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May 22, 2023

Invest in real estate to beat inflation rate

BBY BougainVillas Admin

Why do we keep hearing people say that you need to keep augmenting your savings?

The answer is: Inflation.

High inflation reduces the value of our savings over time. Yet, savings are essential to prepare for big expenditures of the future. Things like children’s education, marriage, retirement or hospitalisation. Therefore people look out for ways to invest in financial assets that protect their savings by beating inflation.

Investment in the stock market is the most rewarding, but there are risks. Inspite of prospects of quick capital gains, those who do not have the time and expertise for research and information vis-à-vis the stock market should rather invest through the Equity mutual funds route. The latter are a less risky method. Apart from great long-term returns on investment, equity mutual funds provide excellent liquidity. There are schemes which help save income tax too.

Another more common investment is in bank or corporate fixed deposits (FDs). FDs offer stable interest income and they can be liquidated in a short time with some penalty. Besides, there is no fear of losing your hard-earned money if it’s in a scheduled bank. However, FDs fail to beat inflation over a long period, especially after paying applicable income tax. /p>

Then there is investing in gold. Culturally, Indians have always found a great sense of security in gold. Besides, gold can be bought or sold quite easily. However, there is a downside. Usually, investment in gold is done in the form of ornaments. There is often a question on the purity and the making charge for ornaments, which cannot be recovered from the sale of these ornaments. RBI issues Sovereign Gold Bonds from time to time. They offer a superior alternative to holding gold in physical form. The risks and costs of storage too are eliminated.

This brings us to the other hard asset with which you can enjoy capital appreciation and earn inflation-beating returns: Real estate.

Real Estate: the final frontier

Unlike some overseas countries, the Indian real estate market has been very stable. Investment in real estate can offer capital gains as well as regular rental income. No other investment offers capital gains and monthly cash flow at the same time. Over the years, prices of real estate appreciate, and in the long term the returns on investment easily beat inflation.

India is entering a period of massive urban infrastructure growth. A mind-boggling amount of Rs 10 lakh crore is being allocated for infrastructure investment in the Union Budget 2023-24. This will hasten the pace of urbanisation in the country and consequently, the real estate sector will get a big boost. As the high interest rate system usually keeps real estate prices in check, this is the best time to invest in properties. Once the interest rate lowers, the prices of properties are bound to go up.

Kolkata offers handsome prospects

Kolkata property market experiences comparatively less volatility and is good for long-term investment. It offers amazing investment opportunities right now as the prices are stable and you can buy property assets at decent prices. As a rule of thumb, it is always better to invest in under-construction properties as they offer price appreciation while approaching completion. The trick is to discover upcoming projects that have the potential to appreciate vastly in value.

A good example is Gems Bougainvillas Joka. It has won Credai Bengal’s ‘Best On-going Villa Project’ award in December 2022. No other upcoming residential project near Joka Metro (and there are quite a few of them!) can boast of offering genuine architectural bungalows not mere facades, at these prices; and that is precisely why we think they are a sound investment to beat inflation. For, they will be hot sellers in the future.

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