The rentals have been the key solution to the housing problem in India since ages and are expected to play the same role for times to come. As per a recent report, the rental real estate market that was pegged at one crore units and was valued at $22 billion (Rs 1.53 lakh crore), is expected to be 1.8 crore with valuation $41 billion (Rs 2.85 lakh crore) by 2023.
One can ensure a steady flow of steadily increasing income if one chooses to invest smartly. Here are some of the real estate avenues with maximum rental yields:
Various reports suggest that yields in the affordable homes segment are higher compared to the mid-level or luxury segment. In fact, CEO Magicbricks wrote in ET that across cities, properties priced below Rs 6,000/sqft have an average rental yield of more than 3 percent while properties priced at Rs 6,000 per sq ft or more had rental yields between 2.4% and 3%.
Clearly, from a rental income perspective, it makes more sense to invest in affordable properties.
Apart from lower-priced affordable homes, some locations are also comparatively priced lower than the prime ones. In all the metros, there are some micro-markets where property prices are reasonable and investors can expect good returns. In such micro-rental yield can go up to almost 4.5% as compared to the average yield per sqft of 3%.
In short, markets with cheaper real estate were found to have higher yields. Some of higher rental yield locations are:
- Gyan Khand 2 in Ghaziabad
- Vasundhara Sector 1
- Hosur Road
- BTM Layout
- Toli Chowki
This real estate baby is going to be huge in the coming times. With 30 percent of the population falling in the Millenial category with almost a third, leaving their home towns for further study or work, the co-living segment is bound to grow in leaps and bounds.
The rental yield in such an avenue can go up to 8 percent.