When you start investing in real estate, there are many questions that may arise. How to select the kind of property to invest in? Are residential real estate investments more lucrative than commercial real estate? Investors need to have the appropriate knowledge of the real estate market to make an informed decision about where to invest their hard-earned capital.
It is important to note that commercial and residential real estate investments can prove favourable and assure good returns depending on your economic situation. The cash flow you desire, your financial goals, consistency of income, and your investing timeline, are all factors that need to be assessed.
If you are considering investing in residential real estate, here is everything you need to know!
Residential Real Estate Investments: Pros
Tangible Asset
One of the major advantages of residential real estate investments is that this asset class has a set economic value that will only increase with time. Its price wouldn’t fluctuate like other investments. Residential real estate investment offers security for eternity as it has no unconquerable financial restrictions and can generate several revenue sources.
Home Loan Tax Benefits
With residential real estate investments come multiple tax benefits. Several expenses associated with owning and maintaining a rental property are tax-deductible. These deductions in residential real estate investments can help you balance your budget and pay less in taxes overall.
In addition, the government also offers tax breaks for mortgage interest, insurance, maintenance, repair expenses, and depreciation, which means that real estate investors profit from lower tax rates on long-term investments. Property costs necessary to own, run, and manage the property are also easily deductible with home loan tax benefits.
Inflation Hedge
With the increased costs of products and services, inflation has become a worldwide phenomenon in recent times. With the cost of living increasing yearly, residential property investments are becoming more appealing to investors.
Residential real estate investments act as natural protection against inflation. As prices increase and the rupee’s buying power declines, the cash flow you receive from the property increases. And as property prices increase in the market, rents inevitably rise.
Residential real estate investments: Cons
Management and Risks
With unprecedented changes in the market demand, residential real estate investments can have more potential risks as they usually have an unstable cash flow. Residential real estate investments also come with much more work in maintaining the property and dealing with the tenants.
Limited Liquidity
Another factor that holds investors back from making residential real estate investments is that it is only profitable in the long term. So, if you want to generate cash quickly, real estate investments, whether residential or commercial, may not be suitable for you.
Want to Invest in Residential Real Estate? Here’s Where to Look For
Now that you know about residential real estate investments, you must have realised that the advantages outweigh the disadvantages. Investing in residential real estate is a great way to ensure substantial long-term gains, and what better time to start earning a passive income than now?
Getting in touch with a leading real estate developer like Ashton Gray can benefit your investing journey. This real-estate provider has a team of solution-driven professionals with the knowledge and experience in managing real estate development projects end-to-end.
When you invest with Ashton Gray, you will be assured of 15-20% annualised returns and consistent monthly or quarterly income like the 450+ active investors they have today. If you are ready to bring diversification to your portfolio, visit their website today!
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