How To Profit From Residential Property Investment

Kishor Pate, CMD – Amit Enterprises Housing Ltd.

Real estate has historically been acknowledged as a potentially lucrative investment asset class, which is why it continues to draw attention all across the globe.

In India, the real estate sector is also the second-largest employer and is estimated to grow by 30% in volume and scope over the coming decade.

Forbes pegged the growth of the Indian real estate industry at 7.0% in 2017, and the housing sector alone has been contributing to between 5-6% of the nation’s GDP over the past couple of years.

All of this sounds good if you are a real estate investor or planning to become a part of the industry. But making money out of real estate can still be tricky territory. It is worth investing your time into understanding the market and the factors that can help make residential property investment profitable for you.

To start off, let’s not go too deep into how property investors across the globe have been able to make millions, but stick to exploring the opportunities in residential property investment in India that lie in front of you.

The most common and popular source of residential real estate investment profit in India comes from appreciation. To put it simply, appreciation is the increase in the value of the residential property you own. Residential property for investment appreciates according to its location.

In India, cities like Mumbai, Pune, and Bangalore have been garnering the most satisfactory returns on residential investment. This has been time and again been confirmed by various leading real estate research firms as well as experienced real estate investors.

However, it is not the cities as a whole that you should consider, but their growth corridors. Residential property values appreciate in good neighborhoods which are complemented by easy transit routes, public transport nodes, shopping centers, schools, hospitals, parks and other public spaces, and more.

The more the number of amenities a location offers, the greater is the incremental growth in residential real estate values. For this reason, Mumbai’s most lucrative residential property investment hotbeds have been areas like Wadala, Chembur, Andheri, Mulund, Kanjurmarg and Ghodbunder Road in Thane.

These are not necessarily the most expensive areas in Mumbai, but they offer property buyers the advantages of good properties by reputed builders, excellent connectivity with various important parts of the city and decent social infrastructure.

In Bangalore, areas like Nayandahalli, Hebbal, Yelahanka, HSR Layout and Sarjapur Road have seen the fastest appreciation for the same reasons, apart from the fact that there is a lot of scope for more development.

These areas are also relatively affordable and well-connected to the city’s commercial hubs, predominantly those in the Infotech sector which is the biggest economic driver in Bangalore.

In Pune, the best locations to invest in residential property include the slightly pricier Wanowrie and Kharadi and the more affordable Undri, Wakad and Ambegaon.

The latter three locations have the advantages of competitive property prices, fairly rapid appreciation because of new infrastructure coming in, and excellent connectivity to Pune’s many workplace hubs.

Residential projects by reputed developers are in great demand here, not only for purchase but also from rental housing seekers.

The scope for rental income must always be considered while making a residential property investment, even if the primary objective is capital appreciation. Many people purchase their investment properties with bank loans, and rental income helps pay for some of the monthly EMI outgoings.

Another benefit of putting an investment residential property out on rent is that the property remains in use, and this ensures that the fittings, fixtures, and plumbing are regularly maintained. This is an important factor when the time comes around to sell the property.

Every growing location needs time to come into its own and become a full-fledged flourishing market. In the process of getting upgraded, it also draws increasing demand from homebuyers.

Meanwhile, every property market goes through its ups and downs – it is very rare to see sustained growth in any location, and there will be ‘low’ periods and sometimes even periodic de-growth.

This is why in India, the ideal ‘investment horizon’ – or the period of time for which one should remain invested in a property – is between 4 to 5 years or longer if possible.

In this time, considerable growth in a property’s value is more or less assured regardless of market fluctuations. This is the same reason why one should remain invested in instruments like mutual funds for at least the same period.

For the patient investor who has chosen his or her property after enough market research, turning a profit is never an issue.

This is why in India, residential property remains such a popular route to growing one’s wealth while simultaneously attaining financial stability and security.

