Should You Invest In Another City?
Real estate investors tend to buy property in cities they live in. There are, of course, very good reasons to invest in your own city. To begin with, you are very familiar with the city and know how the real estate market performs. You also have a wide network within the city. Other investors and agents in the city can tell you more about good investment opportunities.
The internet has widened the horizons of real estate investors. Real estate in other parts of India is just a click away now. This is not limited to people who own computers alone. The smartphone wave has opened up the internet to a much larger group of people.
Accessibility of user-friendly apps and enhanced website designs have led to mobile-based property searches growing three times faster than computer-based searches. Real estate searches in tier II cities, which have seen very fast smartphone penetration over the last few years, have grown largely over the national average.
So, more geographical areas than ever before are drawing the attention of property investors. Pune is the most favourite destination of real estate investors. Investors from Mumbai and Bangalore invest the most, because of favourable property prices, good price appreciation, and the fact that properties in all budget ranges are available. In fact, investors from other states are also keen on investing in Pune.
Should a non-resident invest in a city?
The best projections in terms of low property prices and better value appreciation are in such a city's emerging corridors rather than its established real estate areas.
The factors that drive a location's popularity
A prospective real estate or property investor needs to find out the factors that drive demand in a locality. The most important factor is the labour market in a city. Cities are, fundamentally, labour markets. If a city or its periphery is witnessing greater demand for residential property because employment prospects are rising, then the location will be a safe bet.
The other important factor is the affordability. There are few tier II cities and peripheral areas of tier I cities where housing is currently affordable. Pune – which was earlier a tier II city, because of its promising real estate sector, is being upgraded to tier I status. The city is economically growing. IT/ITeS, BPO, a vast manufacturing sector and a flourishing services sector drive Pune's job market. Pune has seen steady real estate growth, coupled with high rental demand.
Reputed real estate developers with a good reputation are developing these areas. There are also mid and small players that offer good, affordable properties. Though, they are yet to earn a grand reputation, they are quite promising.
Finding a good developer is very important. The parameters that matter are the reliability and market standing of developers who are active in the market. When the real estate sector was booming, many unscrupulous developers have been active in emerging cities. These developers generally do not get necessary clearances for their projects, and do not have clear ownership titles of their plots. Construction is often sloppy, and such developers often lack money to complete their projects on. As such properties are usually sold at a low price, buyers tend to fall for it. Do not fall into such traps.
Investing in another city works, so long as it is built by a good developer, and is in a promising locality.