What Is the ROI of Investing in Property in Pune
Pune is an ideal realty destination in terms of ROI harvested vis-à-vis your amount invested. Property rates in Pune have already started riding on an upward trajectory after losing traction post demonetization. Despite the premium being fetched by properties currently, healthy rate of return is still assured due to the peak in demand experienced across the city.
How to Assess Your ROI?
Suppose you have invested INR 50 Lakhs for a 2 BHK flat and after 3 years, you sell it off for INR 75 Lakhs. Your apparent ROI is INR 25 Lakhs for investment spanning three years. However, a number of incidental expenses have to be factored in for arriving at the final ROI.
You have to pay upfront stamp duty equivalent to 6% and registration fee amounting to 1% of the property value after purchase respectively. This renders your property mode expensive by INR 3.5 Lakhs. Next, you may have made a down payment of INR 20 Lakhs and the balance amount you had gotten financed at 8.5% per annum.
INR 30 Lakhs loaned for a period of 5 years would require you to shell off INR 6.93 Lakhs as interest over the loan period. Further, monthly maintenance charges (tentatively INR 3-5K per month) have to be borne as per stipulations of the society in which your residential property in Pune is located.
The overall value of your property in Pune, thus, is tentatively pegged at INR 62 Lakhs. Your effective ROI is then INR 13 Lakhs (75-62) and not INR 25 Lakhs. Since property prices in Pune have been forecasted to appreciate significantly by 2021, your decision to invest in real estate would prove to be a monetarily rewarding one.
Expected ROI on Investments in Property
ROI is not only determined by the price you fetch when you put your property for sale. The rental income coming your way from your flat is also an indicator. Since the city has witnessed significant improvement in civic and social infrastructure in the recent past, the rental yields have experienced consistent growth.
The number of software companies is Pune is highest the highest in the country. Pune is also the hot favourite with start-ups as the city has all the trappings to promote their optimum growth during the teething period.
– On the academic front, Pune has the maximum number of colleges within its administrative precincts. Fifty-seven engineering colleges are affiliated to Pune University which is the highest for any city across the globe.
– The NRI population in Pune is also the highest as a significant number of professionals serving abroad have their roots in the ‘Queen of Deccan’.
– The Pune Municipal Corporation’s Development Plan encompasses strengthening of infrastructure within 23 villages recently merged within Pune.
– The work for ‘Pune Smart City’ project is also going on in full swing.
– By 2011, connectivity would get a shot in the arm with the commissioning of Pune Metro.
– ROI in terms of rentals is pegged at 10-15% year on year for areas closer to IT hubs as well as micro markets where new projects are being launched and ongoing projects are getting completed progressively.
1 BHK property in Pune can secure you rent in the range of INR 9K-15K per month based on the liveability index of the area.
Balewadi Sports Complex and Hinjewadi IT Park are the prime locations where ROIs on realty have been most lucrative. Also, Baner, Aundh, and Bavdhan areas feature on the priority lists of potential homebuyers because of steady ROIs projected in the coming years.
Another factor is the heightened interest in properties across Pune among the native NRI population which wishes to remain connected to its roots. Projects which are ‘Ready to move’ or nearing completion are selling like hotcakes among NRIs.
Pune is on the cusp of emerging as a major metropolitan on Indian realty landscape. It is an opportune time for you to buy property in Pune and enjoy steady ROI over the years.