Upcoming location or a well-established location for residential investment?
Location is always the most important factor to be considered before investing. Most investors are inconclusive in whether to invest in an upcoming location or a well-established location. Established locations are already exploited in terms of real estate investment, so investing in an established location may not give you enhanced returns and capital investment in established locations is higher compared to upcoming locations in general.
Investing in an upcoming location is a good bet compared to established location because it gives you better returns in low investment. In case of established location, even with a good investment you get only a small chunk of land/property. If we look at NCR’s situation, investors are more interested in Noida, Gurgaon, Faridabad and other upcoming areas rather Delhi. Delhi being already saturated in terms of real-estate, investing there is not a good choice. Land is the only form of property which is expected to increase always without depreciation. While investing on any property other than land, depreciation should taken in account.
Most of the in-migration population to million-plus cities move into areas which are affordable. The infrastructure provision in these areas is new with increasing and enhanced accessibility. Upcoming location also attract many commercial and industrial developments so that it generates demand for the residential which in turn increasing the property prices. Greater Noida and Gurgaon Sohna Road are two good examples in NCR where there is good infrastructure, many commercial and industrial developments with better connectivity.
Type of property also is a huge factor which needs to be considered along with the location of the property. Properties located in Lutyen’s Delhi are mostly bungalows which cost more than any other residential property in NCR. The rental market for such a property shrinks proportionately. Bungalows in well-established locations like New Delhi have high chance of attracting long-term corporate leases. Investing a bungalow in an upcoming location will need less capital investment. The rental yield will increase many folds in the future years with development in infrastructure and accessibility.
