Getting financial freedom is the goal of most people. This can be done by investing. However, investing certainly cannot be arbitrary. Learning to handle inflation and balance a portfolio is crucial and both can be achieved by combining a variety of assets. One of the most popular investment instruments is real estate. Investing in real estate is very promising, just like you did at Shapoorji Hadapsar Annexe.
Why can investment in this area be so attractive? There are advantages to investing in the real estate sector:
Tax-free cash flow
One of the main benefits of real estate investing is depreciation and reduced interest on credit (if you take advantage of the capital you have) as well as tax-free cash flow. Investors can wait for capital gains from future property sales, without having to include tax expenses in their cash flow.
Improved tax cut strategy
Based on your tax status, rental property will not only provide tax-free cash flow but can also be used as a tax deduction against the source of income. Before investing you are advised to consult with a tax professional.
Another advantage of investing in the real estate sector is the opportunity to reduce your risk. Real estate has a low or negative correlation with other major assets. This means that owning real estate in your portfolio can reduce volatility and generate higher returns.
Real estate investment has historically shown the highest correlation to inflation compared to other major assets, such as stocks, bonds, and corporate bonds. As the government continues to print money to stimulate growth, having real estate assets as a protection against inflation is a smart move.
In general, as inflation increases, the price of real estate, especially multi-tenant assets with high labor and replacement cost ratios will also increase simultaneously.