Updated | May 21, 2017 16:43 IST
IT not only change the course of India but also the lifestyle of a common man. After became the techie, the standards of common man lifestyle have been changed a lot.
Apparently, they have been showing much interest in investing Real Estate sector. Despite the IT boom was not encouraging in recession times, the real estate business hasn’t affected a lot like any other business. Because it is not any vegetable or fruit to worry as it will rotten when the time passes by.
Based on certain aspects the cities are divided into Tier I and Tier –II. What are the points to be considered before investing in Tier-I and Tier-II cities? What makes investments in tier 2 cities lucrative? Here are some points.
Points to be followed to invest in the real estate sector of Tier-1 and Tier-2 cities:
Low property costs, government’s focus on smart cities and lower costs of living are some of the important aspects which entice investors to tier 2 cities, as per the survey of Magicbricks. After considering all the factors, experts are divided on whether one should invest in tier 2 or tier 1 cities.
JLL India, CEO, Country Head, Ramesh Nair said that Tier-2 cities can potentially offer two important advantages growth and price potential. Contrary to the statement, a Bangalore-based global real estate investment advisory, Founder, and CEO of PropUrban, Mir Jaffer Ali said that tier-1 cities have been considered over tier-2 cities.
Still, there are many views that are in the middle of these two extreme views. Colliers International India, National Director, Knowledge systems, Amit Oberoi said that it always same whether one invests in a tier-1 city or tier-2. Depend on the intrinsic characteristics of the property and its location, expect the returns on the investments in the real estate. Oberoi believes that investment in residential real estate should consider the factors including location, developers’ track record, and amenities in the project. Based on the present-day scenario, he is not optimistic to invest either in tier-1 or tier-2 cities. He suggested investing in real estate for those who has an investment horizon of 5-10 years. if you still want to invest in tier-2 cities, select the city carefully and check the city has the factors to emerge in future. It is better that the city is one of the 100 smart cities project, the Central Government’ one of the prestigious project to change the course of the nation.
One must need to take extra precautions to invest in tier-2 cities because of diligence of property titles and developers, which is more difficult. Subsequently investing in cities other than the one which you reside brings its own set of responsibilities. You cannot inspect regularly if you invest in the property in city or town other than of one’ s residence. The rent collections and the certain duties need to be fulfilled by the landlord in a reliable manner if it is tenanted. You are not stationed in the same city or town, you’ve to face a lot of problems if the landlord or the person who send rentals every month is not trustworthy.
Besides, you lose track of things including property is not maintained properly and the statutory charges to be paid to local authorities will be kept pending. With this, you’ll have to face legal trouble automatically from the concerned government authorities whether it is municipality or panchayat or urban commission.
On keeping all these things in mind, Nair wanted to invest in a tier-2 city or town where you will live closely or often visit. Or else, you can opt the city or town where your close friends or relatives are staying, who can help you to manage the property.
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