How To Buy A House In India At A Young Age For Rental Income?

They say dream big. But, given the harsh realities of life, purchasing a home in your twenties appears to be an unachievable ambition. You've just begun working, living paycheque to paycheque, potentially away from the comforts of home. Your earnings are meager, and your savings are insignificant. You're barely staying afloat. But, we feel you. And we feel your pain. This is not the end of the road! You can still purchase a house at your age in India!

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The most common desire of an Indian is to own a house. According to the 2019 Aspiration Index poll, the most crucial life goal of Indians aged 22 to 45 is to acquire a home. Long-term aspirations, such as purchasing a home and investing in their children’s education, were shown to be the most important even among Indians in their twenties. Buying a property in your early working years may be intimidating. It is difficult to save the money needed to buy a property when your income gets limited due to high living expenses. However, this is not an impossible challenge. If you’ve decided to become a homeowner in your twenties for rental income, there are ways to get there.

According to a Morgan Stanley analysis, millennials are the force that may drive India’s financial success and economic progress. People in this age bracket account for about half of India’s labor and 70% of national family income, with a combined spending potential of $3.6 billion. The group includes educated and accomplished young people with more disposable income, and as a result, today’s millennials have grown to be financially independent and responsible in all areas. 

Because of the exceptional times, millennials are becoming more careful about their investment plans. They also want to diversify their portfolio for security and wealth growth. Today’s millennials are a well-informed audience that comprehends the intricacies of each asset class and examines the current market condition, choosing traditional investing alternatives that provide rapid returns. They have made a transition from being asset-light to diving headfirst into the realm of investment.

Covid-19 has changed the way we exist, think, work, and even interact with others. Furthermore, the disparities in conduct toward renters and owners in various housing societies during the pandemic affected their decision to acquire a property rather than rent one.

With business uncertainty causing the stock market to fall and investment tools such as mutual funds experiencing extreme volatility, real estate has emerged as the most secure source of wealth development. Furthermore, with the lowest-ever interest rates, different government programs, and enticing offers from developers, millennials are choosing real estate as the financial asset to pursue and earn rental income. Millennials see real estate as the best choice from both an emotional and a financial aspect.

What are the things to consider before buying a house in India?

If you are interested in buying a house in India for rental income, the following are some things to consider. 

  • Credit Score: The way to begin your path into property investing is to improve your credit score. Credit takes time to create. Therefore even if you have Rs.0 saved or are ten years away from purchasing a property, you should begin building credit today. Credit cards are a simple method to start improving your credit score while also collecting incentives, but you must utilize your credit card as if it were a debit card. Only spend what you can afford to pay off in full each month, and never miss a payment, since this will be one of the most critical elements deciding your credit score.
  • Research: Finding the ideal house to buy may be one of the most exciting and challenging aspects of property buying. Fortunately, you can do a lot of the preliminary work on your own, and you don’t have to rely only on what your real estate agent puts in front of you if you choose to be more engaged. Of course, you want to select a home that you find attractive and that you love right now, but you also need to consider 5, 10, 20 years from now and how this investment will stand up in the long run.
  • Resale value: Resale market Value is an essential factor to consider when investing in or purchasing a home. When buying a home, consumers never consider the resale value. They make the mistake of focusing simply on a fantastic location or the property’s budget. If you pick the wrong property or location, your future sales price may always be lower than the other properties in the area.

So, what are the best cities to buy a house in India?

When it comes to buying their first house, millennials consider several factors. The city, neighborhood, price per square foot, infrastructure, available facilities, and amenities play a role in assisting consumers’ choose. Here is our list of the best Indian cities for millennial property buyers.

Also, read Top Cities for Property Investment in India 2021.

