Investment

Paying Rent? A Home Loan Is the Best Solution For This

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Home Loan: When you move out of your parent’s house for the first time, you look for house renting options. Once you find a suitable property, you settle down there for a considerable time. However, after a few years, you may hear people say that you should consider buying a house on EMI instead of paying rent. At this point, even you start thinking about the same. 

In case you are in doubt about what to do, here are some benefits of opting for the PNB housing home loan over paying rent. 

#1 Mental Relief

Nowadays, most of our actions are done for mental relief, such as emergency and retirement funds. The same thing goes with purchasing a home. There is a certain security in the feeling of “my home,” which can’t be achieved through a rented place. 

Plus, you don’t remain dependent on anyone for any tasks of the house. You can take care of everything on your own without worrying about what the owner will say. This is the primary reason why more people in India prefer buying over renting properties. 

#2 Stability in Future Finances

Rent never remains the same. After a specific period, your landlord increases the amount by a pre-determined percentage. So, the longer you stay in the property, the more rent you will have to pay. On the other hand, home loan EMIs are almost fixed. You may opt for a flexible home loan interest rate in India, but that won’t change as much as the rent. Therefore, you can easily predict the future costs and plan your funds accordingly. 

#3 Asset Ownership

Even though the home loan is a liability, you are still securing an asset for the future of your family. Once your loan gets paid, you become the full owner of the house. Then you can use that property for any purpose. Plus, you can also opt for a loan against property later in life for fulfilling any personal financial objectives. 

#4 Better Tax Benefits

Both rent and PNB housing home loan are eligible for a tax deduction. Where you can avail of benefits under Section 80C and 24B for the loan, Section 10 (13A) offers advantages on rent. However, there is a considerable contrast in the amount that can be deducted from tax. Home loan offers better subtraction than rent. A few more additional tax benefits on loan are:

  • In case you have a co-applicant for a loan, both of you can claim the deduction separately on the individual amounts paid. This increases the overall benefits on tax. 
  • You can avail of the benefits for your taxable income and not only on the salary. Contrastingly, Section 10 (13A) only provides deductions for regular salaried employees. If you aren’t a salaried person, you can’t get the advantage. 

Conclusion

There are several other perks of purchasing over renting. Once you buy a house of your own, you will get to know all the benefits. So, I advise you to start your research, look for home loan interest rates in India, and pick the most suitable loan alternative. 

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Investment Real Estate 

6 Things to Consider When Buying a Rental Property

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Rental Property: As you might be thinking to seek a suitable renting property for your family. Accepting Rent Agreement Online and might thinking to shift to a new renting house soon. Here is the list of 6 things that you should look at when choosing a rental property. 

  1. Location: Location is the most important factor which you should consider before selecting a rental property. If you are a student choose your location according to your school or college and if you are a working person then you should choose a place that is near to your workplace. Plus, you should choose a location where places like banks, markets, hospitals, daily requirement places are nearby. Considering all this will not only save your time for the future but also makes your living location more comfortable for you.
  2. Neighbourhood: There is no need to hurry about the rental proceedings. First, have a full check on the neighbourhood as you are planning to stay there for a while at least so you should obviously choose a neighbourhood that is nice and comfortable. Moreover, they could give you the best opinion about that place’s locality, house, and your landlord. So it is always better to visit the society a few times before selecting a place and talk to some people and get their opinions.
  3. Clean and good condition home: Before finalizing a place, do not forget to check windows, doors, locks, taps, electric fixtures, etc. These things seem to be minor or ignored but they are also necessary to check in order to avoid future debates and if anything from all this seems not ok to you, then you can tell the landlord to get it repaired for sure before shifting. Otherwise, you have to deal with all this after shifting and it will take your essential time then. Also, ask your landlord to get the house cleaned before your shift.
  4. Electric Meter: Do not forget to have a look at electric meters before stepping in into a rental property. Also read all the necessary terms related to electric meter mentioned in a rent agreement Gurgaon. In fact, it is always better to note the meter reading for checking the accuracy of the bill.
  5. Overall Cost: Are you thinking that you’re going to pay just a monthly amount for the property? If that is what you are thinking then let me tell you, you are definitely wrong here. Besides monthly rent, you are going to incur other expenses also such as security fees, broker’s fees, advance rent, and many other expenses. so before shifting consider your budget according to all these expenses and then choose a particular house.
  6. Rights and Agreement: Last but not least. Before signing up for the property you should thoroughly read your renting agreement and understand the rights and responsibilities which this Rent Agreement Online is assigning you. And if you are not considering a rental agreement then for sure you are at a loss because a verbal discussion is never enough in situations like these, they can be the reason for your disputes with your reason, and as it is said it’s always better to take precautions than cure
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Investment Real Estate 

