With the Chennai market showing steady growth, the market has witnessed several small and first time investors in the residential real estate market.
If you are looking to buy property with an eye to grow your net worth one way or other there are certain factors that investors in Chennai need to keep in mind. While the thumb rule may seem to be invest close to upcoming metro lines, outskirts or in proximity to core IT areas for best appreciation, there are a few aspects to remember before zooming in on a project.
Investing close to infrastructure developments
Along the metro or the mono rail or an upcoming SEZ may seem attractive areas to invest in, but they come with a certain degree of risk. “Planned infrastructure can be cancelled and planned routes can also change. In case your property is in the way, chances are the government may takeover the land and give you the approved compensation, which may be way below your expectation, “says Girish Ponnuswami, regional head, Bhoumi Development Consultancy, a property advisory firm. “A better option would be to invest after the plans are approved and the work has started and has gone on for some time. Looking for property in localities close to these developments is a smarter option. It may fetch relatively less appreciation but it would be far better than running the risk of `on the route of the metro’ option.”
Any infrastructure developments typically also have a long term impact, so investing here with plan to wait as long as it takes, is a more practical option.
Investing in outskirts
While South Chennai is developing fast, many investors are looking at the Northern corridor, as the prices are cheaper. “Yes, the Northern corridor is the focus area, but way into the future. The central government has just announced several industrial corridors in the area and investors need to remember that it can take about a decade, before effects of these plans can be seen at the ground level,” says Munish Ganapathy, proprietor, Srilakshmi Real Estates. “Outskirts investment is not just a long term plan, but often a future generational plan. It is mainly because the outskirts are really need-based customised and often unplanned developments, especially when it comes to residential development.”
A reliable developer who undertakes the responsibility for basic civic facilities and continued maintenance is the best option according to experts.
Investing in IT areas
The hope of the investor when investing in IT core areas is to earn high rental returns compared to other localities due to the establishment of IT/ITeS companies where there will be a boost in employment opportunities.
“When investing in newly developed or partially developed areas a different approach to investment is required. Here prices are already high and the future tenants often have more options for renting. So you need to strike a balance between the amenities provided at the project, the proximity to the access roads and other social infrastructure issues, to attract the best rental value,” says Ponnuswami.
Summing it all is R Senthil Kumar, a real estate investment advisor with a renowned real estate consultancy firm, “The small investor must realise that investing in real estate is really a marathon for him, this is also his best bet as he does not have the money power to balance-out a bad investment.”
Source: Times of India / Kanchana Dwarakanath, Magicbricks.com Bureau