Investing in residential real estate is one of the most popular ways of wealth generation in India. People look forward to buying residential property at affordable rates to earn significant returns when the values appreciate. Leveraging on the high demand of affordable residential realty, developers are launching a number of such projects.
In a recent interview with the Financial Express, property consultant JLL India said that it makes sense to buy properties that fall between Rs 2,500-5,000 per sq ft. Such a value provides benefits of no capital value erosion and stands affordable for the mid-segment buyers. However, JLL chairman Anuj Puri further added, the investors must restrict themselves to Tier-I and Tier-II cities.
Of late, there has been a lot of transformation in the overall rules and regulations pertaining to the real estate industry. Coming of Real Estate Regulatory Authority (RERA) and the passing of real estate bill have added transparency to the industry encouraging more people to invest in property. Also, the 7th pay commission improved real estate demand from government employees. Relaxation in FDI norms, tax sops and easing of home loan regulations have further added liquidity in the market. In the coming time, there will be innumerable real estate projects in the market offering more or less the same facilities.
It is important for the buyers and investors to judge a property on several parameters before signing on the dotted line. Such parameters include location, affordability, price trends, value appreciation prospects, state of social infrastructure, sufficient economic activity, nearness to the commercial areas, and many more. The value appreciation prospects of a property are affected by several other factors including builder’s background, demand-supply dynamics and the delivery timeline. Therefore, a good location and property research is mandatory.
Since the real estate industry is experiencing a revival, buyers are again turning into investors. NCR, Bangalore, Kolkata, Chennai, Nagpur, Navi Mumbai, Ranchi, Lucknow and Dehradun are good property investment destinations. If one invests in the right property, he is expected to earn an appreciation of 15 percent year on year. However, several other macro-economic factors also have a role to play.
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