At present the country's commercial and residential real estate rental market has a price tag of approx $50 billion, and is expected to grow 25% on a yearly basis. There are numerous factors that contribute to this incredible situation in rental property market. Major factors that are responsible for bringing about this change include growth in information technology/information technology-enabled services industry like BPOs as they are renting large commercial spaces in order to expand their business process in India. Apart from this, emergence of India as an important investment hub in the world market, growth in foreign direct investments and simultaneous growth in the purchasing power of the Indian middle class plays a pivotal role.
With our industrial sector growing super fast, youth being more career conscious and BPOs churning uncountable employment opportunities we find brilliant talents from all over the country migrating to big cities like Delhi, Mumbai, Chennai and Kolkata. People coming to these places in large numbers have created troubles for required accommodation in these big cities and this is time when renting property comes into the scene. In order to overcome this acute scarcity for good accommodation in the big cities and surrounding areas which can meet the requirements of the population coming to the cities for employment, people began renting their properties and soon realized that it is an amazing source for income as well. Also for young people despite of the handsome salaries and attractive prerequisites they earn owing a property is not a matter of fun and hence the option with which they are left with is to go for rented accommodation. Moreover with people aspiring rich lifestyle and an accommodation that matches their taste further drives the prices of rental property up the wall and makes it a lucrative business opportunity.
At this point it can be very conveniently said that rental property market has great potential and can turn out to be a reliable source of income generation.
The advantages of investing in rental property market can be summarized as below:
- Demand for accommodation is ever increasing and people are willing to pay huge amounts for an accommodation that matches their taste and meets all the mentioned specifications.
- In case immediate selling of any property is not possible, renting the accommodation is a good business and the returns are amazingly high.
- Only apartments in multistoried buildings are not in demand but people seeking independent houses for rent are also many. As a result investment in building independent houses for renting purpose is also a money-spinning business with high rate of return.
This new trend is creating a wave in the RE industry in India.