Real estate saving a great retirement tool

The phrase “as safe as house” continues to be a great retirement saving option in Indian real estate. There are three factors that support real estate as saving option for retirement. First is housing shortage in India, second tax regimes and last favorable demographics that make borrowing to buy a house easier. While for a large section of population this is clearly not an option as the realty prices are too steep. However for people with good cash flow and enough savings buying house is comparatively easier. The Lehman brother crises recently in 2008 and before that correction in property prices in late nineties raised lot of doubts in minds of people but majority of financial planners still support real estate as a tool for retirement. Buying a house should be a top priority for people who do not own a house yet. There are number of factors like capital appreciation, cash flow and tax bracket that would tempt the homeowners who are in high tax bracket to look for a second home. A second house in which you don’t live, the notional rent that you earn is taxable. Most of the people take loan to buy house and then they rent out the place.