  • Navi Mumbai: Navi Mumbai, located in Maharashtra’s Konkan Division, is seeing fast industrial and commercial growth. The key reason for the increased economic investment in Navi Mumbai is its accessibility to the city’s major commercial centers, such as Mumbai and Thane. 
  • Pune: Pune also gets regarded as one of India’s top real estate markets. The pleasant temperature and easy access to many facilities have given the moniker “Retiree’s Paradise.” Pune is now home to several significant educational institutions and corporations. Students that come to study in Pune aspire to work and live in the city.
  • Hyderabad: The growth of the IT sector has increased the demand for commercial premises in Hyderabad. Hyderabad gets regarded for having decent living conditions in India, which has earned it the title of the best city in India for real estate investments. The Hyderabad real estate market has some of the most stunning houses at affordable prices. Hyderabad also has a diverse range of real estate investment opportunities, including commercial, residential, co-living, senior-living, and so on, which draws investors.
  • Bangalore: Bangalore is a popular location for both business and residential investments. Bangalore’s demand for real estate investments gets heavily reliant on the city’s IT sector, which creates job possibilities. Dell, Aegis, Hewlett-Packard, Accenture, Infosys, Wipro, Tech Mahindra, and Tata Consultancy Services are the commercial firms in Bangalore. Thus, individuals from all regions of India travel to Bangalore for better jobs and reside there. It owes to security, excellent education and healthcare, nightlife, and other recreational opportunities. Commercial and residential investments in Bangalore can provide you with both capital appreciation and rental income. Investing in Bangalore is never a letdown because the city is continuously expanding in terms of commercial and residential investments. But also due to improved connectivity and infrastructural development.

Best options to buy a house in India for rental income?

Let us now look at the best options to buy a house to gain rental income.

  • Fractional ownership: To put it simply, fractional ownership divides the cost of a commercial property into many portions to allow retail investors to purchase a stake in it. Commercial property, such as office complexes and shopping malls, are expensive ventures that cost hundreds of rupees, putting them out of reach for private investors. Retail investors may now engage in a fast-growing industry that was previously inaccessible to them by breaking the property cost into smaller units—say, Rs 10-20 lakh apiece. Fractional ownership is becoming a popular investment choice in India because of the significant profits it provides. The combination of rental income and capital appreciation makes it an ideal alternative for millennials and their fast-paced lifestyle. Millennials may profit from the prospects given by a new India by investing in physical assets with a track record of high returns through fractional ownership.

Here’s: Fractional Ownership: The Intelligent Way of Owning Property In Modern Times!

  • Co-living models: Co-living alternatives are in high demand among India’s millennials, whether students or migrant working professionals between 18 and 35. Given that millennials account for around 30% of the population, co-living providers have a chance to meet this anticipated demand. These new models have the potential to increase effective rental yield to 8%. Thus, young investors can profit from investing in co-living models. 

Read Why Coliving models are a hit in India.

  • Rental housing: The need for rental accommodation is much greater among the country’s low-income groups. Rental accommodation is the only choice for daily wage earners and migratory employees from the informal economy. According to government estimates, between 26 and 37 million households in metropolitan India live in informal housing. As a result, investing in India’s low-cost housing sector yields higher returns.
  • Airbnb: A little cabin in the woods to a big 6-bedroom home in the city are examples of these Airbnb rentals. In recent years, these types of houses have gained favor. It has several advantages over regular rentals, but it also has some drawbacks. One advantage is that you may charge a higher rent per night. In this case, if you have a hot property that gets booked for most of the month, you may make considerably more money than if you only have one tenant. 

Early homeownership is not an easy but richly rewarding goal. Aside from providing a roof over your family’s head, it’s a sound investment and a fantastic tax-saving option. You can achieve this objective even if you are in your twenties if you have some discipline and vision.

Assetmonk is a platform that offers convenient real estate investment options in major cities such as Chennai, Bangalore, and Hyderabad. It provides a diverse selection of commercial, residential, senior living, and co-living spaces via the fractional ownership model. 

How To Buy A House In India At A Young Age For Rental Income FAQ'S:

One can save money to buy a house through the following ways: 

  • Begin small
  • Invest in profit-generating assets
  • Invest in high-yielding savings accounts
  • Investing in Systematic Investment Plans

One can buy a house in India by 

  • Planning a budget
  • Choose a location
  • Know the local rental prices
  • Consider Resale Value
  • Get loan approval
  • Calculate the stamp duty and registration fee
  • Purchase property insurance

One can buy a house in the 20s in India by:

  • Conduct research
  • Amass credit
  • Keep to Your Budget
  • Obtain a loan
  • Set aside funds for future EMIs

Buying or renting a home generally necessitates the execution of agreements and the registration of the property. And any deal signed by a minor is null and invalid. So, an individual at least must be above 18.

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