Budget or Luxury Property: Which is a Better Investment?

Budget or Luxury Property
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Budget and luxury properties represent the two ends of the real estate market. Both of these segments have their own market dynamics and you need to understand them carefully before you make any investment decision. If you have a huge amount invest, then you can approach a reputable real estate dealer in Delhi or any other place of your choice to buy a big luxury property or a number of small budget properties. The real questions arise which one of this investment will give you the maximum return. For this, you need to look at both of these segments of the property market carefully and make the exhaustive cost-benefit analyses to figure out which is the best choice.

Luxury property

There are several luxury residential projects in Delhi that offer different comfort features. Now we know that luxury is a subjective term and may depend upon a lot of factors. However, if you look at it carefully and you’ll find that a luxury property has several things going for it. These include:

  • Prime location
  • Price
  • Square footage.
  • High-end interiors
  • Professional quality kitchen
  • High-tech fitness center
  • Spa
  • Swimming pool
  • Exclusivity
  • Highly secure gated community

These are some of the features that make up property luxurious.

What makes them such attractive investment options?

There are many luxury residential projects in Delhi that are fantastic investment options for a number of reasons. These properties are in high demand by the crème de la crème of the society with deep pockets. While investment in these properties requires a huge amount of capital. If you have the requisite amount, then you will find that they promise a fantastic ROI. Here we have explained some of the benefits you could get if you invest in these properties.

1). the luxury properties can be best described as performing assets. The advantages associated with investing in such property are that the price of the property increases greatly over a period.

2). the number of wealthy individuals/families on the rise in India. As the Indian economy maintains its high performing trend, more and more people will come into the upper-income bracket. This, in turn, will increase the demand for such properties, which in turn will increase their price significantly.

3). With Indian economy opening up like never before and FDI in the economy increasing rapidly, more and more foreign companies are looking to shift their base in India. These companies are looking for houses that offer them excellent facilities and they are willing to pay top dollar for such properties. This has added to the positive outlook of the luxury property prices in India.

The drawbacks of investing in luxury properties.

While investing in luxury properties have several advantages there are also several disadvantages associated with them. Some of these disadvantages are mentioned below for your greater understanding.

1). Indian economy is at a developing stage and the number of people who can afford a luxury house is very small. This small market of luxury houses ensures that the price rise in this sector is not dramatic.

2). One of the drawbacks of investing in luxury properties is that if due to some macroeconomic reason the economy of a country stagnates, then the price of these properties will fall very sharply.

3). Maintaining these luxury apartments is a very costly affair. The high percentage of depreciation on these properties will push you in red with any sharp change in property prices in the downward direction.

What is a budget property?

Budget property refers to those assets rise is at a level that makes them affordable for those people whose incomes are below the median household income.  If we compare them with the luxurious properties, then we will find that there are several differences. Some of these are mentioned below.

  • They are not built in prime locations
  • The prices are comparatively low
  • Interiors are sparsely furnished
  • Security is not so tight
  • Smaller in size
  • Only provide the basic amenities

Why are budget properties such an attractive investment option? property

There are several reasons that make a budget property such an attractive investment option. Some of these are mentioned below for your ready reference.

1). The intense focus of both the Centre and the State government on providing affordable housing for the masses has improved the business model relating to budget housing.

2). the tax break and easy finance option have made budget housing a great investment proposition.

3). India has a large emerging middle-class population that requires housing at a comparatively lower price. This huge demand has created immense potential for budget housing in India.

4). as the price of the budget, houses are cheaper any people from the low-income group can afford to get loans on easy terms from the banks for their purchase. This has created a very good demand for budget housing in India.

What are some of the drawbacks of investing in budget properties?

While budget properties have several advantages going for them. There are also some drawbacks, which you need to take into account before you make any investment decisions. Some of these drawbacks are mentioned here to help you make a sound investment decision.

1). as these properties are meant for your own middle-income families, the price escalation for them is not that high.

2). you have to ensure that the property you buy for investment purpose is made up of good quality materials. If it is for the not, then you have to pay any money for their repairs later on.

3). Sometimes it is hard to sell these properties, as they are not located in a good place or the customer finding it difficult to arrange finance for the property.

The above points indicate the pros and cons associated with buying a luxury property for investment purposes. These points will guide you to make the intelligent decision on where you should invest your capital to get the best ROI. It is essential that you take all the factors regarding the property like the property location, infrastructure, price, condition and legal status that you wish to buy before you make the investment decision.