Why Paying EMI is Better Than Paying Rent

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Why Paying EMI is Better Than Paying Rent

A common refrain heard is that“it is better to pay an EMI and own a home, rather than pay a rent and make someone else rich”. While this argument does have merits of its own, there are certain times when paying a rent makes more sense. So, for taking a decision of buying/renting after carrying out an analysis of your financial position,debt-income ratio, need vs want of owning a home, expected trends in the property markets and other factors. But here we will see some of the benefits of paying Equated Monthly Installments(EMI) in buying a home over the rent.

Tax Benefits:

Besides getting to own an asset the principal repayment of your home loan is eligible for deduction under Sec80C. It means you are better equipped to make use of the entire deduction allowed. Also, interest payable of up to Rs 2 lakhs is deductible from your income. If it is a joint home loan, both the spouses are eligible to claim deductions up to Rs 2 lakhs, if the loan repayment is done in equally by both.

Source of Additional Income:

One can always rent out the property if not occupied by self and paying the EMI. This could lower some burden of EMI payment.

When EMI Makes Sense Financially:

The first factor to evaluate in the rent vs EMI debate is your financial position. You may have found the perfect house – which is close to work and school and has all the amenities you need for a good life close to you. Find out the approximate price with all additional costs. Paying EMI will be better if this sum is more than 75% of your proposed EMI.

How much Upfront Payment can you Afford?

Generally, you may be eligible for a home loan that covers up to 80% of the cost, means, you have to pay around 20% to 25% of this amount upfront as your contribution. For example,with your down payment, you will get a loan amount of Rs: 48 lakhs for a Rs: 60lakh home. This would put your EMI at approximately Rs: 50,000 per month, based on current rates of interest. If you can pay over 50% of the value of the home as your contribution, then that will be a good idea for you to invest and pay EMI.

Will you be Ready for Pre-Payment?

In an ideal scenario, you should be prepared for a total pre-payment of your loan amount within a few years of beginning it. Keeping in mind that making regular EMI payments will get you a good discount when you work on pre-payment. So, calculate your finances and make a projection of where you will stand a decade or so after taking the loan. Pre-paying even a small amount of around Rs: 10,000, in a reducing EMI scheme,will help you make some good savings while buying a home. This will help you making a decision on buying a home with EMI.

Investment Knowledge Based Articles Real Estate 

10 Things You Must Understand About Investment

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10 Things You Must Understand About Investment

Every year, Inflation lops an average of3.87% of the value of your money. Investment is the only way by which you can grow your money and outpace it. So, investing is important. Investments can be done in various forms and you must decide where to invest your money. For the help in navigating through the investing field 10 basics need to understand about investment.

For Stock Market investment don’t rely on the past behavior to predict for the future. Though professionals can make educated guesses on the market’s future predictions no one can reliably predict the market.

Investing is always risky. Either you could earn money or loss it. Professionals recommend you should not invest money if required in next 5 years, for if the market falls you won’t have enough time to recover it.

For investing you do not need to be an expert. A lot of information in books and podcasts and even financial planners,wealth advisers and robot-advisers are available. Simply to start with you can invest in your office’s retirement plan, if available, following it can go for Roth IRA or traditional IRA and so on.

The earlier you start, the more you gain.The biggest asset is time for all kind of investments even retirement savings as it grows in compound interest and nothing can match it. In addition, if you lose in the market you will have more time to recover it before you required.

