The only risk in real estate is not owning a piece of real estate!
Real estate is a great investment, simply because space is scare. And the scarcer the commodity, the higher the demand. It is simple demand-supply dynamics at play. Also real estate – commercial, industrial, open plots or residential can fetch you income in more than one ways – through appreciation, interest, rent, and tax advantages.
That said it is not easy to save, and buy a home in India, especially in a city like Bangalore.
Over the past decade, Bangalore has become a coveted investment destination, and the average annual property price has gone up by close to 500% in certain areas, says a senior at Goldegate Properties Ltd.
If you have started your first job, or have a little money invested looking to buy your first nest, you can do it with just a few attentions to detail. Or these could be simple reminder writings on the wall because maybe you know all of them already. Here is a little list for your reference:
Yes, your father telling you not to “waste” money on meaningfully pursuits of pleasure – is sadly true. Start with your first salary. Look up at the power of compounding. Even when it comes to your retirement funds, start from your first paycheck. Did you know that investing even a 1000 for 30 years in a fund that gives you an average 10% return will fetch you over a billion? We’re not suggesting you be Uncle scrooge, which is where our next step helps.
You can live comfortably, have fun and save if you can budget properly. There is a world of a difference between being thrifty and being stingy. Economical is such a wonderful word. There are numerous applications that can help you budget. Or you can make small changes to your life by cooking and not eating out. It can start with something as small as that. Making a budget will help you understand your spending pattern, where you can cut corners, and where you could stretch a little more.
Look for investment options around you. Once you budget you know how much disposable income you have. Disposable income is the amount left after you pay for your necessary spends – rent, food, transport, personal needs, etc., When you have a figure in hand, you know what to do with it. Do not invest it all at one place. Diversify that as well. If it is a 10000, put a little in a systematic investment plan, a little in a public provident fund, a little in the stock market and a little in say the commodity market or even gold. The mix can be constant every month or you can keep changing it.
Use the three month rule
While making a investment plan, or starting a saving fund it is often problematic to stay consistent. The first save is easy. Keeping up with it is difficult. Use the three month rule here. Do not give up before three months. It is like staying put with an exercise regime or a diet plan. Give it time.
Set a time based goal
Give it realizable time. 5 years, 7 years from your first paycheck. Now choose investment options that can give you the road map to realise that goal. Set conservative goals like building a 10 lakh fund in 7 years – it should be realizable and not something like I will save 5 crores in one year.
Do your market research
In the meantime, check for upcoming areas. What areas in Bangalore are likely to develop in the next five years? How much would the price in those areas likely be in the next five years? Talk to real estate experts, read blogs, read reviews to understand what you are looking for. For example Golden gate reviews will give you an understanding of what amenities they offer, what you should look for, where and why you can consider buying, etc.
It makes perfect sense to invest in a place where the trend says it is likely to go up even more, right? But with prices skyrocketing, this can be a distant dream too.
For most of us this is perhaps the largest investment of our lives. Maybe not the last, but definitely a big step! The good news is, with a little financial discipline and hacks you can buy your first home soon!