News: 3 quick takeaways for residential real estate investors-08.01.2017

3 quick takeaways for residential real estate investors

Demonitization may have stumped real estate activities but there is no reason for investors to slacken their stance. Yes, the market might predictably not have momentum today or in the days to come but there is a lot to do.

Rental yields

As an investor study rental yields of the properties that you have invested in. Rental Yield represents annual return from renting your house in that locality.

Your property purchase will become a performing asset only once it starts giving you rental returns. Property portals give locality rental yields which are easy to track. Once the market gets back to normalcy, you would be one of the early birds to grab the opportunity when prices are still low.

According to Magicbricks data, following are the top 5 localities of Delhi, Bengaluru and Mumbai.

Delhi: Among the localities in New Delhi that have shown a high growth in rental yield in past 9 months, Tilak Nagar tops the list with 30.9 percent growth, followed by Safdarjung Development Area with 30.6 percent growth, New Friends Colony with 28.0 percent growth, Kailash Colony with 19.5 percent growth, and Sainik Farm with 7.9 percent growth.
Bengaluru: Among the localities that have shown a high growth in rental yield in past 9 months, New Thippasandra tops the list with 55.1 percent growth, followed by Vasanth Nagar with 47.7 percent growth, Airport Road with 28.5 percent growth, Hebbal Kempapura with 20.2 percent growth, and B Narayanapura with 19.1 percent growth.Since the purpose behind your purchase is earning returns, therefore keep a track of the prevailing circle rates of localities. The cost of your property depends upon the current rates amongst other factors. Therefore, keep yourself informed.

For rookies, the market rate and the circle rate should be in tandem with each other. A disparity in the rates will hurt investors. Low circle rates fuel cash deals which in times of demonitization will pose a problem. High circle rates force buyers to pay extra stamp duty.

If you have held on to your proposed property purchase because you believe prices are coming down soon, make a list of those properties you wanted to buy. Search them and identify them on property portals and set a price alert for yourself, very similar to what stock buyers do. Real estate portals are offering mobile applications which denote the price movement of localities. These applications alert you as soon as property value reaches the level at which you are ready to buy.

Source: Economic Times, Magicbricks Bureau.