Pros and Cons of Investing in a Residential Property Under Affordable Housing Projects

There is a lot of contemplation before investing in a property due to the kind of tedious job it is. As we all know having sufficient money in hand just does not serve the purpose. Intricate research and consulting is required before the long term plan is put in place. However, as every coin has two sides, buying a home has its own advantages and disadvantages. It’s very essential to have a sneak peek on the ups and downs involved in buying a residential property especially if you are planning to buy an affordable housing project.

Advantages:

Get rent: If you are not planning to reside in the home you are going to purchase, you may add an income source to your profile as the new home can fetch you a regular income which you can transfer to other requirements. You can even transfer this rent amount to pay the rent where you are residing. If you already own a home, the rent can be an additional source.

Save on paying rent: If you are buying a home to reside, then you may save on the paying rents. The rent you used to pay earlier will become your EMI now. You are expending the same at the joy of owning a home. If you have an alternate home to stay, you are acquiring a new property with the rental income.
  

Home security: You can have the sense of satisfaction of owning a home which is incredible to any average dweller. If one owns a home, a least income is enough to carry on a basic life no matter how small the home is.
  

A fixed asset: It is very important to have fixed assets as experts suggest a major share of investment on fixed assets to get good returns over a long term. Bonds, gold, SIPs, policies are nowhere equitable when it comes to investing in a property. It can even be a low income home for sale, you can purchase it to have a fixed asset on your financial portfolio.

Returns on investment: If you buy a home, it can give you a return on your investment on a long run. The returns are generally multifold and are highly incomparable to that of current assets.

Disadvantages:

EMIs: Paying EMIs become a burden as they are meant for a long term for about 15 or 20 years. This is an expenditure which cannot be ignored and if ignored, one may have to end up losing the property in a Government auction.

Less appreciation: A home gets less appreciation when compared to a plot or an agricultural land. Over a long period of time, the construction has no value and it can lessen the site value.

Less returns: A residential property gets less returns over a commercial property or an unconstructed site. People prefer to buy an empty site over a home.

Loss of interest: One may loose on interest if the property is valuated after a long period in accordance with other properties as returns are lesser on a home in comparison with a plot or a site.

Out of trend: A site on which a plot is constructed can’t go with latest trends and may lose on value after a period of time if not upgraded periodically.

Hope these pointers may help you in deciding before investing in a residential property.