Set a goal for your investment based on reason. purpose and objective. Once you established the objective then your investment time frame will be known, and you can plan out how to invest.

Investment is dependent on your time availability and reaching your goal. Based on these you can set your strategy. For investment there are 3 types of asset classes: cash, bonds, and equities and each of them have their own expected rates of return ranges over a time-period which helps determine how to invest. If your money requirement in:

0 to 2 years – Cash asset. It has some sub-categories like savings accounts, CDs, and money-market accounts. These have a low return rate and stable.

2 to 5 years – Bonds asset. Normally, they generate from 3% to 8% high over a time-period. These are more stable than stocks and generate a higher income than cash. They also fluctuate but not like stocks.

5 or more years – Stocks asset. They eventually outpace the inflation and brings the most return. They have a huge range of returns from -38% to even +30%. In a time of 70 – 80 years, it can reliably generate about 8% return.

Never invest in one place, always diversified your investment.

Investments come with a cost like fees and taxes.

Don’t get emotional on your investments and move them constantly. Just leave them alone and avoid getting into the anxiety of constant market updates.

Don’t forget your investments forever. A sin time, your selected portfolio may not suit your current situation and need to be re-balanced.

Investment 

What are the Best Ways to Invest?

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Best Ways to InvestFor a good investment you need to know why, how and when to invest. So now is the right time to invest. By the power of compound returns in investment you can grow your money. Comparably there are 4 best ways to invest your money.

Though many people do not trust the financial markets but historically it’s a fact, investing in Stock Market actually paid off. Invest in small sum by a method called “dollar cost averaging” over a length of time. The method works like when the market is high you are buying fewer shares and when it is low, vice-versa. So, over a time, one can have lower average share price using this method. Some tools we can use to invest:

A typical suggestion is to invest in mutual funds or ETFs. For mutual fund you can use a financial-advisor who on your behalf will sort out the well-performing actively managed funds from the other non-performing funds else you can cling to an existing brokerage-account. There are also few companies who will help you to invest money in ETFs based on your appetite for risk, investing goals and other factors without any charge for managing. You can also find very low charge robo-advisers for this purpose.

The index funds which are not actively managed but have a good long history of solid investment and can be used for retirement purpose. These funds hold every stock in an index like the S&P 500, including big-name companies such as Apple, Microsoft and Google. As these companies offer low turn-over rates so their fees and tax bills tend to be low also. The trick here is to buy all the big companies through the S&P 500 consistently in a very low-cost way and not picking up the right company. Even, say in a period of 10 years, low-cost index funds could outperform hedge funds.

Peer-to-Peer Lending is a method to lend money to individuals in small increments as if you were the bank and getting interest from them using platforms like Lending Club and Prosper.

In Real Estate investment, not necessarily requires dealing physically and going through the hassles of a landlord. There are many ways by which you can invest without dealing with the physical property like real estate notes or Fundrise. These are all hands-off investments where you will be a part of the owner without dealing physically. You can earn good returns but there are risks too, for trusting third-party on your investments.

Investing in yourself is one of the best ways for investment. There are few ways to do so like, read a lot of books on successful personal finance strategies or leadership skills which will make you absolutely smarter in a course of time, investing into material that you can learn from other people, personal coaching and don’t think about the idea of going back to a business-school. Though this kind of investment might sound cliché but it’s a bet that could absolutely pay-off.

Finance & Economy Investment 

How to Make Investments in Your 30s

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How to Make Investments in Your 30sIf you’re in your 30’s, many life transitions happen like from moving up in your career to buying a home. So, getting started in your 30’s and making smart moves with your money will help achieving your future financial success and will provide you with plenty of time to save for retirement and the future.

The priority is to set your goals and diversified your investments i.e., don’t invest all your expenses in one kind of investment only. Invest in various type of investment plans based on your needs and for meeting your goals.

