Real estate is considered to be the most debated investment. Some thinks it is best for middle-class or lower class as they can invest to buy their own houses through real estate while others thinks it is expensive and one spends his whole life collecting money to pay for the debts. Contradictory view that debts are usually huge, and this makes the investment expensive and a person spends its life to pay for this never ending debt. People have their own point of view but real estate business has boomed over the past few years for a number of reasons. Real estate business do well if a person plans for the budget and finances in advance.
The real estate business has boomed primarily due to availability and ease of finances. In ancient times, mortgages were not introduced but with the passage of time real estate has made it approachable. People can easily buy houses with only 10% down payment and paying the rest installment via installments in developing countries especially. new metro city has also set its goal of providing houses to people of all the sect with just 10% down payment. A large percentage of people buy houses through mortgages all over the world. Loans are provided by the banks. Banks make new money when they give loans. More people buy houses through mortgages, more the money banks make. As a consequence, Inflation comes in the market as a result of this increasing money, wages of people are reduced and the debt burden increases.
When people see others around them investing in real estate, they are urged to see this perspective. People become more interesting to buy houses through real estate to get in with their fellow men. As a result, real estate business flourish. More houses are bought and the growth is seen in real estate.
In real estate, the main figure that carries out important process is broken. Broker negotiate with the seller and buyer and help in conveying information from seller to buyer and vice versa. Broker makes sure that the seller and buyer agree on same terms. As a result, brokers get equal amount of money from both seller and buyer. As broker gets the money from the transaction, this adds to the seller's and buyer's expenditures. In the near future, technology will put in use and the brokers will be replaced by technology. Seller and buyer will use online portals to get all the information free of cost without intermediating brokers. This will also facilitate the online payment between seller and buyer.
If a person buys the house, the house price is not the only payment. There are also additional costs that are included in the expenditures of the house payment. The costs include brokers payment, processing fees submitted to the bank, fees for the complete paperwork for legal approval, and finally the cost needed for the transfer of paper to the owner's name. At other times when the real estate property is bought using borrowed money from the bank, interest also adds extra cost. Interest is calculated from the total amount of money borrowed.
In conclusion, real estate is a lifetime investment and taking into consideration the finances for the future, one can get a good result.