The newest trend you can see among a section of homebuyers in Chennai is buying a flat or Villa in a residential gated community. Instead of moving in, they are leasing it and they are seeing the choice as being a wise investment. Know why?
The Buy-Lease-Relax Model
The buy-lease-relax model is becoming increasingly popular, especially in the new housing developments that are popping up in pilgrimage areas like Tiruttani and Kanchipuram. The popularity is also growing for assisted living institutions, colleges, and the ECR beachfront areas. This might assist you in buying a property and leasing it out so that you can profit from your investment regularly without having to move right away.
When purchasing a villa or apartment in a gated community, buyers frequently lease the property to builders, who subsequently turn it over to a contractor for upkeep and rental income. These properties are rented out for coworking spaces, assisted living institutions, staycations, pilgrims, and students. Buyers can use the money to pay back their loans in around ten years if annual returns average between five and six percent. For many real estate investors, this arrangement offers a hassle-free investment opportunity with a consistent source of income.
According to popular sentiment from this segment of homebuyers, when they go for rental after buying a flat, there is no guarantee on the period the tenant will be staying in the flat, they feel it’s a smart move to lease it out to a company, who will incur the expenses by renting the flat and maintaining it too. So, it’s like, “Have your cake and eat it too”, by getting the returns regularly.
The essence of the idea lies in those who buy flats or villas in the range of 25 lakhs to 50 lakhs in gated communities, they take a loan of 60 to 40% and are assured of a stable income. And, in a span of 10 to 12 years, their home loans have been paid in full, and they have acquired full ownership of their properties.
Major clients for a staycation:
Mostly the clients who prefer to rent out these flats are people who want a weekend getaway, corporates, pilgrims & expats. Most of the expats coming to stay for a month or 15 days prefer a luxury space beside the beach. Some corporates prefer this type of property to shift their work away from the hustle and bustle of the city for a few days. They exhibit a distinct preference for villas.
Villas/Flats near Pilgrimage Centers:
Accommodation options situated near pilgrimage centers also present a significant opportunity for growth, particularly in the cities of Kanchipuram and Tiruttani. They make this choice, as they feel this type of accommodation is more hygienic and clean compared to the hotels and lodges around and one gets their personal family time too. This opportunity has the potential to deliver strong financial performance for investors.
Assisted Living Spaces :
The entities that run assisted living spaces apartments have about 1000 beds to accommodate and take care of senior, elderly, and disabled citizens. They take a property on lease and operate it. The owners can buy 30 lakhs per room and see returns on their investment.
In Chennai real estate, the trend of buying, and leasing out properties is slowly becoming The in thing!