Below some of the advises for investing correctly when you are in your 30’s:

  1. Taking care of the immediate needs by yourself: Ensure that you have at least 6 months of emergency funds already saved and be financially organized i.e., keeping accurate records of your finances and know where your money is. So, spend time on tracking and reviewing your money. This will let you know if you are moving in right direction or not. Keep on re-balancing your investment as per your current situation.
  2. Ensuring of taking care of your family: It’s to assure not leaving your family screwed when you die. So, invest in Life Insurances which will replace your income and your family won’t become homeless. Investing in Disability Insurances, this can replace your income, so your family can leave, if you gone disabled for unfortunate misfortune. Invest in Child Plans for securing the future of your children’s education and other purposes. Invest in good Health Insurance Policies for all family members which will save a lot of your hard-earned money during hospitalization and other medical expenses.
  3. Saving for the future: Once you have the essential tools for your family protection, now you can go for your future savings. Start saving systematically. Embrace Stocks, invest in various pension plans available which are tax free, etc. If you have any excess money invest in standard brokerage accounts. Investing on a set schedule will make you a better long-term investor. Focus on the percentage of income saved and not the amount of money. By saving based on percentage of income will help you saving more as you earn more. But don’t take risks that you cannot afford while investing.
  4. Planning for big event expenses: Once the above items are taken care-off now you can look for balancing life events. Pay off all your debts that are continuing like student loan, credit card debts, etc. Then use the left-over money after saving for retirement and investments to plan for things like vacations or weddings as these expenses are flexible.

Wealth can be built by anyone if they willing to stick to some best practices for money management:

  1. a) Focus on the habit of spending and saving intentionally.
  2. b) Building of wealth needs time and doesn’t happens in days or months. So, avoid get rich quick schemes.
  3. c) Seeking guidance from experts or people who are successful in growing wealth.
Investment 

Things You Need to Know About Property Investment

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Things You Need to Know About Property InvestmentProperty or real-estate investment is also like any other business has associated risks. But there are many people who have earned a fortune from it. But it doesn’t guarantee that everyone can earn a fortune by investing in property. Whatever type of property you are purchasing, all these requires a large amount of cash which makes it a very risky business provision. There are many things you need to know before investing in real-estate.

When you are investing in property, you will always look for the profit outcome at the end. So, take it as a purely business investment and think logically about it and not let your emotions affect your decision. So, lower the price you get better the chance that you may get higher profit from it.

Always buy your property in well-researched areas based on your targeted clients. Make sure that the location has real economic growth drivers to sustain your investment in the future based on your targeted clients. Apart from research, using an analytical approach logically based on the financial factors will help you purchase the best property. A good investment is based on economics and not on emotions. The other factors like:

  1. Property Cycle: Aim to purchase at the lowest point of an area so to capitalize on growth. Not buying in a boom cycle.
  2. Capital Growth: To buy where growth in the market going to occur. Utilizing a buy and hold strategy and strong economic growth drivers will ensure the capital growth which will enable you to gain equity in your property and this keep you purchasing more properties.
  3. Solid Yield: Aim to buy property that has more than 5% yield. A solid yield will keep you in the market and you can maintain your investment. The equation is: ((Rent/Week * 52) / Purchase price) * 100.
  4. Knowing Market Value: To buy property on or below the market value of the region. This ensures that you are not paying too much, or it will stagnate your ability to purchase more. OFF THE PLAN purchases are not recommended for this reason as the true market values are not mentioned.

There are different ways that you can invest:

  1. Positive cash flow property
  2. Negative gearing for capital growth
  3. Do renovations to increase the value
  4. Subdivide a property
  5. Do larger developments
  6. Do a buy and hold
  7. Buy units

So, work out on what investment strategy suits you and invest likewise.

A calculation of expenses and profit must be worked out beforehand. Calculate the money you have, how much you can borrow, calculate the purchase cost based on your suitable investment strategy and the operations cost. Lastly, estimate the price you are going to list for the property and minus the expenses to get a rough estimate of the profit. This calculation is necessary to keep you in the safe zone.

Pay all your other debts if you have any, choose appropriate investment loan options and choose your partner carefully, if required.

