Should one invest in property

Many people who had invested in the stock market in the last one or two years are still waiting to cash out. In fact some have even vowed that they will never invest in the stock market. So many events took place and prices just kept falling.

These persons are now looking for a safe investment but with return. One of the options available to them is property. Property prices in India have consistently being going up. People are waiting for prices to fall, but no such luck. In fact in the last year or two those who invested in property actually have had some appreciation in their investment. This is one asset that offers stability and good returns.

Other than appreciation, there is another source of income, rental income. Remember we are looking at property as investment and not for staying. If it is purchased for staying it is a non-productive asset. It gives you continuous flow of income. Also as time passes, the rental income also goes up, but remember that as the property gets older the expenses also keep rising. But as the property gets older the demand might decrease. This all depends on the location of the property.

Buying property is not easy, so if you are seriously planning to invest in property, you need to do your research first. Not only on the property, but also the funding, since investing in property involves much higher funds, compared to equity. You should not go in for this investment without planning, because if not planned properly you could go into serious debt.

So, start collecting funds for the down payments. Start keeping you’re your funds aside in safe investments. Some of the safe investments are debt funds. As with equity investment, you start keeping funds aside. Once you have the funds aside, start looking for a good property.

If the property identified costs more than amount set aside, you can go for a home loan. Property is one of the few investments where loans are easily available.  Care must be taken to ensure the EMIs are funded for the tenure of the loan. If your income is large enough to pay the EMIs, you will have a good comfort zone. Or else, the rental income can be diverted towards the EMIs. It can also be a combination of both.

When a property is purchased and tenant identified the time spent on the property is considerably reduced. As time goes by the EMIs have to be paid. If well planned in advance, this process can go on smoothly for many years.

Capital appreciation is huge. Some properties appreciate more than others and it's important that you identify such properties with proper research. As you keep investing you will get better. As you go property shopping you will find that there are many more people like you who just invest in property.

Once the loan is paid off, the rental income is just sort of free money. If you really need money at any point of time, just sell the property.  As you would have realized, property purchase involves a lot of running about. So when you get tired running about, just sell all those properties and invest the money in debt funds and enjoy life.