Buy residential or commercial properties to collect monthly rent that exceeds the mortgage cost.
So you can be happy that your rental income takes care of the EMI and when the loan is over, this asset becomes yours completely. Sounds interesting!!
For example, a ₹20 Lakh home loan taken at an 8% annual interest rate for 10 years results in a monthly EMI of roughly ₹24,265. If your rental matches with it, with in 10 years you own the house what you bought, free from loans.
WOW!!
Is it possible in India to get more than 24265 Rs monthly rent for the 20 lakh rupee home asset?
It is highly unlikely to consistently earn more than ₹24,265 in monthly rent for a ₹20 lakh residential property in India, as this requires a 14.5% annual rental yield. Standard residential rental yields across top Indian cities typically range from 3% to 5% per year, which equates to roughly ₹5,000 to ₹8,300 per month for a property of this value. While generating ₹24,265 per month from a ₹20 lakh residential asset is extremely difficult through standard long-term leasing, specific niche strategies can help you maximize your returns.
ntal StrategyAverage Annual YieldEstimated Monthly Rent on ₹20L AssetStandard Residential Lease3% – 5%₹5,000 – ₹8,333Co-Living / PG Accommodation7% – 9%₹11,666 – ₹15,000Short-Term Vacation Rentals10% – 12%₹16,666 – ₹20,000Commercial Real Estate8% – 10%₹13,333 – ₹16,666
OOPS!!
Other than India, any country can give this yield?
No country provides a standard residential rental yield of 14.5% on long-term leases. According to data from the Global Property Guide, even the world's highest-yielding property markets top out at gross annual averages of 10% to 11%.
Still, are you going to buy 2BHK for 75 lakh rupees in the outskirts of coimbatore and rent it out for 9000 Rs per month?
Yes, it is a social status.
Posted by: sekkizhar j
Bio: Statistician consultant in business turnaround educationist Associate Professor
Link: https://www.psgim.ac.in
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