Unlocking the Potential: A Beginner’s Guide to Wealth Building with Real Estate

Think of real estate as a magical treasure box, overflowing with possibilities. It’s like holding a tiny piece of the planet in your hands, whether it’s a warm little house, a lively shop, or a big old warehouse.

Now, let’s think about something exciting:

Can we count the Taj Mahal, that masterpiece of love and beauty, as real estate?

First, let’s get an understanding on what real estate really means. It’s not just about the ground we walk on. It includes the space up in the sky, down to the earth beneath, and any permanent structure built on it, like buildings.

And Yes, the Taj Mahal, with its story of love etched in marble, is indeed a piece of real estate. This goes to show how vast the world of real estate is, stretching from the homes we live in to the wonders of the world that inspire us.

Real estate refers to the land and any permanent structures or enhancements attached to it, whether they’re natural or human-made. This includes elements like water bodies, trees, buildings, houses, fences, and even bridges. Real estate falls under the category of real property, which distinguishes it from personal property. Personal property consists of items not permanently affixed to the land, such as vehicles, boats, jewellery, furniture, and farming equipment. Essentially, real estate is a type of immovable property, meaning it’s anything that’s firmly attached to the Earth.

Now, why does real estate matter to us?

 It’s not just about the land or the bricks; it’s about the foundation it provides for our dreams and future. Let’s examine the advantages of taking a look at real estate investing.

 1. A Steady Stream of Both Rental Income and Capital Appreciation

Investing in real estate can be like planting a money tree. Properties, especially in bustling areas, can earn you a regular rental income. This could range from a comforting 2.5-3% return from residential properties to a profitable return like 5-8% from commercial ones in India. Beyond just earning rent, the value of your property can increase over time, offering capital appreciation. It’s a dual benefit that not many investment options can match.

 2. A Roof Over Your Head

Real estate investment is more than a financial decision; it’s a personal one. It’s about securing a future home for you and your family, a place where memories are made and cherished. Investing early means you’re not just planning for your future; you’re ensuring a safe and stable environment for generations.

3. Stability in a Turbulent World

In the rollercoaster ride of financial markets, real estate stands out for its stability. Unlike the rapid ups and downs seen in the stock market, real estate markets move at a much steadier pace. This makes it a safe harbour for your investment, preserving your wealth over the long haul.

4. Simplicity and Accessibility

You don’t need a degree in finance to get started in real estate. Its tangible nature makes it easier to understand compared to more abstract investments like stocks. Whether you’re looking to buy a small apartment or a plot of land, the basics of real estate are straightforward and within reach.

 5. You’re in the Driver’s Seat

Real estate gives you control over your investment in ways other options can’t. Want to increase the value of your property? Consider some renovations. Thinking about boosting your rental income? You might adjust the rent. This level of control is empowering, allowing you to shape your investment strategy to meet your goals.

 6. The Power of Leverage

Leverage is a game-changer in real estate. With a relatively small down payment, you can own a property much more valuable than the initial amount you put down. This leverage can magnify your investment returns, making your path to wealth creation faster and more efficient. In India, one only needs to make a 20% down payment and can finance the remaining 80% with a home loan from any bank or NBFC. This 5x leverage increases affordability and eases acquisition. Despite this, home loans are still among the cheapest types of loans available in India.

7. Tax Advantages

Real estate comes with a basket of tax benefits. Let’s say that if you take out a home loan, you can receive tax benefits. This means you can get money back on the interest you pay each year, a portion of the loan amount you’ve borrowed. These benefits come under different sections like 24, 80C, and 80EE of the tax laws.

For instance, if you secure a home loan, you’re eligible for deductions up to ₹1.5 lakh on the principal amount under Section 80C of the Income Tax Act. Moreover, the interest paid on the loan can get you a deduction of up to ₹2 lakh under Section 24. If the home loan is availed jointly, each co-applicant can claim the deductions under section 80C and section 24 individually, effectively doubling the tax benefit to ₹7 lakh combined. 

The Bigger Picture

Real estate is more than transactions and properties; it’s a journey towards financial security, independence, and fulfilling dreams. Whether you’re laying the groundwork for your future home, seeking a stable income post-retirement, or aiming for significant wealth accumulation, real estate offers a path to achieving these goals.

And if you’re wondering how to get started or take your real estate investments to the next level, consider joining a program like Edstate’s 360-degree real estate mastery course. Such courses demystify the real estate market and arm you with the knowledge and skills to navigate the complexities of real estate.

Real estate investment is an adventure that promises not just financial returns but a legacy for the future. With its blend of income, stability, control, and potential for growth, real estate stands out as a smart choice for anyone looking to build wealth over time. So why wait? Explore the possibilities, make informed decisions, and watch as your real estate journey unfolds into a story of success and fulfilment.