Is it better to invest in properties beyond metros?
Property investment in any part of the country usually does not go to waste, as, in any part of the country, there is a steady rise in the prices of real estate. However, the returns gained more or less at various places may vary according to the region’s development. In other cases, the prices of the property may even decline or else may decline. Thus the investment must be made properly. In metros, there is a consistent demand for housing. While like the other places, the demand may be more or less depending upon the business activity, which may be increase or decline. The investment else than in metros can be beneficial in the tier-II cities, which have future growth potential. The cities like Jaipur, Nagpur, Lucknow, Mangalore, Coimbatore, Indore, Bhopal, Raipur are the ones that have high growth potential. While the tier III cities are the ones that do not have much growth potential as the population, there is declining due to the migration of the people from the smaller towns towards the cities. Also, tier IV and rural places are not worth much benefit.
The other potential area lies in the tourist spots where an investor can gain healthy returns. The places like Goa, Lonavla, Matheran, Pondicherry, Darjeeling, or the coastline of Maharashtra & Karnataka. etc., are the ones which can yield high returns. Many tourists visit these places, and thus the demand for tourism is high. Thus, the property purchased can be used as a holiday home or given for the tourists’ homestay. As these properties are costly, they even yield higher returns on investments. Thus it is also beneficial to invest in tourist spots. Also, home loans can be availed for bungalows, villas, row houses. Etc. The same interest rates applicable for the flat are applicable for the purchase of the flat and the construction of the homes. Thus in case of availability of funds and approval of home loans, it is better to invest in tourist spots or tier-II cities to get good returns on investments. Banks only do not provide loans for the remote or outskirts locations wherein the bank has no network of branches at that place. Looking at investment beyond metros is a better option as the crowded metros surely yield better returns, but looking beyond metros may also yield good returns.
Features of the property investment beyond metros:
- Lower investment better returns:
The investment in the Tier II cities is lower, and thus better and steady returns can be obtained in the developing cities. The prices of the properties in smaller towns are far lesser as compared to the ones in metros. Thus, investing in the flat as a retirement home or else for pure investment is also beneficial. Properties in smaller towns can be obtained at a lower budget, and also home loans can easily be availed for the same, thus making it easy to buy the house. However, it is not recommended to invest in the places where the population is already on a decline as the prices may not rise in such places like the Tier III & rural towns.
- Avail larger area:
The houses in the smaller towns are more broad and spacious as compared to the ones in metros. Thus increase in property prices can yield higher returns on the larger area flat, and thus the investment can be beneficial.
- Easy financing at lower rates:
Home loans can easily be availed at places like tier-II cities and comparatively lower interest rates than metros. Some lenders may charge lower interest rates in places beyond metros and thus can be beneficial. Almost all the leading banks are available in Tier II places, thus making it easy to avail loans easily.
- Better prospects in developing regions:
Though the prices in metros keep on increasing continuously, they reach a saturation point somewhere. However, the developing towns require lower investment, and the prices may grow more rapidly, thus getting higher percentage returns on investments.
We can conclude that for a property investor, it is always recommended that investing in properties beyond metros is always a better option as the prices of the property are lower thus, an investor can buy the flat even in case of low budget and get higher returns in percentage in the Tier II cities or else tourist spots. However, it is not recommended to invest in smaller towns.