About The Author

Kishor Pate, Chairman & Managing Director of Amit Enterprises Housing Ltd. is the driving force behind one of the most successful real estate development firms in Pune and beyond. Apart from its signature luxury projects like Montecito in Sahakar Nagar and other premium gated townships, AEHL has also launched highly successful affordable housing projects like Astonia Classic and Colori in Undri and the Mediterranean-style township Astonia Royale in Ambegaon.

What Lies Ahead For The Pune Property Market

Kishor Pate 2Kishor Pate, CMD – Amit Enterprises Housing Ltd.

Pune’s real estate market is the stuff of legend, and justifiably so. All the five main verticals of the property sector – residential, commercial office space, retail and hospitality – are performing optimally in Pune.

This is by all standards an exceptional real estate market. Moreover, Pune is always growing and adding to its geographical spread, making it by far the largest and most vibrant real estate market in Maharashtra and beyond.

Therefore, it comes as no surprise that investors from Mumbai, dissuaded by the high property rates and slow market conditions in the financial capital, are extremely active in Pune.

Apart from these, there is a constant flow of investments coming in from other Maharashtrian cities like Nanded, Nasik, Sangli, Kolhapur, Nagpur, Jalgaon and Amravati. As a result, the Pune property market is extremely resistant to stagnation.

Know what drives demand

The huge degree of job creation the city’s manufacturing, automobile and Infotech and services sectors is causing inward migration from almost all parts of India and very rapid absorption of commercial office spaces.

This, in turn, is constantly ramping up residential property demand as well. Additionally, thanks to its many educational institutions, Pune boasts of constantly replenishing talent pool which fuels the growth of all the sectors active in the city.

Because of the multidimensional growth drivers that the city enjoys, the Pune residential property market is quite resistant to the severe demand fluctuations being seen in a number of other cities.

However, successful investment into the Pune residential real estate sector still calls for knowledge about what works, and what doesn’t.

Pune_India

Know where to invest

Like in every other city, Pune’s residential property sector sees the most rapid impetus in pockets or locations that are still developing. It is primarily in these emerging locations that we find the most real estate activity, both its terms of development and demand from buyers.

Areas like Undri, Ambegaon, Keshavnagar and Bhugaon have already established themselves as Pune’s fastest-growing new suburbs. The growth of such locations also serves the important purpose of decreasing demand and development pressure in the central regions. However, even in these areas, there is danger lurking for uninformed property investors.

In many of the emerging residential property destinations, we have seen a huge load of housing projects where construction has either been stalled or delayed far beyond the initially committed completion timelines.

Investors and end- users who bought into such projects at the pre-launch phase to take advantage of attractively low rates have literally become stuck along with the projects.

Know your developer

In Pune, the difference between beneficial and hazardous housing investment lies primarily in the reputation and credibility of the developer. While credibility is a much-abused qualification that almost every developer lays claim to, it is actually quite simple to verify.

One merely needs to examine the builder’s track record of successfully completed housing projects. ‘Successful completion’ does not mean ‘eventual completion’, but completion within 1-1.5 years of the delivery timelines promised to buyers.

RERA Compliance – the new Gold Standard

With the Real Estate Regulatory Act (RERA) slated to finally become a nation- wide reality by mid-2017, Pune’s residential real estate market is going to become more vibrant and lucrative for property investment than ever before.

Thanks to this key reform in the real estate sector, the city is set to shed a lot of its ‘bloat’ – or burden of small-time, inexperienced builders out to make a quick buck with small, shoddily designed and executed projects which are also often of dubious legal status.

Such players will simply not be able to sustain operations post-RERA, and will vanish from the market.

What will remain are builders of good repute, market standing and track record – credible players who are able to abide by the strictures that RERA lays down to protect the interests of buyers and investors.

While this landmark is understandably a source of fear and trepidation for fly-by-night builders, it heralds the even more powerful emergence of strong, credible developers.

About the Author

Kishor  Pate, Chairman & Managing Director of Amit Enterprises Housing Ltd.  is the driving force behind one of the most successful real estate development firms in Pune and beyond. Apart from its signature luxury projects like Montecito in Sahakar Nagar and other premium gated townships, AEHL has also launched highly successful affordable housing projects like Astonia Classic and Colori in Undri and the Mediterranean-style township Astonia Royale in Ambegaon.

