Is buying a house a good investment?
We are often told that ‘buying a house is a good investment’. After all, our house is where we will live and spend our lives for the foreseeable future, so we must be careful about every aspect of our home. But while it seems to be common knowledge that buying a house is a ‘good investment’, is it actually true? Does buying a house actually make good investment sense? Read on to find out!
A house is a home
The idea that your house can be an investment comes from the fact that, historically, real estate prices have risen and appreciated. However, more than being an investment for the future, there is the simple fact that your house serves a more important function—i.e., a place where you and your family live. Since your house is your personal residence, you have less control over its purchase and sale—you buy the house when you and your family need it for living purposes, and when you do not need it anymore, whether due to the fact that your requirements have outgrown the house, or due to adverse financial circumstances. Along with this, while it is true that houses tend to increase in value, as a homeowner you can only tap into its investment potential if you are planning on moving and selling the house.
Owning a home can entail many hidden costs which are recurring and come out of your pocket—property taxes, insurance, maintenance costs. Over time, while your home may increase in value, it may not appreciate enough to offset all these costs. Therefore, many financial & property experts advise investing in a house/property only if you are financially stable enough to do so. If not, investments such as stocks and bonds are more likely to grow in value, leaving you with more money in the long-term.
Investing in houses to rent
However, if you are only buying a house as an investment and not to live in, there are several factors you need to take into consideration. Make sure that you have done adequate research on a variety of variables, such as price, location, infrastructure of the area, and property price trends. Also remember that buying a house does not always lead to the financial appreciation and returns you may be expecting if not bought and sold at the right time. Also, if you want to buy a house to let or rent, make sure you weigh the total cost of the investment before agreeing to buy. This cost will include loan repayments, taxes, registration, brokerage, furnishing, repairs, and others over the period of your ownership.
The pandemic and the housing market
The COVID-19 pandemic has shaken up the property market in India, and experts suggest that now is the time to invest in property and buy your dream home. Real estate has gained traction as a stable asset in the eyes of investors due to the volatility and unpredictability of the stock market. Housing units are also currently available at reasonable prices, and realtors and buyers are making offers and deals to buyers that are not usually seen outside of festive seasons. Along with this, lower interest rates on home loans have added to the lucrativeness of buying a home during the pandemic. However, one still needs to be careful before purchasing, as it may not be an optimal time to buy property for investment with a goal of capital appreciation, unless one has a really generous investment horizon.
Thus, investing in real estate can be complex, expensive, and take some time to generate returns, but it is overall a great investment option. It can generate ongoing passive income and is seen as a good long-term investment if its value increases over time, and can be a part of a larger strategy to build an investment portfolio and build personal wealth. It can be an expensive exercise, so experts and seasoned investors suggest that you start small to get your feet wet before investing in larger, riskier properties.
When you invest in Lansum properties, you’re not just investing in a house—you’re investing in a home, great location, and a community. Our transparent practices, customer-centric approach, and clear titles will always ensure an incremental value for your investment, making sure that you get the returns you invest in our project. So contact us today for a quote, and experience the joy of housing with Lansum Properties!
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