by FranchWhy its important for Millennials to invest in real estate
This post is for millennials and why they should invest in real estate!
Who are millennials?
Anyone born between the year 1980 and the year 2000 is called a millennial (give or take a few years). India has more than more than 65% population below the age of 35. In 2020, the average age of an Indian was just 29 years, compared to 37 for china and 48 for japan. So it is safe to say that India has a high number with millennials compared to the rest of the world!
Now – why should a Millennial invest in real estate? There are many advantages of investing in real estate – especially for young adults!
1. Passive Rental Income
Passive income is the money you earn while you sleep. Quite literally! There are several forms of passive income and one of them is rental income. Buying and subsequently renting a property is a great way to start owning assets. Purchasing property is a clever way to generate passive income while saving time and effort. One of the most common method that the top 1% follow is to take out a loan on a property and rent it out! Thereby the rent automatically pays for the monthly interest.
2. Home loans and tax benefits
Home loans are one of the most common ways to own your dream home. As millennials are in their twenties and thirties, they have fewer financial obligations in life, which implies that it is easier for them to get a home loan this is primarily because they have greater scope in terms of income growth as compared to other age groups. Hence, it is ideal to make your real estate dreams a reality at a young age. Also ,taking out a loan to buy your first house can also help you get substantial tax benefits under sections 80C and 24A. Investing in real estate at an early age gives you the opportunity to enjoy a wide range of tax benefits. Availing a home loan to fund your dream home can help you get tax rebates in your yearly income tax returns. The interest that you pay against your EMI can be easily deducted from your total tax amount. As per the section 80C of the income tax act, an individual can avail tax benefits for the principal amount of the home loan. This scheme enables home buyers to claim up to Rs.1.5 lakhs as tax deductions. Millennial home buyers can enjoy the twin benefits of enjoying tax benefits along with ensuring abundance of savings for the future.
3. Appreciation
The biggest reason to invest in real estate is that its value increases over time. It is always going to be an appreciating asset. A residential property typically appreciates between 10-20% annually depending on location and the economic condition, inflation and market demand. By investing in property at a young age, you will ensure a longer time to witness the appreciation rates. Longer the time of investment, greater will be the value of your property.
4. Early Retirement
Real estate investment at a young age is ideal as it offers more financial security than other forms of investment like mutual funds or gold. Investing in real estate can be a great way to secure your future and have the luxury of retiring early whilst sheltering yourselves from unpredictable situations. Many obstacles in life often slow people down in their financial growth. Thus, making a long-term investment such as buying a house, a way to ensure you can reach your long-term financial goals despite unforeseen setbacks. The chances of reaping huge financial benefits at an early age is high when you make a wise real estate investment. Key word being – “wise”.
Buyers must take into consideration various factors while choosing a property such as location, reputation of the builder, social infrastructure and amenities that are being provided.
5. It’s better than renting
Wouldn’t you want to come home to a place that was actually yours? Imagine renting out an apartment for 5 years and at the end of it the apartment would still belong to your landlord and you’ll have nothing to call your own. On the other hand, if you spent that money in purchasing the apartment or repaying a home loan every month instead of paying the rent, then you can sleep easy knowing that you will have an asset in your hands after 5 years. Whether you’ll live in that property or turn it into a rental, the important part is it’s yours and it will appreciate in value every year!