Pune Property: All Roads Lead to Ambegaon

Kishor Pate 2Kishor Pate, CMD – Amit Enterprises Housing Ltd.

No discussion on Pune’s property boom locations is complete without an extensive evaluation of Ambegaon.

An increasing number of Pune’s homebuyers are opting for areas with generous natural endowments and absence of the crush of the city’s central areas.

As Ambegaon offers superb connectivity in addition to a green, hilly environment, it has naturally emerged as one of the most favoured property locations in Pune.

As a matter of fact, Ambegaon will be one of Pune’s most exciting property boom regions for several years to come during the following ten years.

Apart from its abundant greenery, the backdrop of hills and excellent connectivity, it is also an eminently affordable location.

Moreover, it offers a good spread of housing options, from multistoried apartment projects to luxury townships.

Ambegaon is also close to the new MIDC in Shirval, which is a massive employment hub which has given rise to ever-increasing demand for both budget and premium homes here.

Some of Pune’s leading developers have responded to this demand with projects that bear the brand of reliability, are very suitably priced and additionally offer tremendous investment appreciation value.

The growth of Ambegaon has been partially because of the spill-over demand from Sinhagadh Road, which has developed very rapidly and seen unattractive price growth as a consequence.

But one of the leading factors for Ambegaon’s quick rise to fame has been the fact that it gives property buyers a diversified choice of homes, ranging from premium bungalows and villas to budget flats.

This location’s natural ambience and absence of congestion and pollution lend it a distinct aura of exclusiveness, simultaneously providing homebuyers a welcome option to live and raise their families in bracing, naturally blessed surroundings.

Residential areas with the kind of abundance of trees and green open spaces available in Ambegaon are home to healthier and happier people, and have a cooler climate than the inner-city concrete jungle.

It is no accident that Pune’s core city dwellers tend to be more susceptible to suffering from conditions like asthma, bronchitis and hypertension – most of the city’s previously splendorous green cover has been eroded by real estate development.

In contrast, Ambegaon is a haven of peace, calm and greenery – the hallmarks of Pune’s glory years.

Moreover, Ambegaon is constantly seeing upgradation of its support infrastructure by the Pune Municipal Corporation – a very important factor driving property investors’ interest in this location.

Investment appetite here is also because of the accelerated development of places like Bavdhan, Sinhagad Road, Wagholi, Bhugaon and Undri.

These locations have for long been catering to the demand for quality housing coming from employees of Pune’s Information Technology sector, but Ambegaon additionally gains from its proximity to the Pune-Mumbai Expressway, the famous Sinhagad Technical Institute and the Bangalore Bypass.

In other rapidly growing locations of Pune like Baner, Wakad and Hinjewadi, the predominant demand for investment properties comes from neighbouring Mumbai.

Ambegaon, on the other hand, has unique location advantages, Ambegaon is also a hot favourite with investors from cities like Sangli, Satara, Kolhapur and Shirval.

About The Author

Kishor Pate, Chairman & Managing Director of Amit Enterprises Housing Ltd. is the driving force behind one of the most successful real estate development firms in Pune and beyond. Apart from its signature luxury projects like Montecito in Sahakar Nagar and other premium gated townships, AEHL has also launched highly successful affordable housing projects like Astonia Classic and Colori in Undri and the Mediterranean-style township Astonia Royale in Ambegaon.

What Has Led To Pune’s Affordable Housing Crunch?

Kishor Pate 2Kishor Pate, CMD – Amit Enterprises Housing Ltd.

No discussion about the hottest real estate markets in India today is complete without a generous reference to Pune. In fact, Pune is one of the most-talked-about and desirable places in India to live and work in today.

People are attracted to this city because of its vibrant job market, the much more clement climate and environment when compared to the neighboring financial capital Mumbai, and – very importantly – the superior quality and spread of options in housing.

