Investing in rental income properties is a popular choice for many in India, as it offers a steady source of passive income and the potential for long-term appreciation. However, the rental income potential can vary significantly depending on the location and property type.
To help you understand the rental income potential of some of the top Indian cities in 2023, we have put together an overview of the current market trends in Delhi, Mumbai, Bangalore, Chennai, and Hyderabad. We will provide insights into the average rental yields, property prices, and demand-supply dynamics, which can help you make informed investment decisions.
So, whether you are a first-time investor or looking to diversify your portfolio, read on to explore the rental income potential of these top Indian cities for 2023.
What is rental income and how can it be helpful for you?
Rental income refers to the amount of money that a property owner earns by renting out their property to tenants. The income generated from rental properties can be an excellent source of passive income for property owners. This income can be used to cover expenses associated with the property, such as mortgage payments, taxes, repairs, and maintenance costs, or it can be reinvested into other properties or investments.
Here are some ways rental income can be useful to you:
Additional Income: Rental income can be a great way to supplement your existing income. By renting out your property, you can earn a steady stream of additional income each month.
Retirement Planning: Rental income can also be a valuable tool for retirement planning. Owning rental property can provide a reliable source of income during your retirement years, helping to ensure that you are financially secure.
Wealth Building: Rental income can also help you build wealth over time. As you continue to collect rent and pay down your mortgage, your equity in the property will increase, providing you with an asset that can be sold or used as collateral for future investments.
Tax Benefits: Rental income can also provide you with significant tax benefits. You can deduct a wide range of expenses related to your rental property, including mortgage interest, property taxes, repairs, and maintenance costs.
Inflation Hedge: Rental income can also serve as an inflation hedge. As inflation rises, so does the cost of living, including the price of rental properties. This can lead to an increase in rental income, providing you with a reliable source of income that keeps pace with inflation.
Portfolio Diversification: Rental income can be an excellent way to diversify your investment portfolio. Investing in rental properties can provide you with a tangible asset that is not correlated with traditional investments such as stocks and bonds.
Overall, rental income can be a valuable tool for achieving financial security and building wealth over time. However, it’s important to remember that being a landlord comes with its own set of responsibilities, including property management, tenant screening, and maintenance. It’s essential to carefully consider the potential risks and rewards of owning rental property before making any investment decisions
Rental Income Increase in Mumbai
Mumbai is one of the most expensive cities to live in India, and the rental market is no exception. In 2023, the rental income is expected to continue increasing in the city. According to the Anarock data, the residential rentals in Mulund, a locality in the Mumbai Metropolitan Region (MMR), only saw a 6% growth in the period from 2019 to 2022. However, other luxury micro-markets like Worli reportedly witnessed a rental growth of 16% in the same period, from Rs 2.05 lakh per month in 2019 to Rs 2.38 lakh per month in 2022. Therefore, it can be expected that the rental income in Mumbai will continue to increase in 2023.
Rental Income Increase in Delhi
Delhi, the national capital, is a prime location for real estate investment and rental income. The Anarock data suggests that the Golf Course Extension area in the NCR witnessed the highest growth in luxury home rentals, a whopping 18% increase from Rs 49,000 per month in 2019 to Rs 58,000 per month in 2022 for homes of around 2,000 sq. ft. It can be expected that the rental income in Delhi will continue to increase in 2023, especially in luxury micro-markets.
Rental Income Increase in Hyderabad
Hyderabad, on the other hand, reportedly saw only single-digit growth in residential rentals in key areas like Gachibowli and HITECH City, with a growth rate of 6% and 7% respectively from 2019 to 2022. This is comparatively lower than the rental income growth in other cities like Pune, Bengaluru, and Delhi. Therefore, it remains to be seen if the rental income in Hyderabad will continue to increase in 2023, although it is expected to experience moderate growth.
Rental Income Increase in Bengaluru
Bengaluru, the Silicon Valley of India, is a hub for techies and start-ups, making it an attractive location for real estate investment and rental income. The Anarock data suggests that Bengaluru’s Whitefield recorded approximately 18% average rental growth, from Rs 19,000 per cent per month in 2019 to Rs 22,500 per month in 2022. Rajaji Nagar in Bengaluru also saw a growth of 16% in average monthly rental values for luxury homes, from Rs 56,000 per month in 2019 to Rs 65,000 per month in 2022. Therefore, it can be expected that the rental income in Bengaluru will continue to increase in 2023, especially in the luxury micro-markets.
Rental income in major Indian cities is expected to continue increasing in 2023, especially in luxury micro-markets. However, the growth rate may vary between different cities and locations within those cities, based on factors like demand, supply, infrastructure, and other economic indicators. With Assetmonk, you can become the proud owner of such impressive pieces of real estate in the key cities of India. Invest today
