Advantages And Disadvantages To Know Before Investing In Land

Real estate has always been considered one of the god investment options. Most financial advisors would suggest that some part of your investment should be allocated for real estate if possible. The increase in land prices and the return on investment offered by real estate in the last decade or so has meant that people who invested in real estate at the right time has handsome returns.

But before you get all excited to invest in real estate, like any other investment option real estate has its pros and cons. Here is a look at some of the advantages and disadvantages of investing in real estate.

Returns depend on multiple factors: Returns in real estate are one isolated and depend on various factors. The growth of real estate industry has meant inflow of number of unprofessional people in the industry. For example there are so many new real estate agents in Pune who spoil even the name of the hard working and reputed agents. Same is the case with builders as there is an inflow of new builders who are not always a good investment option.

Location is the key: An essential component in real estate investment is the location. Many times investors plan to invest in locations closer to their homes. This many not always work to their advantage and prices often escalate more in well established centers with a higher demand compared to semi urban or rural areas.

Real estate can be a long term investment: If you plan to invest in real estate experts at suggest seeking a long term investment horizon. Unlike other investments like equity do not expect real estate to give you high returns over a short period of time.

Higher costs are a deterrent: Real estate prices in India have been on an upswing. With such a high cost of investment not everyone can invest in real estate. You need high quantum of capital to investment in real estate unlike other options like mutual funds which you can invest with small amount using monthly SIPs.

Real estate can also lead to loss of capital: If you choose any wrong investment or opt for investing in a property from an unknown builder there are chances of facing losses in investment. Unless you consider all essential factors, investment in real estate does not always lead to a happy ending.

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