However, there are some important factors that property buyers who are not familiar with Pune should be aware of so that they can make the right choice while buying their homes here. Pune is doubtlessly a marvelous place to live in, but this has over the recent years actually become a problem.

The areas closest to Pune’s business district and Information Technology hubs have gained attention for being the most desirable places to buy or rent a home in. However, as the popularity of these areas increased, so did the cost of living.

Because these areas are seen as high profile and naturally attract people from the higher income brackets, most of the housing supply there is now in the premium segment. The property rates of such housing also drive those of non-premium housing upward.

It is not only real estate prices which are affected in these locations, but the overall cost of living. The high property prices in these areas mean that shopping outlets, entertainment centers, restaurants and healthcare facilities all have to pay much higher rents.

Astonia Classic in Undri
Astonia Classic in Undri

The higher costs are directly passed on to the customers in these catchments. Moreover, because of the overall premium ethos of these locations, they tend to attract retail, hospitals and F&B outlets which cater primarily to high-income customers.

True, Pune is one of the most vibrant cities because of its high lifestyle quotient, spunky neighborhoods and Information Technology hubs. Unfortunately, the very residents who made the city this upscale, happening place where everyone wants to live and work are now challenged by the increased property prices and cost of living. In Pune, affordable housing options are becoming fewer and far between.

As a result of the rapidly increasing capital values, housing rents in the most popular areas have also been rising inexorably, and this trend shows no signs of stopping anytime soon. Right-priced housing is decreasing because of the swanky new apartment buildings in the more happening locations.

Pune’s inner locations and those closest to its IT hubs now have no affordable housing left for people to buy, even as the influx of new renters in these limited areas drives up demand and prices for a limited amount of units available for rent.

The only solutions would appear to lie in Pune’s far-flung outskirts, where land is still cheap and developers can keep their prices low. However, these areas are also very far from most of the city’s workplace hubs, and also lack the kind of support infrastructure that makes decent living possible. Fortunately, Pune still has a small handful of locations which are neither too remote not too costly for budget home buyers.

Among these, Undri in the Southeast of the city and Ambegaon in the Southwest are two of the best-connected areas which are still receiving a decent supply of affordable housing and also rapid infrastructure deployment. Keshavnagar and Manjri in the East are also still quite affordable, though relatively less enabled in terms of infrastructure.

These locations offer home buyers the benefits of rational housing prices as well as very good connectivity in terms of road network, public transport and proximity to good schools, shopping, entertainment and affordable healthcare.

About The Author

Kishor Pate, Chairman & Managing Director of Amit Enterprises Housing Ltd. is the driving force behind one of the most successful real estate development firms in Pune and beyond. Apart from its signature luxury homes towers and premium gated townships, AEHL has also launched highly successful affordable housing projects like Astonia Classic and Colori in Undri and the Mediterranean-style township Astonia Royale in Ambegaon.

New Fuel For The Property Boom At Ambegaon

Kishor Pate 2Kishor Pate, CMD – Amit Enterprises Housing Ltd.

No discussion on Pune’s real estate boom areas is complete without an extensive examination of Ambegaon. This fertile and rapidly developing area is rapidly turning out to be among the most energetic property boom regions in Pune.

More of the city’s home buyers are now opting for properties in areas that offer uncluttered and bracing environment. Ambegaon is one of the most favoured locations in this respect, as offers generous greenery and hilly surroundings as well as excellent connectivity.

Ambegaon has also come into the limelight by emerging as a magnet for home seekers with religious inclinations. The Veeraliyam Temple located in Ambegaon, has by now been drawing worshipers from Pune, Mumbai, Chennai and beyond for over three years. Fully equipped with a ‘Goshala’, ‘Dharmashala’ and ‘Bhojanshala’, this very important Jain temple has a capacity to accommodate 500 visitors at a time and distributes ‘prasadam’ thrice a day. The temple was launched by its trustee Mr. Chhaganlal Gundesha, who donated his personal property for this unique place of worship which, though primarily for Mahaveer Jains, is open for all communities.

