Systematic Investment Plans for Real Estate

Starting from the very basic, wealth creation has always been tagged as one of the most difficult processes. Deploying money in the right manner leads to real value accreditation in the long run, in a way that the rate of return on the money exceeds the rate of inflation. SIP is the per fit for this phenomenon. As per property experts, SIP is a specific amount, which is invested at regular intervals for a continuous tenure

To cut the long story short, the idea is to invest in such a manner that the purchasing power is always more than what the inflation has destroyed. In terms of real estate, it enables the investor to procure units as per a pre-decided notion. SIP allows an investor to decide the amount and the scheme to pour money in. Owing to the principle of cost averaging in SIP, more number of units are purchase in a falling realty market and lesser units in a rising market.

Role of SIP in real estate

One of the common questions asked is how a systematic plan can be set up in real estate. For starters, in a systematic plan, an individual can periodically channel their savings into proper investments. For instance, an individual takes a home loan to buy a house. The equated monthly installment towards reimbursing the home loan is the systematic investment in the realty sector.

After repaying the home loan, one can go for a ‘second home’, if the down payment is affordable or a piece of land can be bought using bank loan. As per experts, repaying the home loan every month enables an individual to maintain the equity in real estate. Although, Real Estate Funds do not offer the Systematic Investment Plan option and the payment is typically 10 percent upfront and 22.5 percent every six months, it proposes a simple way to deal with investment inertia. SIPs effectively and in a systematic manner, channel the monthly savings of an individual into proper investments, yielding lucrative returns.