Property is one of the best ways to invest in India. It’s a great option for people who don’t have much money, as well as for those who want to make passive income. There are many different types of property investments, so it’s important to know what you’re looking for.
Although it can be intimidating at first, the process isn’t too complicated. Here are some tips and tricks for beginners looking to get started investing in property in India.
Section 1: What is property investment?
Property investment, in simple terms, is renting or selling property. If you own property, it’s called renting. If you’re renting property, it’s called buying.
What’s the difference?
The most obvious difference between buying and renting property is how much you’re spending.
Buying a property is the best way to make money on the property. You need to purchase the house or apartment you’re renting before renting it out, and it must be a place that you or your family will live in.
Renting a property is the least profitable way to make money on a property. You just need to rent the property, and you can’t make any money off it.
However, if you’re an investor, the risk is pretty low.
As long as you don’t live in the property, it will be profitable to rent it out.
Why invest in property?
Property is a great way to earn passive income, especially if you have a part-time job. Properties can be sold when they are old and dilapidated, so you can get cash out on any loss. There are also opportunities to rent out properties.
There are also many different types of properties to invest in, including residential houses, apartments, land, and industrial or commercial properties. All of these are different, but all allow you to make money, so investing in property could be a good option for you.
How to buy property
When you’re looking for an investment property, there are two main ways you can go about it.
Get a loan
If you’re looking to invest in property, you’ll need money to put down as a deposit.
What are the benefits of property investment?
Property investments can help you meet several goals, including:
Paying off debt
Build an emergency fund
Lower your taxes
Save for retirement
Investing in property is also a good option for those who are looking to expand their portfolio. Depending on your income, you could get returns of between 6-18% annually.
It’s also a great way to buy your first home in India. While there are plenty of modern developments in the capital, Mumbai is still a very affordable place to live. Houses can be bought for just a few million rupees, which is far less than the cost of a home in many other cities in India. Property prices are also much cheaper than in other countries, even in big metropolises like Bangalore and Delhi.
What type of property should you invest in?
Land: Since land is the basic asset that all properties are built on, it’s a good place to start. You can acquire agricultural land by paying someone else to take it from you, or by building your own farm.
Structures: You can rent or buy a house or apartment. It all depends on your budget, as well as the person you plan on buying it from. It could be bought outright, or you can lease it to a company. Many buildings in India are government-owned, so a government license is needed to rent or buy it.
Loans or Loans?
Loans are a great way to finance a property, especially for those who need a certain amount of money upfront. However, they’re a huge risk. You’re essentially lending money to someone else for a fixed amount of time.
What’s the process for investing in property?
You’ll have to be a real estate agent and pay an entry fee (this varies between states and cities). Your fees will be used to finance or buy the property and invest your profits. You will need to be aware that there are many types of property in India, and each has different requirements and costs.
One of the most common types of property to invest in India is a freehold property – this means it is fully yours, you can build whatever you like on the land, and are the owner of the property. However, you do not have a title or a lease, so you need to ensure that your agent deals with contracts and law in advance.
Choosing a location
After you decide what you want to invest in, the next step is choosing the best location. This includes both residential and commercial property. And although investing in commercial property could be a good option for long-term investment, residential real estate offers a lot more flexibility. This means you can invest and rent out multiple properties in the same area, as well as build up equity over time.
Prefer residential real estate over commercial property? Read on to learn how to save on your mortgage.
Understanding land and tax
The nature of land can affect your future income, and how much tax you pay. This is because you’ll be able to sell the land to someone else, meaning you could make an income that exceeds the taxes you pay.
Choosing an agent
Start by speaking to different agents. Make sure they have a good reputation and that they are very friendly and approachable. Ask about the number of properties they’ve sold, and check out testimonials.
Remember to be selective, and only select agents that you feel comfortable with. It’s vital that you speak to them personally and not via a business number. Only choose agents with who you’re 100% comfortable.
You should also ask them about the property you’re interested in, and find out as much as possible about the rental market.
It’s important to pay close attention to your agent’s commission. Make sure you’re not paying too much or you’ll get ripped off. Always negotiate for a good deal.
Real estate investment is one of the most popular investment options in India, with well over 100 million Indians investing in it. However, when you’re in the market to buy property, getting the perfect deal is key. For example, you may want to purchase a villa with a pool in Delhi and will need to spend around Rs.8-9 crore for it. However, you also need to pay a rent of Rs.6 lakh per month to the villa’s owner. That is where the tough decision of taking a loan comes into play.
You will need to secure funds from multiple sources, and the process of securing such funds may be intimidating for new investors. First, you need to determine which type of loan you are looking for. For example, if you are only looking for a secured property loan, you should check out Finsec.
Finding a home for your investment property
It’s important to choose a home that is in a good location, as well as having good storage space. If you have a large investment, you want to make sure you can get around easily as well as have a large home.
Finding a property to invest in is easy if you do a search online. You can easily find out about recent sales, and potential sales for the neighbourhood where you want to buy. Make sure to get the details about the property, like the number of bedrooms and bathrooms.
Take a look at the exterior as well. Make sure the property is kept in good shape, and that all of the trees and bushes are trimmed. If possible, talk to the neighbours.
How will property investing affect your taxes?
It’s important to make sure you fully understand your current tax obligations when investing in property.
According to the Investment Fluctuations In Property In India Report, property in India provides the highest tax returns for residents in the lowest tax bracket. These returns come on top of your income tax and are taxed at a flat rate of 25%.
When compared to the property tax rates in other countries, the taxes in India are exceptionally low.
To calculate your property taxes and income tax liability, you should know how much property you currently own and when you bought it. Take the number of bedrooms and bathrooms you have for example.
Calculating the number of bedrooms and bathrooms you need depends on the property you own.
Property is a great investment option for anyone, whether they are a new investor or someone who is already familiar with the business.
The process for investing in property is pretty straightforward. Many states in India have already made it a bit easier for foreigners to own property there, so it’s an investment option that’s accessible to everyone. It’s the perfect way to enjoy an added income while also owning a piece of the region.
If you want to learn more about how you can easily buy property in India, check out this blog post on how to buy a house in India: How To buy a house in India?