Real Estate Investing: A Realistic Look
Real estate is often touted as a great investment, but the reality is more complex than simply buying low and selling high. Several factors significantly impact your potential profit, and it’s crucial to understand them before investing.
Is Real Estate Investment Really Worth It? A Closer Look
**Hidden Costs of Real Estate Investment:**
Capital Gains Tax: Selling within two years means your profit is taxed at your income tax bracket (up to 33.99%). Even after two years, you’ll pay long-term capital gains tax (approximately 10-15% after inflation adjustments).
Home Loan Implications: Selling a property bought with a home loan within five years requires repaying all tax benefits received, significantly impacting your profit.
Interest Costs: A substantial portion of your initial home loan payments is interest, reducing your net profit.
Transaction Costs: Brokerage fees (around 2%), society transfer charges, and other administrative costs further decrease your returns.
Time and Effort: Selling a property can be time-consuming and may involve accepting a lower price for a quicker sale.
Ongoing Expenses: Even if not rented, you’ll face property taxes and maintenance fees.
Low Rental Yields: Rental income may only yield 2-4% return on investment, potentially offset by expenses.
Real Estate vs. Fixed Deposits:
Consider the complexities and costs of real estate against the predictable returns of fixed deposits.
While fixed deposits have tax implications, they offer safer, more assured returns.
Tax Transparency:
The Indian Income Tax Department receives details of all property transactions above ₹35 lakh. Your PAN number is required for registration, ensuring all transactions are easily traceable.
Conclusion:
Real estate investment requires careful consideration of all associated costs and potential risks. Weigh the potential benefits against the complexities and compare it to other investment options before making a decision.
**[Sky Properties: Your Navi Mumbai Real Estate Consultants]**
9987452642
Our advice is unbiased and based on solid research and years of experience in the real estate industry.
[Sky Properties: Real Estate Consultancy in Navi Mumbai – 9987452642]
| SERVICE | CHARGES |
|---|---|
| CIDCO Transfer only | 15,000 |
| Mortgage NOC only | 15,000 |
| CIDCO Transfer + Mortgage NOC | 20,000 |
| Only Drafting/Documentation | 5,000 |
| Drafting and Registration of Sale Agreement/Sale Deed | 10,000 |
| Brokerage (Purchase/Sale transaction) | 2% |
| Brokerage (Rentals) | 1 month rent/year |
| Consultation over Phone/Whatsapp/Zoom/Google Meet | 4,000/30 mins |
| Property Tax Name Transfer | 8000 |
| Water Bill Name Transfer | 8000 |
Sky Properties, Nerul, Navi Mumbai
Address A-1, 7,2, Sneh Co Op Society, Plot no 16, Sector 19a, Nerul, Navi Mumbai 400706
Call Us 9987452642
mayur@navimumbaiestate.in
Great article — eye opener. Thank you for the advice.
Thank you.Glad you found it useful.
All the above advices mentioned are useful to get ideas on tax, loans and cost conditions in buying a good property.. Every Investment with correct rules and regulations is always good for both Seller/builder And buyer of any property..
how is wadhwa palm beach as an investment for now and to live in 5 years down the road?
Depends on your expectation of returns from your ‘investment’.I’ve heard the current rates are close to 12500 to 13000.
Thank you for such a advice this article very informative for investment in real estate.
HI Mayur, Thanks for this article. I am an NRI , so will i also have to pay for tax when selling the flat. I need to invest some amount and am thinking for realestate investment in month of Dec 2012 or Jan 2013. Also if you have any better options for me to invest in New Mumbai with locations and projects.
Yes,you will be liable to pay for the taxes while selling the flat.Let me know when you are ready for investment and I will suggest you a few options.