Residential Property — The Complete Investor’s Guide
Understand cash flows, due diligence, financing, taxes, and risks before buying an apartment or home for investment.
Low rental yieldHigh ticket sizeEmotional bias alert
How It Works
Buy a flat/house, earn rent and/or capital gains. Returns depend on location, developer quality, micro-market supply/demand, and interest rates.
Due Diligence Checklist
Legal & Title
- Title search, encumbrance certificate, RERA registration
- Approvals: sanctioned plan, occupancy certificate
- Society rules, pending litigations
Financial
- All-in cost: base price + floor rise + parking + GST/stamp duty + brokerage
- Expected rent, vacancy factor, maintenance, property tax
- Loan terms: ROI, prepayment penalty, LTV
City-wise Yield Examples
| City/Micro-market | Gross Yield | Rent Range | Notes |
|---|---|---|---|
| Mumbai (Suburbs) | 2.4–3.2% | ₹30–45/sqft | High demand, high price base |
| Pune (Hinjawadi/Kharadi) | 2.8–3.6% | ₹18–28/sqft | IT demand, stable absorption |
| Bengaluru (ORR/Whitefield) | 2.6–3.4% | ₹22–32/sqft | Tech hub; better tenant profile |
| Hyderabad (Gachibowli/Kondapur) | 3.0–3.8% | ₹18–26/sqft | Supply adding; infra improving |
| NCR (Noida/Gurgaon) | 2.6–3.5% | ₹20–35/sqft | Wide spread; project quality varies |
Illustrative residential gross yields & rents (city clusters); indicative only.
Rental Yield Calculator
Taxation (Snapshot)
- Rental income: taxed under income from house property (standard deduction rules apply)
- Capital gains: LTCG with indexation after 24 months; exemptions possible on reinvestment
Pros
- Tangible, potential appreciation, leverage available
- Tax benefits on interest
Cons
- Low rental yield, illiquid, high maintenance
- Tenant risk, regulatory delays
Education only; not investment advice. Real estate is illiquid and location-specific; do independent due diligence.