Asset Guidelines: Real Estate – There is no denying the fact that real estate has created a sense of insecurity in the minds of investors over the years. However, that reluctance was short-lived and the industry is looking at a full recovery. Even so, owning one is still beyond the reach of the average person. Suren Goyal, partner, RPS Group, shares his knowledge about ready-to-move-in vs. under-construction properties in terms of return on investment. “Since 2022 will be a pivotal year for the sustainable recovery of the housing sector, investing in a property under construction will bring some excellent returns in the long run,” Suren Goyal suggested, citing a number of reasons.
Low input cost
“As the real estate sector seeks to stand on its own two feet, real estate developers are coming up with attractive offers and greater benefits to attract home buyers. Since projects under construction take time to complete, an investor can book a property with only 5-10 percent of the actual cost and the rest can be paid in phases or according to the developer’s deferred payment plan. Thus, the input cost is a fraction of the amount used in the acquisition of a ready-to-move-in housing unit. In 2022, developers are more than willing to invite investors, so investors must consider ownership of the property under construction, ”Goyal added.
Affordable interest rates
“As the economy recovers from an unprecedented epidemic, credit disbursements are accelerating and interest rates on home loans are at an all-time low. Nationalized banks are offering home loans at 6.50-10 per cent, while non-banking finance companies (NBFCs) are offering home loans at 6.90 to 12 per cent. This makes it a good time for investors to take advantage of lower interest rates and invest in properties under construction. In addition, the home loan can be synced with the developers’ payment plan so that the installment is released once the construction phase is completed, ”he said.
High return potential
“As the economy recovers from a difficult challenge, the pace of growth over the next decade will be remarkable. According to Moody’s, the Indian economy is expected to grow at 9.1 percent next year. This forecast shows the potential of the Indian economy. When real estate investors consider a property under construction, the rate of return on a 7-10 year time scale would be excellent. In addition to the residential segment, commercial real estate investment is also on the rise. If renting is the sole purpose of the investment, you may want to consider a commercial property under construction, ”he added.
“To attract potential home buyers, reputed real estate developers are offering attractive discounts, free furniture, low booking amount, stamp duty rebate, late payment plan (often associated with construction), group discounts and free clubs for a certain period of time. . Developers are doing this to attract serious buyers and encourage them to consider the project from a long-term investment perspective. Investors who want to earn a rental income after a few years can start with an initial investment and once completed, the investment can be a workhorse. Ultimately, 2022 provides a unique opportunity for real estate investors to invest in a property under construction because the initial investment costs are low, and there are many options to choose from. However, factors such as location, developer reputation, RERA registration and connectivity must be kept in mind before investing in a property under construction, ”he concluded.
(Disclaimer: The opinions / suggestions / suggestions published here in this article are by investment experts only. Zee Business advises its readers to consult their investment advisors before making any financial decisions.)