Want to earn better returns on real estate investment? Follow these 5 tips!

Successful investment is managing the risks, and not avoiding them. While you’re at it, these risks might sometimes prove to be the opportunities for growth as well. The pandemic years of 2020 & 2021 have indeed given all of us some valuable lessons on savings, risk factors in business, investment, sustainable revenue generation models, asset building & so much more. Conclusively, we can say that overall as we come close to the end of 2nd pandemic year, each one of us is definitely more cautious and keen when it comes to saving for their future.

One of the most widely preferred industries that have been known for giving promising returns in the long term has been real estate. The sector is not just the second largest employment generating sector of India, but it has also witnessed one of the sharpest and fastest recovery post the second wave, and continues to stage a solid performance.

As per recent data released from JLL India, housing sales has witnessed 124% plus on-year jump in top 7 Indian property markets & 5.85 million sq. ft net office absorption, while office leasing is up 48% sequentially and 8% on-year. The higher vaccination rate, lower infection rate, record low home loan interest rates, and increased hiring in organized IT sector bode well for the realty. However, For a newbie who is willing to maximize his returns while making a real estate investment for the very first time, here are a few tips that will help him get better returns.

Seek developing infrastructure nearby

Some of the most prominent infrastructure developments when looking at investing in a property can be an expressway, highway, metro station, airport etc. If we consider the Delhi NCR market in present times, Delhi Mumbai Industrial Corridor, Yamuna Expressway, Jewar Airport, Dwarka Expressway are some of the prominent infrastructure developments that have the potential to deliver a new horizon of growth for investors. An appreciation to the tune of 100% is expected in the coming 10 years as these infra marvels get completed and get operational fully. The residential/commercial pockets located near these establishments tend to become highest rental income generating hotspots, and if one wished to sell them off, the returns are massive compared to their initial investment.

Promising employment avenues

With the growing infrastructure, come increasing avenues for employment. The nature of urban metro crowd is to rush towards the areas where there is a scope and diversity of job opportunities available, this movement also tends to dictate the establishment of other service sectors. Thus, investing in commercial units located in proximity to industrial hub is the best option.

Under Construction V/s Delivered

When one puts one’s hard-earned savings in an under-construction property, the price points are much lesser than delivered project, the scope of price appreciation is much higher as it nears completion. It is only due to the simple fact of developer ownership. The RERA has specific guidelines of timely delivery, so the investment made is worth the wait and secure as much higher benefits can be procured once the project is ready to move. There also comes flexibility in making the payments with an under-construction property.

Branded developers: Seal the deal

Branded developers not only come with a vision for their project, but there is also a strong reliability factor due to their prolific track record. The listed players specially performing well in the stock market offer better returns on their projects as compared to a new player. It is always better to go for branded developers when planning to enter a property transaction for investment purposes.

Preferred location unit: The underrated element

A park/pool/road facing unit will have an additional charge called PLC (preferential location charges) that a person has to pay while booking the unit. These charges reap benefits in the times of renting, selling out the property as they tend to have a slightly higher appreciation than the rest of units. The value of the units demanding PLC only tends to rise as time passes by, as they have a layout advantage when compared to other units of the project.

(By Siddharth Maurya, Resource Specialist – Real Estate and Fund Management)