02/02/2013
Advantages of Buying Property Early In Life!!
Does it make sense to purchase property early in life? Or is it a decision you should take in the latter part of the life? Let us look at the pros and cons of both the options. Each view has its justification. Buying property early in life definitely has its attendant advantages.
By far, property is one of the most secured investment options. In all cases, property has witnessed appreciation. So, in case you go in to purchase property early in life, you have created a security for the rest of your life - for yourself as well as for your family. It not only creates an asset, it creates a value-adding asset.
How does it do so? Look at some of these factors. A property can be used to live in or it can be rented out. Either way it brings in cash flows. In case you use it to live in, you save on the high rentals you would otherwise pay. In case you rent it out, you can earn ever-increasing rentals.
TAX BREAKS
In either case, if you take a loan to purchase a property, you will be eligible for tax deduction against the interest paid on the loan. In case of a self-occupied property, the maximum deduction available against the interest paid on the home loan is be Rs 1.50 lakhs. In case the property has been rented out, there is no such restriction on the deduction against interest paid on the home loan.
Moreover, you will also be eligible for a deduction against the principal repaid under Section 80C. So, your tax savings finance the purchase of your property to an extent. You save on tax by repaying a home loan and build an asset for yourself.