Right Time to Invest In Property This Festive Season

Bangalore: The festival of lights, Diwali is believed to be an auspicious time to invest in property. Though, property is a safe investment option, investing in property always generate returns over time, reports Prabhakar Sinha of TNN.

In India, investing in property is one of the most profitable one, mainly in places like Delhi-NCR. In such regions, annual overall return in the long term fetches around 15 to 20 percent, which is very rare if you invest in other assets. Moreover, the property prices in Delhi and Mumbai are always been high and becoming unaffordable over the time. But, there is a general perception that investing in such property would not generate handsome return which is arguably not true because over the past investing in realty market have been fetching good return on investment.

An important factor which is likely to boost the returns is the possibility of reducing the interest rates in the coming years. The moment the interest rates drop down there will be an increase in capital values for residential real estate segment. For instance, when home buyers borrow money from bank to buy a house at variable rates, their interest burden can come down if the interest rates fall. However, the price appreciation of the house will remain the same. According to experts, if home buyers want to buy a house for accommodation purpose or rental purpose, it is better not to wait for price correction.

Surprisingly, in Delhi-NCR region the rental values have considerably increased over the last few years. The annual rental of an apartment has increased by 3 percent of the capital value compared to 2.5 percent couple of years back. Therefore, an apartment that cost 1 crore will get rental amount around 25000 per month and around 3 lakh per annum. Though investment in under construction project is risky, the chance to get the returns on investment is better.

However, when investing in under construction property, it is better to know about the reputation of the developer and the time for possession. Simultaneously, connectivity is also an important factor to check as god connectivity to infrastructure fetches good appreciation in the future.