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Wednesday, April 14, 2021

Is Investing in a Property a good move now?

Financial asset values are climbing high every single day. With time it is becoming extremely necessary to buy a house or a property in order to safeguard your and your family’s future. In the current scenario where the market is becoming more vulnerable day by day due to the global pandemic. One question that can pop up in your mind is investing in a property a good move now?. So here we have presented some extremely useful information that can help you to evaluate the risk factor while taking your decision before buying or selling a property.

Why buying a property is a good option?

Buying a property now is not that bad as you may assume. Multiple reasons can prove that buying a property is a good move now. This lockdown as forcibly showed us who is the privileged class and who is the under privilege class. Having a house to live in such a difficult time is more than comforting. Also, the house is a real asset it is not one of those assets where you invest but just worry day and night that your investment and asset may evaporate and you may have to face a loss. So, this can be the first reason to buy a property or a house now. Second, after this crisis end, the government will look to jumpstart the economy and property prices are most likely to hike. 2008 is one of the biggest examples when the world had to witness the most serious financial crises after the great depression. One thing that you need to pay attention to here is that after the 2007-08 financial crises ended, the median home prices in the U.S had increased by 50% in 2009.

Third, the prices of the property are being reasonable for many years now. Also, you can choose from a variety of properties you want to buy because until 2019 there had been 7.75 lakhs units in the unsold inventory. With an estimate of approx 29 months to sell these unsold units, there are possibilities of scooping a good property at a good price. Fourth, the interest rates on home loans have been lowering down. And there are chances that these rates may remain low in the future as well. So buying a house with a home loan is not a difficult task anymore. Here is a link that can help you in finding out the best home loans concerning the rate of interest and processing fees.

Why avoiding buying a property can be a good option?

One of the main concerns and also a reason to avoid buying a property is liquidity. The Pandemic has resulted in serious cash flow issues. For now, more than spending, managing and conserving cash to fight against this virus is the priority for people. This eliminates the possibility of investing in real estate. There is a possibility of liquidating the financial assets when they fall but it’s in the case of property. This lockdown has also brought a lot of concern and worries regarding jobs and income. So taking a loan only because and getting commented into a long term plan is not a wise decision. Currently, the need of the hour is to be wise with your savings and spending. Secondly, even though the property prices haven’t been increasing from the last few years, the data shows that affordability is still low. The residential asset price monitoring survey data published in 2019 by RBI shows that house-price-to-income has been worsening between 2015 to 2019.

The data also shows clear winning results for renting a house instead of owning one. Well, if you are thinking to buy a house and earn rent out of it then the residential market, for now, is a sign of disappointment.

Strategy to wisely allocate the assets.

A strategy is a must before investing in any kind of property. For that, you need to have a fresh look at your overall investment portfolio and rethink how to distribute it. You may think that selling assets is the only option in critical situations. But instead of selling it out, you need to weigh the potential of the investments and identify the short term bets and hold on to others with the long haul. Some might be comforting at the moment that there have been no changes in the home prices and there will be a steep and drop in the prices. So it is ideal to be cautious in the current situation before investing and in a low-interest-rate environment, property-related investments such as REITs are worth considering.

Is investing in a property a good move now?

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Mayuresh Patil
My Instagram says I am silent-ink, My Facebook says I am a Newsy Guy. And My Gmail says I am an Utter Chaos. To sum up, a combination of Creativity + Simplicity. Also, never underestimate the power of words.

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