Guide for Coimbatore Residential Real Estate Investment
Coimbatore, sometimes shortened as Kovai, is a major metropolitan city in Tamil Nadu. It is the 16th largest urban agglomeration in India, as per data from the 2011 Census. Referred to as Manchester of South India, it was ranked 7th best city in India in the Ease of Living index in 2020. In addition, Coimbatore is selected as one of the 100 Indian cities to participate in the flagship initiative’s development of Smart Cities.
This city is in the top 10 best cities in India almost every year. So let’s understand how investing in residential real estate in Coimbatore might be profitable for you.
Top Reasons to Invest in Coimbatore Real Estate
Here are some reasons why you should invest in residential real estate in Coimbatore:
Excellent Job and Business Opportunities
Coimbatore offers all the modern facilities that a person requires to be happy. In addition, the development of the automobile manufacturing and IT sector has increased job opportunities in Coimbatore. Besides this, the city offers great connectivity, public transport and other social facilities that enhance its residential real estate sector.
When you think of moving to a city, safety and security are essential factors. The robust code of Coimbatore’s police force, along with their vigilance, has transformed this place into one worth living, moving and working in. But, apart from these, people of Coimbatore are humble and open-hearted.
Coimbatore is transforming into an educational hub. There are several schools, colleges and universities in the locality. In addition, popular research institutes like the Centre for Bioscience and Nanoscience, Arts Research Institute, Central Institute for Cotton Research, etc., are also situated here.
Residential Real Estate Investment Opportunities in Coimbatore
Here are some localities in Coimbatore that are suitable for residential property investment:
The race course is referred to as the poshest locality in Coimbatore. It is also known as the Switzerland of Coimbatore. People in the high-income bracket consider staying here. There is greenery and neatly laid walking tracks. It is a paradise for joggers and strollers. There are many eateries present here as well. The rate of residential property here ranges around ₹10,000 per square foot.
It is an educational hub and a paradise for students.However, this area also has many townships with gated communities. These townships have apartments where students share accommodation at nominal rates.
Female students get special accommodation facilities making it one of the best places for women to stay. There are healthcare centres and shopping centres as well. The rate of residential property here ranges around ₹4000 per square foot.
Well-known as little Ooty of Coimbatore, this place has three general colleges and a polytechnic college. The temperature here is cooler than in the main Coimbatore city. You can indulge in sporting activities like cricket, football and volleyball here. The rate of residential property here ranges around ₹3000 per square foot.
Things to Consider Before Buying a Residential Property in Coimbatore
Here are some points that you might want to keep in mind before purchasing a residential property in Coimbatore:
Before opting for a property, it is wise to check whether the property adheres to the norms of RERA. RERA, or the Real Estate Regulatory Authority (RERA), is a statutory body aiming to maintain transparency and accountability in India’s real estate sector. RERA is an administrative body formed by the Real Estate (Regulation and Development) Act of 2016, under the Government of India and is present in all states.
You can check whether a particular property or builder in Coimbatore is adhering to the norms of RERA by looking their details up on the RERA portal of Tamil Nadu.
You should always allocate a budget before purchasing a property. Although there are loans available, you should plan to pay the down payment, monthly instalment, and all other charges like stamp duty and registration charges.
You should evaluate the escalating rates in property prices for a particular location in the upcoming years. Assess the locations that will witness completion of the development projects like highways and metro connectivity. It will result in the rise of property prices in the future.
Stamp Duty in Coimbatore, Tamil Nadu
The rate of stamp duty applicable in Coimbatore, Tamil Nadu, is as follows:
|Joint buyers (Male + Female)||7%|
|Joint buyers (Male + Male)||7%|
|Joint buyers (Female + Female)||7%|
Registration Charges in Coimbatore, Tamil Nadu
The state government of Tamil Nadu has kept the rate of registration charges in Coimbatore equal. The registration charges applicable in Coimbatore are:
|Joint buyers (Male + Female)||4%|
|Joint buyers (Female + Female)||4%|
|Joint buyers (Male + Male)||4%|
Coimbatore Residential Real Estate Sector: What’s the Forecast?
