Fight
continues in the world due to the outbreak of COVID-19. To further maintain the
risk from snowballing, the Indian government has indicated to fully affect the
lockdown. As a result, nowadays, most of us are working from home. Outside life
has come to a grinding halt. No matter how uncomfortable it sounds, it is
probably the only way to prevent perennial corona viruses from spreading
further.
Although
our daily routines have been affected, this does not mean that people should
lock themselves inside their homes, stop all their plans and only watch
worrying news on TV about this threat. These are some of the best times when
one can spend time with family, do various hobbies and introspection. The
current situation is an ideal time to think about investing in sources of
passive income. Eventually, some of the best opportunities emerge from a
crisis.
Zoning
on various options can be seen in various options like term plans, stock market
and real estate. While every investment option has its pros and cons, as of
now, when the stock market is recessionary and the banking sector is in a
tailspin, real estate can be a great asset to place bets on. If anyone wants to
do it risk-free yet, makes a commendable return, with many residential and
commercial real estate options available.
Full
of attractive offers: Recognizing this opportunity, developers are coming up
with many attractive offers. Property prices have already corrected in the last
few quarters. After COVID, many developers are offering further discounts and
attractive offers to maintain their financial books. There are projects where
one now needs to pay 5% to book a property. The remaining payments will start
after 60 days. By that time, it is expected that the crisis will mostly end.
However,
such plans are a fleeting event that developers are launching to boost
sentiment. Prices have already come down and once the situation returns to
normal, such attractive schemes will also be lost. Therefore, this may be the
best time to buy real estate. It should not be surprising if one gets
ready-to-use assets for a price equal to a new launch.
Higher yields: Real estate can offer risk-thrilling
competitive returns. Although residential real estate has been stable in recent
years, commercial real estate has been issuing attractive returns. A commercial
property in a prime location can easily give an average annual appreciation of
around 7-10%. At a time when share prices and financial markets are volatile,
such a comeback can be a game-changer.
Concurrent Rental Income: Real estate can provide continuous income in
the form of monthly rent. The rental component always makes real estate a very
unique proposition for investing. A quality commercial property can provide
returns of around 5-8%. Similarly, residential projects can give returns of
around 2-3%. Therefore, this is the right time to capitalize on those
possibilities.
Increased liquidity: This is a good time to invest in real estate
because home loan is going to be cheaper. RBI has recently cut the repo rate by
75 basis points. The rate drop is a welcome move for the industry. In a short
period of time, as a calibrated response to the reduction in repo rates, most
banks will also reduce their home loan rates.
Feasible Hard Asset: The biggest advantage of real estate is that
it is a tangible asset. At a time when there is too much risk investing in
paper money, real estate is a safer and safer asset for betting.
Real
estate is a separate asset class that can ensure appreciable ROI, hedge against
income and provide recurring income in the form of rental yields. However, it
has its drawbacks, as a real estate asset will take at least 2-3 months.
Nevertheless, investment in real estate is always made keeping in mind the
medium to long term perspective. A short-term perspective can be
counter intuitive.
So
in these times of social distinction, do not just shut yourself down. Use
isolation downtime, do some in-depth research, learn about the various sources
of passive income and make the most of this time to make meaningful
investments.
