Investing your hard earned money into something is an important decision to make. With a plethora of investing options like stocks, commodities and mutual funds in the market, how does Real Estate sector stand the test of times?

The real estate sector in India witnessed major reforms in the year 2017, affecting it's growth. When government comes up with policies that impact sectors significantly, a downward trend and scepticism is unavoidable during the transitional phase. Why we believe that it is just a matter of time, is because all these reforms have focused on decentralizing authority from the developer to the hands of the buyer, aiming at boosting their confidence.

One always intends at using investing instruments to earn profits, but what is it that makes real estate the best bet?

Most of the Indian investors prefer safe investments over risky ones, which is clearly evident from the peg of most investment advertisements in the country. One reason for this is that huge chunk of our population lies in the low to mid-range income group, who if invest then do so with the aim of earning a decent amount of return instead of risking it all.

Considering these parameters, there are certain fundamental qualities of real estate investment that make it the most suitable option. The best part about the real estate market as compared to any other investment option is that people are not a part of the market to just trade. As per a study, about 70% of the people who buy homes do so to live in them instead of using it as an investment deal, hence this provides as a safety base for protecting the real estate market from sharp trends arising due to market sentiments.

Also, when you compare investing in share market or commodities like gold, buying a house serves a double purpose as it is not only a good investment but can also be used to reside. It satiates the need of touch and feel (unlike stocks or commodities) for the Indian customer, which is an important sentiment here.

Only a section of people invest in shares or mutual funds but a larger section of the society aims to buy a house one day. The process is less complicated as it minimizes the need of technical jargon or knowledge as compared to the stock market. Besides, it is also not prone to wide fluctuations as only 30% investors put their funds into real estate for trading purposes.

Buying a house requires you to have certain sum of savings which enable you to make at least a part of the payment, above which the banks can finance. Banks prefer to take residential property as security over any other asset class because of its value and low-risk nature, thereby getting a home loan in India is not a difficult task. For home loans, banks also never tend to ask you for increasing the amount to be paid back as in the case of a marginal call in shares, when market prices fall below a certain level.

While investing in real estate can be a long-term game, if one buys a house to rent, the regular income earned through rent can be used to pay off the loan installments and holding costs if any. This reduces the burden on the owner. Real estate investment also does not limit you to just buying constructed property but one can also invest in buying a piece of land which they can subdivide or develop as per their wish.

Overall, the sector provides for many plus points over other investment options in India and is suitable for a wide range of people.