate investments do not have red and green days as does the stock market.
6.Tax Benefits
This asset gives you multiple tax benefits that no other form of investment in India can provide, such as :
Under Section 24 : 30% of entire rental income from this asset + entire interest paid on home loan can be deducted from your taxable income.
Section 80C : Upto Rs.1,50,000 per annum can be deducted from your taxable income for principal repayment on your home loan.
7.Pride of Ownership
Properties located in the hottest IT, Commercial, Spiritual & Tourist Destinations of India. The right property in the right location with right tenants and right ownership mindset can produce a tremendous pride of ownership factor that is highest among all asset classes
8.Appreciation of Asset Value
Income producing Real Estate Investments have historically provided excellent appreciation in value that meet and exceed other investment types. Properties historically increase in value as the net operating income of the property improves through rent increases and more effective management of the asset.
9. Indestructible Wealth:
Income producing Real Estate produces passive income for life.
It is an imperishable asset, ever increasing in value.
It is the most solid security that human ingenuity had devised.
It is the basis of all security and the only indestructible security.
Rich and ultra wealthy invest in real estate directly. They own multiple residential or commercial properties. Steady capital appreciation of their real estate property is common.
But what makes the property investment so attractive is its capability of generating stable short term income. The short term income is generated in form of “monthly rents“.
The rate at which the rental income grows, generally beats inflation in long term. This is specially true for Metro, Tier1, and Tier 2 Cities. As the monthly yield of property grows, this also pushes the overall property price up.
This dual effect (of assured rent and value growth) makes the real estate sector generate unparalleled returns, unlike any other asset.
How do you start investing in Real Estate?
Many a times, the biggest challenge in real estate investments is not knowing where and how to start. You may have an abundance of funds and a keen desire to start and build a real estate portfolio, but if you don’t have the right knowledge and start at the right place and in the right way, chances are you’ll end up with a bad or unprofitable investment. One must have a long term strategy to invest in real estate.
We have listed a series of steps below which will brief you on how you can start off on your journey of wealth creation in real estate:
1) PURPOSE of Investment : The first question you need to ask yourself is whether the investment is for self-occupation for you and your family or is it a pure investment for capital gains?
2) LOCATION of Investment : The second step is to decide on which city you want to invest in. This may depend on your purpose of investment because if you are looking for a property for self occupation, the LOCATION becomes very important and specific. On the other hand if it is a pure investment decision, then you have a number of options to choose from as opportunities for growth are spread across multiple locations.
3) BUDGET & TENURE of Investment : Once you have figured out your purpose and location, the next logical step would be to decide on how much you can invest and how long can you stay invested. This would also mean working out the amount of time that you would need to bring in the entire budgeted capital (which could range from a few weeks to a few years). The longer you can stay invested, the higher returns you will make and vice versa.
4) LEVERAGING DEBT : As we always say, the smartest way to create wealth is by leveraging the power of DEBT. By leveraging your salary slip / business financial credentials, you can enjoy appreciation on somebody else’s money! For example, a person with investable funds of Rs.50 lakhs, can actually purchase properties worth Rs.2.5 crores by taking a home loan. This way you will enjoy appreciation on property worth Rs.2.5 crores whereas your investment is just Rs.50 lakhs.
By the time you are done going through each of the above points in the given order, you will have a basic overview or understanding of
- HOW MUCH of your own capital you have to bring in.
- Time span over which this money has to be brought in (generally 2 to 4 months if it is pre-launch property).
- How long you will have to stay invested.
- The average percentage of returns that you can expect.
Once you put down all the above on paper, you will have a concrete investment strategy based on which you can start short-listing properties that meet or suit your investment criteria and strategy as above
