The real estate sector has not lost its sheen and continues to be one of the most preferred sectors of investors. The importance of having an asset increases manifold if a person is nearing retirement. Experts explain how having a rental property will help you after your retirement.
Suren Goyal, Partner, RPS Group says that irrespective of the type of asset, having real estate in one’s investment portfolio is the epitome of wise investing. If it is a land tract, its value will increase over time and by the time you retire, you will have a highly valued asset. Even after many years of rental income generation, it can be sold at a very appreciable price.
He further added that however the sale price would depend on several factors such as location, development of the area, type of land, and connectivity etc. Even if it is not generating rental income, it can be a solid property on rainy days. ,
Besides being a constant income source, the returns or rental income from the property will be inflation-adjusted, says Asma Javed, vice president, Delhi-NCR real estate company.
In form of rent contract This would make it clear that if an annual increase of 10 per cent would apply, the returns would comfortably beat inflation. He added that even if you are paying the EMI for the property, the rental income will cover the EMI and the balance amount will compound if further investments are made.
For a long time, traditional investments have been made in FDs, gold or real estate in plots/flats mainly because they are the safest investments.
Jaikishan Challa, Founder and CEO, Curated Living Solutions, said that the annual growth in rental properties is 5% and secondly, apart from fixed rentals which is in the range of 5-6% of their investments (much higher than industry benchmarks) residential rentals 2-3% of the yield, there is also asset appreciation which is another 5-8% which takes the returns to 10-12%.
according to this real estate Unlike other investment instruments such as mutual funds and equities, where returns are unpredictable and market controlled, returns in real estate are very predictable.