Long term and short-term are the two investment options available for investors. The people in the urban city like Chennai prefer long-term investments but people in rural areas prefer short term investment more. When it comes to the long-term investments, the preferred options are Gold, Land, mutual fund, and share market. The residential apartment growth has been an investment option for the past few years, and now people prefer apartments over everything else. The following are the reasons why the residential apartment is a better investment option in Chennai:
#1. MARKET VALUE
The apartment value in Chennai is appreciating every day, and this consistent increase states that it is a solid option in terms of investment. The apartment desire among the people puts it up in demand. It is estimated that apartment value rises 7 to 10 % every year whereas in the land the value would rise to only 5%. Also, experts say that there is no chance of depreciation in the coming years. That makes Chennai a better place to invest in a residential apartment.
Historically it is shown that real estate investments have a higher correlation to inflation when compared with other investment options. We live in a nation where we print money to encourage economic growth. In such a scenario, it is important to know the perks of owning a residential apartment; which has a benefit to inflation. During inflation, the price of the property increases and especially the multi-storey building, whose price increases more in terms of rent as well as the principal amount.
Principle reduction is a benefit in investing in residential apartments. The equity raises each month because of your tenants, as they pay the mortgage on your property through the rents. While the investor is receiving the rent, he can pay out his expenses and the mortgage amount too. With this perk, one can gain equity as well as raise in wealth.
#4. TAX BENEFITS
The residential apartment provides one of the best tax benefit options. GST is exempted for ready to move in residential apartments. According to law, apartment loans can claim tax exemptions on principle as well as on interest. This is one of the desirable options when it comes to the investment point of view. Another benefit in an apartment is that one can sell the property and reinvest the money in another property, but doesn’t need to pay the taxes on the gain. These benefits are not applicable in other investment option like the mutual fund or stocks.
#5. SOURCE OF INCOME
One of the reasons why the investors prefer the residential apartment is due to a steady source of income. When your apartment is in a good location, it provides a steady cash flow every month in the form of rent. Investing in business will fetch you profit but there is a chance for getting a serious loss too. But while investing in an apartment there is an assured income because people need a place to live on and the investor gets the rent.
#6. LOANS & EXPERTS
The bank loan which is being provided for housing or an apartment is cheaper in INDIA with the interest of just 9.25 to 11% which is less; when compared to other loans. For example, the personal loan is being offered with a 15% interest on an average. And so, even when there is a shortage of money it is easier to invest in an apartment.
If one needs to invest in a mutual fund or stock market for a long-term basis, they should consult a paid professional expert to get a conclusion on which share to buy now and which share to buy later. But in the case of investing in a residential apartment one can decide on their own and does not need any advice from paid experts.
#7. SUPPLEMENTARY FAVOURS
The residential apartment price gets a sudden hike whenever there is any infrastructure development in the area which you have brought the apartment in. This includes colleges, international schools, shopping complexes & business centres. Especially when government properties like IT parks and Hospitals are built in that area then the apartment price could get high nearly 25-30%. This positive factor is not available in other investment options as every investment is purely depended on its performance; unlike the residential apartment.
This is a kind of investment which not only benefit the investors but also for their future generations. The investor can live in his residential apartment in Chennai for decades and it can be continued for his next generation too. There is a freedom to sell the apartment by his generations whenever; without any tedious process. Stocks or mutual fund investments might have the options to carry forward the investment term to the investor’s son or daughter. But, not even a single private company or National stock exchange has topped the market for 10 or 15 years in a row. This shows how fragile the investments are in other options, and how durable it is in residential apartments. What do you think makes residential apartments stand out?