By Parag Saraiya
- Investment amount: It takes at least Rs 2.5 Crore to buy a two bedroom apartment in a building with certain amenities in an area which does not have nala(drain with thick black muck) or slum nearby and has no noise pollution and comes with at least 2 car parking. Where as you can buy a 2 BHK apartment in Tier 3 city in a budget range of Rs 25 to 40 Lacs in average quality and a high quality two BHK will come for Rs 40 – 50 Lacs. No need to take large loan or break your retirement fund: Buying a 1-2 BHK in smaller city can be done with smaller loan which will allow you to keep your retirement funds intact and retain your flat in Metro city.
- Lower expense: An average apartment in new building in Mumbai will have maintenance and property taxes of Rs 10 per SF where as you pay as low as Rs 2 per SF in smaller cities
- Higher rental yield: The metro city rental are abysmal at 2 – 2.5% per annum, where as Tier 3 towns with growing demand and no over-supply situation gives you as high as 4% rental if you have home in gated community.
- Return on Investment: With huge unsold inventory which will take at least 4 years to clear in NCR and Mumbai regions, the appreciation in those cities looks extremely difficult over mid- term (3-5 years); whereas increasing demand of high quality apartments in smaller cities and almost non-existent inventory will give you above market average appreciation.
- Better living environment: High crime against senior citizens, pollution in water, air and traffic and very little green zones are forcing many families to relocate to smaller cities where you can enjoy fresh vegetables, clean water and air and ability to use the road as pedestrian along with lower crime rates.
- Better connectivity: With many jobs and businesses which can be conducted over internet and excellent road and improved air connectivity are major reasons why people in age of 3-60 are considering living in smaller cities without impacting their career or business.
- Affordable cost of living: Starting from vegetable, food, water, education, entertainment to healthcare and recreational facility; all are at least 30 to 60% lower in Tier 3 cities compared to expensive metros and give you a balanced life which is missing in busy and hectic life in larger cities. Every rupee goes a very long way in smaller cities.
At the end of the day, it is nature which heals and most people who live in busy cities wish that their vacation in their home town never ends. So if you would like to make a sound investment in smaller towns as second home or future retirement home then it is right time before property in those towns become expensive and you feel that you missed the bus.
Author is a Real Estate Developer who has chosen to develop world class residential communities in Tier 3 towns such as Belagavi(Belgaum), Hubli-Dharwad, Goa and Kolhapur. He is available at [email protected] and more details are at www.adampartners.com.
1 thought on “7 Reasons to buy a home in Tier 3 city, not in Metro city?”
first clear the mess with wakf board.