Real Estate Investment in Covid Phase





 "If money is the power, then I want it now!"


Does this echo your thought? Then please read it till the end.

At the end of the day, we all want to have financial stability, specially after Covid Episode when entire economy is disrupted, financial stability is the only thing that we seek for. In my last blog " Where to invest during Covid" I gave an exhaustive list of investment possibilities.

Current FD (Fixed Deposit) rate is 5% to 5.4% and average annual inflation rate (1958 to 2021) is 7.29%. What does this mean?

This means what we get for Rs 100 now, we would be getting the same quantity at Rs 107 after 1 year, while if we invest Rs 100 now in FD, after one year it would be Rs 105. This means FD is no more an investment now, as you can see we would be losing money if we go for FD.

Apart from investing in share markets, you may go for Bond market. The risks are far less in Bond as if a company gets bankrupted, then their shareholders might not get back what they have invested, but their bond buyers would. For more details please wait for my next blog but for now let's look into the Real Estate investment scenario.

Should you buy a home now?

With loan interest rates falling to 6.8% you may have started looking for home now. But first think from utility perspective. Do you want to rent it out or you want to live in there?

In case you are looking purely from investment perspective then keep in mind the following:


1. With more and more work from home options, city hub is no more the most sought after place. People are looking for bigger homes amidst nature at lesser rent. Hence, outskirts of city would be the best option to buy a home in case you want to rent it out.

2. Do not compare past price hike of properties in a locality as post Covid entire situation has changed. Instead of price hike trend you may look for area development news like if any hospital or housing society or office area have come up in that place.

3. Buying a bigger plot along with few other people and constructing a residential building would be much profitable for long run. 

In case you want to stay in the home that you are buying then these are the Golden rules:

1. Go for some area which has good connectivity. 

2. Never buy a home at a place which is already developed. If the price is saturated then buying a real estate is loss in the long run. Hence, look for developing area and not developed area.

3. Always buy your home with a home loan, this saves money. How? Well, in case of home loan you are getting the entire property by paying 20% of the property value as down payment. Moreover, over the years you would be paying same emi irrespective of increase of your income.

4. Ideally your home loan emi amount should be 25% or one fourth of your family income. You would be needing the rest of 75% amount for your current expense, sudden emergency & future expense.

Income = Home loan emi + Current Expense+ Liquid cash in store (Both for current & future need)


Enough gyan for now! Let me read about Bond Market till my next write up! Stay tuned!

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