Financial independence and investment are two things that are invariably tied together. You cannot have one without the other. So what makes it so essential for women to invest in real estate? How can this path lead to greater financial independence that women have forever struggled with?
In today’s blog, we explore these questions and try to find appropriate answers to them.
Here are 7 reasons why women should start investing in real estate!
Increased home loan eligibility
A big percentage of home buyers and investors apply for a home loan in order to buy different kinds of property like a plot in Mannivakkam or a flat in Chennai. But did you know that women receive extra benefits from banks on opting for a home loan? Yes, that’s right. The general rule dictates the amount of sanctioned loan is determined by the total annual income and cash inflow of the borrower. Hence, when a woman signs up for a loan as a co-borrower, the chances of getting a higher amount of loan is increased. This increase in eligibility is applicable to residential and commercial real estate.
Lower rate of interest
Almost all major banks and NBFCs in India provide a discounted interest rate to female borrowers. The common notion behind this step is women are more efficient in handling money and have proved to be more responsible with the loan repayment. This makes them ideal candidates for investors and borrowers of home loans. So if you are considering to opt for a home loan as a female investor and want to opt for a home loan from the State Bank of India for buying plots in Mannivakkam, this is a good time. SBI has waived the processing fee on home loans for women investors. Again, HDFC has come up with a different home loan option that is solely for women borrowers. This will turn your dream of buying Mannivakkam land for sale into reality. They have only enforced one mandate
- A woman has to be the sole applicant for the home loan, or
- She has to be the first co-applicant in the documentation of the loan
Some banks also offer a discount of 0.05% to 0.25% on the basic rate of interest when a woman applies for a loan or is the co-applicant in a joint loan.
Concession on stamp duty
Whenever a woman chooses to invest in property, they have the benefit of a significant reduction of additional charges. In many states, the cost of registering a property for women is at 4% while others have to register the property at 8%.
Tax benefits
Borrowers who invest in property are eligible for claiming a tax deduction of up to INR 2 lakhs on the loan amount availed to either build a home or buy it. But for jointly owned properties, each spouse can claim for it separately on individual tax deductions. People who were able to buy a house between April 2019 and March 2020 were able to claim an additional deduction of INR 1.5 lakh (given the property in question was under INR 45 lakh).
Advantages under the PMAY scheme
To encourage more women to invest in properties and become homeowners, the Government of India announced the introduction of a scheme called Pradhan Mantri Awas Yojana. For sole female ownership of property, the Government provides a subsidy that can go up to INR 2.67 lakh.
Securing financial assets
The place of women in the country is still precarious. Hence, having a strong financial portfolio is the first step towards the improvement of women’s lives. There are also some added advantages of having one’s wife as a co-owner of a property. In cases of bankruptcy, the bank will not be able to claim a house that is registered in the name of the wife. However, this is only applicable for loans that do not have the name of the wife as a co-applicant or guarantor for any loans given out to an individual.
Easier mutation of property
Whenever a property is jointly owned by a couple, they are individually eligible for legal property rights. In case of the death of one spouse, the surviving spouse becomes the natural owner of the property. This also removes the chances of the woman being removed from the property as she becomes the legal owner. Moreover, one can also save a good deal of money by avoiding the additional charges of property mutation.
Does investment lead to financial independence?
Investment is a big part of financial independence along with budgeting, saving, and planning. Say you want to buy plots in Mannivakkam, it is a great decision that you can go ahead with quite early in your adult life. Investment is not just a tool to improve your portfolio, it also works as a reliable source of income as you will be making money even in your sleep. With growing inflation, your investments will serve you as the vehicle that keeps your savings safe and helps them grow.
To conclude,
Finding the proper investment strategies is the key to successful investment. And finding the right strategy will depend on how much risk you are willing to take and what are your
investment goals in the long term. Some more questions that you need to ask whether you want to be an active or passive investor. If you are leaning towards high-risk portfolios, then you would need to adopt aggressive strategies and end up with high rewards. But, be prepared for ups and downs. Low-risk portfolios might not bring high rewards, but they are less volatile.
