Real estate investment is a very good option these days, since it yields very good returns. There are some important principles to follow in order to get good returns. It depends on the type of property, whether it is a residential property or a commercial property.
Typically, investing in residential property can earn up to 6 percent return per year. This mainly depends on the type of property, whether it is a villa or a residential apartment. It also depends on the following factors:
- City
- developer
- Build Quality
- Mod cons
Investing in a villa gets very good rental values. If you are looking for an apartment priced above 50 lakhs, it is better to look for projects from grade A developers that come with all the modern conveniences. This helps you improve rental value. Connectivity is a very important factor in getting the most out of your rental.
When investing in a property, it is always better to opt for a mortgage loan. This will help you minimize your tax liability and increase your net income. You can deduct taxes up to Rs 1.5 lakhs for the interest paid per year. You can deduct taxes up to Rs 1 lakh for the capital you have paid per year.
In metropolitan cities, apartment values have increased by 200-500% in just 10 years, depending on location, apartment specifications and amenities. Even reselling flats with all the modern conveniences reap greater benefits if they have a very good build quality and have been well maintained.
Bangalore retains the top spot in office space absorption for the past few years. Commercial properties generate returns ranging from 8% to 10% for office space. There are a number of new IT companies emerging in Bangalore these days. Therefore, there is always a high demand for office space in Bangalore. And so, the rental value of commercial spaces continues to rise.
Rental values have been moving steadily from 3% to 9% across India. The retail sector is also recovering quickly, so the return for investors is between 10% and 12% per year. The retail sector is recovering and the return for investors is between 10 and 12 percent per year.