Likewise, Ambegaon will soon boast of its very own Swaminarayan temple – again primarily a major worship destination for Jains but an attraction for all religions. This temple will be spread over a massive 27 acres at Narhe, Ambegaon and be a focal point for followers from Gujarat, Mumbai and Pune.

Its development as a religious destination has added a completely new facet to real estate at Ambegaon and is now creating demand for homes across all typologies and budget segments. Yearly appreciation has so far been clocking in at between 20-25%, but with the arrival of these major temples, Ambegaon has now become an investment hotspot that will have few precedents in Pune over the next five years.

Historically, the real estate market in Pune is eminently suited for diversified offerings in a single location, and the areas that work best are those that offer buyers multiple options in terms of configurations, sizes, budgets and positioning.

Today, Amit Enterprises Housing Ltd. has recently launched new phases for both its budget homes project Astonia Royale and Bloomfield, the premium Singapore-themed township.

Amit's Bloomfield at Ambegaon
Amit’s Bloomfield at Ambegaon

Investors are increasingly attracted to the rapid growth of property rates in Ambegaon, which are fuelled both by its own inherent market drivers and the rapid development of areas like Sinhagad Road, Bavdhan, Wagholi, Bhugaon and Undri. These locations have been catering to the next wave of information technology-driven demand for homes and have appreciated considerably. Ambegaon already benefits from closeness to the Mumbai-Bangalore Bypass and NBN Sinhagad Technical Institute.

Also, Ambegaon is still the area of choice when it comes to natural ambiance, freedom from traffic congestion and pollution. This is an important factor for a real estate location, since green scenery and unspoiled surroundings attract demand for homes from all income segments. For all these reasons, Ambegaon has pulled ahead of most neighbouring locations and is attracting demand for ownership homes and investment properties from both within and outside the city.

 

Ambegaon – A Return To Ambient Living

Kishor PateKishor Pate, CMD – Amit Enterprises Housing Ltd.

Ambegaon is going to be one of Pune’s most vibrant real estate boom areas over the next ten years.

Today, more and more home buyers are looking for locations that still offer the uncluttered beauty and bracing environment that once defined most of Pune.

For such people, Ambegaon is among the most obvious solutions. It offers hilly surroundings and generous greenery, and the availability of land still permits construction of large township projects.

Thanks to its proximity to Katraj, Ambegaon has great hill views and retains a lot of Pune’s previous natural splendor. This makes it a good location for buyers who are looking for a break from the chaos of the central city areas.

Ambegaon is well connected to the inner city by road. It has the advantage of proximity to the Mumbai-Bangalore Bypass and educational institutions such as Poddar school, Bharti Vidyapeeth College and NBN Sinhgad Technical Institute as well as various hospitals in the vicinity.

It is also close to the new MIDC in Shirval, making it an ideal residential location for employees from this major workplace hub.

Appreciation at Ambegaon has been rather significant at 20-25% over the last two years. With the rapid development of Sinhagadh Road and also because it has now been included in the municipal limits, Ambegaon is going to witness a lot of growth in investment potential in the next few years.

As one of Pune’s most visionary real estate development concerns, Amit Enterprises Housing Ltd. has launched two major projects at Ambegaon – the luxury project Bloomfield and Astonia Royale is the affordable category.

Amit Enterprises Bloomfield Unicorn

Pune’s real estate market responds very well to diversified luxury projects that offer buyers multiple options of bungalows, villas and flats. Ambegaon has proved to be a perfect setting for such projects, because the location’s natural ambience and freedom from congestion provide a feeling of exclusiveness.

Moreover, Pune’s recent Development Plan has now included Ambegaon within the municipal limits. This is an important factor from the real estate point of view, as the area will now receive even more infrastructure benefits from the Pune Municipal Corporation.

This is already beginning to reflect in the property rates at Ambegaon, which is rapidly turning into one of the most viable Pune real estate hotspots.