Coimbatore, the second largest metropolitan city in Tamil Nadu, ranks top as one of the best places for real estate investment. You can invest in residential property in this city at a low budget and yield huge benefits in the future. As the city is growing fast in terms of economy, job opportunities and living standards, more professionals are settling here from various parts of the country.
The Coimbatore property market has been witnessing a revival in demand for residential real estate in the aftermath of the covid-19 pandemic. According to the Confederation of Real Estate Developers Association of India (CREDAI), customers are looking for larger residential units in Coimbatore. In addition, the city is growing as a significant nexus for sustainable and well-established residential real estate due to its Smart City program.
Residential Real Estate vs Other Asset Classes
Here is the comparison between residential real estate and other asset classes:
Residential Real Estate vs Gold
Real estate lets you earn passive income every month, which is impossible in gold. However, real estate requires a huge quantum of money , while gold investment requires comparatively less investment.
Residential Real Estate vs Stocks & Mutual Funds
Real estate offers more consistent returns in comparison to stocks and mutual funds. However, returns are much higher in the case of the latter. Moreover,real estate requires more than mutual funds in terms of the quantum of investment.
Residential Real Estate vs Bond
Real estate offers much higher returns in comparison to bonds investment. Even tax benefits are much better in the case of real estate. However, bonds are more secure and highly liquid investment options.
If you wish to invest in low-risk bonds and earn stable returns of 9-11%, register on our platform today and start your investment journey.
Residential Real Estate vs Commercial Real Estate
Residential real estate has more tax advantages if a homeowner takes out a mortgage. However, returns are much higher in case of commercial real estate, as the tenants are mostly businesses and companies.
Discover More: Guide for Coimbatore Commercial Real Estate Investment
Here is a tabular representation to compare the different asset classes on the basis of returns, liquidity, risk, volatility and ticket size:
|Parameters||Residential Real Estate||Stocks & Mutual Funds||Bonds||Commercial Real Estate||Gold|
Steps to Invest in Residential Real Estate in Coimbatore
Here are the steps that you can follow if you wish to start investing in residential real estate in Coimbatore:
Step 1: Prepare an investment budget and list of the locations that suit your requirements.
Step 2: Plan a field visit to the shortlisted locations to assess them in terms of infrastructure, connectivity and amenities.
Step 3: After finalising a location, prepare the necessary documents like the sale agreement, encumbrance certificate, title deed, building plan, etc.
Step 4: Complete the payment process. Make sure to complete the stamp duty and registration formalities.
Step 5: Lastly, consider purchasing an insurance policy to safeguard your finances if your property incurs any damage in the future.
Coimbatore has a high demand for luxurious and modernised living, which includes modern amenities, a healthy lifestyle and spacious homes. Moreover, the city offers low-budget investment prospects compared to other metropolitan cities. Outskirts of Coimbatore are seeing a major spike in real estate investments due to its connectivity to other parts of the country.
Frequently Asked Questions (FAQs)
Which are the five most searched areas in Coimbatore?
The five most searched areas in Coimbatore are Saravanampatti, Avinashi Road, Mettupalayam Road, Ramanathapuram and Kovaipudur.
What is CREDAI?
The Confederation of Real Estate Developers’ Association of India (CREDAI) is the apex body of India’s private real estate developers. It aims to transform the landscape of the Indian real estate industry by promoting accountability and self-regulation.
What are capital gains on property purchases?
As property is considered a capital asset, Capital Gains Tax is levied on earnings from the sale of a property. The calculation of these earnings after adjusting transfer and renovation charges and inflation rates.
What is the difference between a leasehold property and a freehold property?
The primary difference between a leasehold and freehold property is the ownership style. For leasehold properties, the ownership remains with the said authority, who will lease the property to you for up to 99 years. In contrast, if you buy a freehold property, you will be the legal owner of the property.