How not to go wrong with real estate investment during a Pandemic?

One of the most common questions every home buyer and investor wonders before buying a real estate property is what they can do to not go wrong with their investments. It is a known fact that real estate can be a great tangible investment option, especially in the long term. During uncertain and turbulent times like an ongoing pandemic, the one place that offers comfort and safety is ‘home’. With job losses and economic upheaval, even paying rental/EMI’s for homes suddenly became a financial burden. With the stock market fluctuations and mutual funds demonstrating notional losses, there is a sudden need for options that offer better returns and real estate investment is a bankable proposition.

Niti Aayog has estimated the Indian real estate sector to cross its current level of $120 billion and reaches $650 billion by 2040. They predict that as real estate is mostly a long-term investment, any cyclical downturn does not impact the investment as much compared to other asset classes.

A recent report by The Reserve Bank of India’s House Price Index tracking suggests home prices in 10 major cities puts the average return from real estate in India in the last 10 years at 11.6% per year. This is a higher return offered by the equity market at 11% as well as Gold offering a return of 8.8 % over a period of 10 years. The RBI has reduced the repo rate to 4%, making borrowing cheaper for many home buyers and investors. Consequently, home loan interest rates with most major banks are as low as 6.95%. This certainly would act as a booster for buyers to invest in real estate at a cost advantage.

Here are a few investment fundamentals and points that suggest why now is a good time to buy real estate in India.

• Real estate prices are subdued which is a good buying opportunity
• Always “buy low, sell high”
• Take advantage of relaxed payment plans on offer as builders look to sell unsold inventory
• Utilise competitive home loan interest rates which are almost at 7%
• Do proper due diligence on under construction properties, check RERA guidelines
• Opting for ready-to-move-in properties is still considered a safer option compared to under construction properties or land acquisition
• Do not let discounts be the sole criteria
• Reputation and track record of builders, brokers and real estate consultants should remain one of the fundamental criteria when making these investments.
• Give importance to amenities over basic facilities offered by developers
• Know the difference between investing in Residential property vs Commercial property

Real estate is one of the best investment options, especially in the long term. The current prices, competitive interest rates, better payment plans, and strong RERA laws, all make property investments a very lucrative option. This could prove to be an ideal opportunity window for buyers to invest.