What makes Real Estate investments unique?

By iTrust Financial Advisors (www.itrust.in)

In the past few years, Real Estate has become a popular asset class for Indian families to invest in, over and above their residential housing needs.

The expectation is that an investment in buying a property as a financial asset will be a sure path to wealth creation. Here we share with you the characteristics of Real Estate as an investment.

Real Estate has a combination of characteristics that are not available through other asset classes, thus making it somewhat unique as an asset class.

1) Protection against inflation: A property investment can offer the buyer a good protection against inflation. In this regard real estate is like Gold, in that it usually retains its intrinsic value.

However, unlike Gold, one can earn income on real estate through rental income. Depending upon the existing price level in the economy, one can increase the rents in times of high inflation thus retaining the purchasing power of one’s rental income.

In addition, real estate offers the prospects of capital appreciation as well.

2) Tax incentives: All around the world, different countries offer different incentives to buy real estate. For instance, it’s very common for governments to offer some kind of tax subsidy for a property purchased for residential use (whether by self or let out).