Residential Property Investment has historically been recognized as a potentially lucrative investment asset class, which is why it continues to attract attention around the world. In India, the real estate sector is the second largest employer and is expected to grow over 30% in volume and scope over the following decades.
Forbes held the growth of the Indian real estate sector at 7.0% in 2017, and the housing sector alone has contributed 5-6% of the country’s GDP in recent years.
All this sounds good if you are an estate investor or plan to be a part of the industry. But making money out of the property can still be difficult. It is worth your time to invest in the understanding of the market and the factors that can help to make residential property investment profitable for you.
To get started, let’s not go too deep as to how the real estate investors around the world were able to make millions, but stick to the exploration of opportunities for residential property investment in India that lie ahead.
The most common and most popular source for property investment gains in India comes from appreciation.
To put it simply, the appreciation is the increase in the value of the building that you own. Its location recognizes residential property investment. In India, cities such as Mumbai, Pune, and Bangalore have earned the most satisfactory returns on property. This has repeatedly been confirmed by several leading estate companies and experienced estate investors.
However, it is not the cities as a whole that you should consider but their growth corridors. The property value is appreciated in safe communities, which are complemented by simple transit routes, public transport, shopping centers, schools, hospitals, parks and other public spaces. The more the number of amenities a location offers, the greater the incremental growth of residential property values.
Lucrative Residential Property Investment Areas India
For this reason, Mumbai’s most lucrative property centers are Wadala, Chembur, Andheri, Mulund, Kanjurmarg and Ghodbunder Road in Thane. These are not necessarily the costliest areas in Mumbai, but they offer estate buyers the benefits of good properties from reputable builders, excellent connectivity with various essential parts of the city and decent social infrastructure.
In Bangalore, the areas like Hebbal, Nayandahalli, Yelahanka and Sarjapur Road have seen the fastest appreciation for the same reasons, aside from the fact that there is room for more development. These areas are also relatively affordable and well connected to the commercial hubs of the city, especially in the InfoTech industry, which is the largest economic driver in Bangalore.
In Pune, the best sites to invest in real estate include the slightly more expensive Wanowrie and Kharadi and the more affordable Wakad, Undri, and Ambegaon. These three locations have the advantages of competitive estate prices, a relatively rapid appreciation of the new infrastructure and an excellent link to the many workplace hubs of Pune. Housing projects by well-known developers are very much in demand, not only for the purchase but also for landlords.
The scope of rental income must always be considered while a residential property investment, even if the primary goal is capital growth. Many people buy their investment properties with bank loans, and rental income help pays for some of the monthly EMI expenses. Another advantage of placing an investment property on rent is that the property remains in use, and this assures that the fittings, fixtures, and plumbing are maintained on a regular basis. This is a major factor when the time comes to sell the property.
Every growing location takes time to come to become a full-fledged flourishing market. In the process of renewal, it also attracts increasing demand from home buyers. Meanwhile, every real estate market goes through ups and downs – it is scarce to see sustained growth anywhere, and it can give “low” periods and sometimes even periodic de-growth. For this reason, India is the ideal “investment horizon” – or the time in which you should invest in a property – between 4-5 years or longer if possible.
During this time, considerable growth in the value of a property is more or less ensured, irrespective of market fluctuations. This is the same reason why you should invest in instruments such as mutual funds for at least the period. For the patient investor, who has selected his property after a sufficient market research, profit is never an issue. This is one of the many reasons why in India, property investment remains such a popular way to grow the wealth while achieving financial stability and security throughout.
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