Futuristic Investment

The demand for more capital appreciation in the wake of the rising property prices coupled with home loan rate hike has dampened the buying spirit, in ways propelling the demand for rental property in India, realizing the immense potential of rental properties in India. Rentals values in tier I & II cities has witnessed an increase of 20-25% in recent times, resulting in real estate agents devoting themselves to negotiations for rented homes more than ever. The capital value or cost of flats has almost doubled in the tier I cities where prices went up twice that earlier, in the residential segment.

Residential rentals for flats/apartments, independent houses and paying guest accommodations being more popular in tier I and II cities, have far greater avenues for those who are on transferable job or looking for job opportunities. This has created a good market for those seeking to invest in a property for rental purposes, ensuring good rentals regularly. Terrace flats, luxury apartments and home, bungalows, villas, penthouses and condominiums are gaining ground as a popular choice; and considered a safe investment option.

Trends in the commercial sector are momentous as the key focus among the investors is to rent a commercial space instead of buying and facilitating low risks and less worry on maintenance. Commercial lease agreements are long-term, hence buying good space in high-quality development and leasing it to a good brand is a wise investment decision. Usually, commercial lease agreements specify a 15% escalation in real estate rental every three years which is a good enough yield.

For those considering regular rental returns rather than capital appreciation, mall space has the distinction to be an excellent option. Real estate developers are in favor of leasing out commercial property. Service Apartments which come in the form of furnished apartments have also become in vogue. Moreover, the commercial rental market is witnessing the rising trend of mixed use developments. The product mix will have malls and office spaces with service apartments. Some of the companies are setting a trend of leasing out their service apartments.

The present scenario of leased out industrial properties/ plots of land for projects and that of the residential apartment rentals is looking up. The new concepts being developed are redefining the traditional ideas that were synonymous with rental market in India. In future, a constant watch on rental developments in India will provide serious opportunities which will spell the success of the real estate rental business.

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