Purchasing a house is more than an investment in the Indian context. It is a sense of arrival, stability, independence, aspiration and often a lifelong dream. Infact, often we see instances when the dream is passed on to the next generation and eventually it becomes this collective emotion of the whole family to have a place they can call their own.
We should also note that there is a shift of focus in the mindset of youngsters towards money from mindless money making to a more conscious approach that is need and goal oriented. Millennials are not only eager to find that stability earlier, but also do it so that they have the flexibility to concentrate on more personally rewarding pursuits in their thirties and forties. The credit market opening up and real estate boom in the Tier 1 and Tier 2 cities in the last decade has further made the situation conducive for youngsters to invest in property. Apart from the obvious benefit of peace of mind and security there are several reasons why purchasing a house at a young age can be financially beneficial.
With more stringent taxation laws and the authorities tightening up on individual and corporate taxes, an average working professional loses 20% of his income on taxes and deductions.. Taking a home loan to purchase a property enables one to claim tax exemptions under both Section 80C and 80EE of the Income Tax Act. The best part is that this can be claimed throughout the tenure of the loan upto 15, 20 or 25 years a sthe case may be.
Larger principal / Longer term
Taking a home loan when young means you have more years of income generation ahead of you. This can translate to receiving larger principal amounts in loans or a longer loan term at low EMIs. There is also the concept of ‘step-up’ EMIs that allows a borrower to gradually pay larger EMIs in the later years based on their future earnings. Youngsters in stable jobs with a predictable career curve can opt for this.
It is common in Indian families for the children to stay with their parents until they get married and in some cases even afterwards. This is the perfect opportunity to use the asset for an additional income. The scope for monetisation from a house these days goes beyond simply renting it out. With Air bnb and other service apartment aggregators coming into the foray, the opportunities for letting out are also far more flexible.
Low risk asset
Houses are a popular option of investment due to its low risk nature. Given the constant increase in the cost of land, labour and materials, a housing property almost never depreciates in value. The key is to choose a reliable builder and a location that can be relevant in the economic environment of the city for about 10 years to come.
Future financial planning
Investing in a house early allows us to maximise the benefits of compounding. Compounding is the term referred to taking the returns from an existing investment and using it to boost the same investment to reap multifold returns. In the case of the house, investing early in a property gives us the flexibility to invest in a bigger place or another asset years later with lesser financial strain. This can be achieved using the rental income, sale of property years later or even using it as a security for a future loan.
To make the house a valuable investment, the builder and location of the project is a vital decision. Eden Park at Siruseri brings together the best in expertise and location. Ideally located amidst the IT / Corporate hub with amenities to suit the young professional, Eden Park, Siruseri makes the asset commercially viable and easier to reap benefits.