Investment 

How to Finalize the Location of Your New Home

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How to Finalize the Location of Your New HomeChoosing the home of your dreams can be a nightmare decision for a person. It takes so much effort of putting in the research work, visiting sites, dealing with the agents. To go this daunting process, follow the steps below:

  • Start by looking at the accessibility and the proximity factor around the site you find attractive.

You would like to have a house from which transportation is easy, cheap and should be somewhat close to the airport or railway stations. Check whether the school is closed for your kids, and shopping centres and grocery shops.

  • Next on the list is fixing a budget. Factors like conveyancing, state taxes, duties and fees should be taken into account. Choose the right type of loan to suit your needs and obtain a pre-approval by contacting a mortgage broker.
  • Now it’s time to find the block of land in your desired area. It’s always thankful to get away with a cheap one however, you should consider whether you are ready to compromise if you find the land to be irregular, fall on the lot, positions, orientation, proximity to major roads, ease of access, whether the lot is titled or not. Check how the overall streetscape gets impacted by the Estate Design Guidelines.
  • With the land now meeting your fancies, it’s time to decide the home design and builder choice. Select the floor plan, façade to it on the lot, appoint a colour design consultant to get the interior designing, fittings and textures done. Be cautious not to fall for the extravagant stuff that might affect your budget.
  • With this its time for the building agency to take over. Design your home with all the latest upgrades as per your budget, including the final site costs in the Building Contract. It is almost mandatory to have a written contract in case of any future discrepancies.
  • Once the piece of land has been titled, it is high time for the builder to conduct a soil test and report any site costs as per requirement. After receiving the external approval, such as formalizing unconditional finance approval, obtain the building permits. Contact the building supervisor to initiate the building process.
  • As your Dream home starts to take shape, a percentage of the overall contract value would be invoiced as per required slabs, frame, lockup etc. After completion, builders will schedule Practical Completion Inspection.
  • Now as the building process and final inspection is over with all the finishing touches, the arrangement for the final settlement payment has to be done. Then finally you have the keys to your new home. It’s time to settle!!!

 

Investment Knowledge Based Articles 

How Could an Investment in the Home be Highly Beneficial?

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Home Investment BenefitInvestment in the house or more specifically buying a house has been considered a good investment. But after buying a house are you planning to move it? Owing to a house and renting it out is more beneficial and better choice.

Are you thinking of buying a house? Do want to be a homeowner or you are planning to rent it out? You first need to sure about you want a home or you want an investment? This article is all about for those who want to invest on the property but doesn’t know if the home should be where you live, a rental property, or if it can be both simultaneously.

What is a Good Investment?

A good investment is something that will return you more than you paid for it.  An asset is something that helps you get money in your pocket. A liability is anything that takes out all your money from your pocket. So, is your home a good investment? It is very important to understand whether your personal residence is an asset or a liability? Is the situation like every month you are paying the mortgage, insurance, property taxes? Despite, after the house is paid off you are still spending money maintaining the house and paying your taxes and insurance. Then this house is still taking money out of your pocket and this is a kind of liability. Your house is productive and might look like good, but the fair play is locked up in the home. So, if you are in financial need, you either need to re-mortgage or sell the house and then you are back to having mortgage debt or looking for a residence to live.

Buying a house is always accepted a good investment because:

  1. Sometimes properties prices increase adequately for people to make wealth.
  2. House is something you can see palpable and people like palpable investments.
  3. People assume that they are getting enough wealth by living in the house, and also anything they sell is an added bonus.
  4. Parties’ like-real estate agent, attorney, bank etc. gets the benefit and therefore, they want you to buy and sell your property as often as possible.

There are factors that decide whether buying a house is a good investment or not, such as:

  1. The cost of the house. It shouldn’t go out of your budget at all. Buying a home that puts you in debt isn’t an option
  2. The rent that you have paid for the house (for those cases like, if you have rented it instead of buying it).
  3. The selling price of the house with the present market rate.
  4. The negotiating cost involved: as because buying and selling aren’t easy.

Hope this article has made buying a house seems less harrowing and more manageable. Owning a house can be a beneficial source of income and a significant source of comfort, stability and happiness.  Plan it well and do let us know if we have missed out on any crucial point.

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Investment Real Estate