Raman, a 40 year old software professional wants to build a retirement corpus and build funds for his only daughter’s education and marriage. For this purpose, he has invested in some fixed deposits and post office schemes and also wants to buy a second property worth Rs 60 lakhs as an investment. He wants to use his accumulated savings for the down payment of the second house. Based on his income and expenditure patterns, he could easily get a loan of Rs 48 lakhs from any financial institution.
The Construction industry has witnessed a growth of 2 percent from 2014 to 2015. The India Brand Equity Foundation [IBEF] has predicted the Indian real estate market to touch US$ 180 billion by 2020.
Property can generally be classified into two separate categories: residential property and commercial property. A residential property can be bought to let out with the rental income acting as the basis for an income stream to the investor.
Likewise a commercial property (an office, factory, warehouse etc.) can be bought and owned in the same way, with the rental being paid by the tenant (the business that rents/leases the property) being collected as an income.
Which is a better investment in property: Buying land or buying a residential house?
This is a very broad question!
Firstly investing in property “for investment purpose” should be considered diligently. Property growth as an asset class has been stagnant for the last 3 years especially in Bangalore.
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