Retirement is inevitable. It depends on us, how we want to spend our dotage — secured or ragged. Retirement planning is quite intimidating, but our investment strategies and portfolio choices make a lot of difference.
In India, the rent-yielding residential inventory is over 534 million sq ft, worth $70 billion. Annually, 3,00,000 units are sold in India, majorly in the top six cities, including Delhi NCR, Bengaluru, Mumbai, Chennai, Pune, and Hyderabad.
The returns in buying and renting a residential property through fractional investment are quite huge. We, at Arun Dev Builders, have made the task easy for you by comparing real estate investment options with other avenues, to ensure better returns in the long-run.
Residential properties have a unique characteristic. For example, it is an amalgamation of fixed deposits/debt mutual funds and equity, but with a lesser downside risk and a higher upside leeway.
Residential property investors receive monthly rental gains of 8-9%, which surge annually, in addition to a share of the capital appreciation of the property. If selected smartly, a nimble asset manager can considerably lower the downside risk, while maintaining the upside prospective in place.
According to the statistics, residential property investment can return over 15-25% each year with 8% as the lower verge, owing to the rental gains. Moreover, two vital factors make it a smart investment option, as compared to Fixed Deposits (FD). The yearly rent appreciation guards your investment from inflation and the lower tax policy saves your post tax returns.
Furthermore, an individual is required to pay 33% tax on FD interest, whereas, rent is only taxed at 21%. The FD/Post office schemes make the holder entitled to a bonus, which is also taxed at 33%. Whereas investment gains from property are taxed at only 20% (lower following accounting for indexation).
Retirement planning must start with wealth appreciation and steadily move to capital stability, as the investor moves towards the retirement age.