The Pros And Cons Of Buying Investment Property On Home Loan

Several people understand the value of investing in real estate. Take a look at the real estate market for past years. You will understand that it is a valuable asset in the long run. It is not a liquid asset. But, you can enjoy substantial capital gain on this investment. It makes sense for a lot of investors to consider a property as an investment on a home loan. But, you cannot rush this decision. You must take this decision holistically.

Pros:

There are several advantages of buying an investment property on home loan. Here are the most popular reasons for buying it on a housing loan.

Potential Growth In Net Worth

Real estate is a great investment. In most cases, the cost of your investment property will grow over the period of years. You can either convert it into a weekend getaway or rent it. Either way, it is a great resource. This investment property offers s substantial increment in your net worth too.

Income Tax Rebate

This is one of the most popular reasons for buying an investment property. Every rupee you pay in home loan repayment is tax-free. Whether you repay principal amount of interest, it is tax free. This is the easiest way to enjoy tax exemption for salaried individuals. Each year, you can adjust your house loan repayments to meet your tax exemption requirements. Whether you prepay home loan or restructure your home loan for an extended tenure, you will continue to enjoy income tax exemption.

Great Investment In Minimal Amount

You can own a property at the cost of the down payment. You can repay the rest of the amount through home loan EMI. Housing finance system in India has simplified the opportunity to buy a good piece of investment. The cost of this property may rise after the announcement of a new airport in this region or a new infrastructure project in this locality. So, you can take benefit of these developments without investing equivalent funds. Contact your lender, meet home loan eligibility criteria and submit documents required for home loan. You have a chance to own a property and all potential capital gain from it. Very few assets can offer equivalent growth in value.

Cons:

There are disadvantages of owning an investment property on home loans too. There is no way to avoid it.