Lesson #22: Why Property is the best investment ever OR How to Buy a Property Without Being a Millionaire

Ah, Property. A chunk of land that you can call your own. Property, is, and will always be, in my humble opinion the best investment a man can make. Whether it is commercial property or resedential property that you're buying, in a country like India, there will always be demand for your chunk of land. Investing in property has two benefits:


1) The price of land, one of the most precious resources, will always go up in a country like India, where the population is ever increasing. The more the population increases, the higher property prices will be.


2) You can always rent out your property. Huge sums of money are being paid in rent today in places like Delhi.


Say you buy an apartment worth Rs.50,00,000. You spend Rs.25,00,000 from your own pocket and take a loan against the very same apartment  for Rs.25,00,000. Say you decide to pay this loan back over a period of 10 years at an interest rate of about 12%


It works out to roughly Rs 35868 a month. Now assuming that you put that apartment on rent. The average rent you can make is roughly 20,000-25,000. So your monthly expenditure works out to  Rs 10,868. And you continue to pay your EMI (Estimated Monthly Installment) till the end of ten years. Each year your rent rises by 10% and assuming that value of property appreciates. The same property would be valued at Rs 75,00,000 or even Rs 1,00,00,000. And your rent is now roughly worth your EMI or even higher.


So, as you can see, even if it requires taking a loan, buying a good property is the best investment one can ever make.


Happy Property Buying.
 
Madhav Behl  [On behalf of Doodle inc]