Guide for Erode Residential Real Estate Investment￼
Erode is a fast-developing urban city in Tamil Nadu. It is also called the “Turmeric city”, “Textile city”, and “Loom city” as Erode is one of the largest producers of these products. Erode is also one of the 100 Smart cities under the Government initiative.
Besides agriculture products and other industries, Erode is a popular BPO hub. Emerging IT and other digital sectors have increased the demand for BPO offices; hence, this industry in Erode drives demand for real estate.
The agriculture industry in Erode is vast, and it takes up around 37.89% of the total land area of this city. This city’s 59.68% workforce is involved in agricultural production, which contributes significantly to the economy of Tamil Nadu.
The city is also very well-connected by roads with cities in the Coimbatore region. Several state highways pass through it, including the SH-15, SH-84 and SH-84A. All of these reasons contribute to the growth of the local real estate sector as more people settle in this city.
If you are considering whether to invest in residential real estate in Erode, consider reading the following guide.
Top Reasons to Invest in Erode Real Estate
Refer to the reasons below to understand why you should buy a residential property in Erode.
- Tourism Hub
Erode is a prominent tourism hub in the state as it has several temples and forts that add to the historical importance of Tamil Nadu. There are also beautiful churches, forest areas and rivers that attract people to this city. Due to the high tourist footfall, this city’s development is rapid compared to other parts.
Therefore, you can also expect a good return for your property as the demand for real estate will always be upwards due to tourism.
- Smart City
Erode is one of the smart cities in Tamil Nadu. Under the Government of India Initiative, Erode has completed several sewage, waste management and water supply development projects. Thus buying a residential property in Erode will be a profitable venture as Erode will evolve into one of the most advanced intelligent cities.
- Agricultural Industry
Erode has a significant agriculture industry that drives the majority of its economy. It is most famous for the production of turmeric. Despite its urban development, this city has adequate exposure to greenery and agricultural space, which makes it a great place to set up a residence.
- Return on Investment
If you buy a residential property in Erode, you can expect a good return on investment later as the city develops further. The demand for real estate will be higher due to upcoming infrastructure developments. This will allow you to sell your property for a hefty return.
Residential Real Estate Investment Opportunities in Erode
You can choose among the options below to invest in a residential property in Erode.
This locality in Erode has a high demand for residential real estate. It is a popular residential hub with well-developed infrastructure. This area has top hospitals like Sivakumar Hospital and Priya Hospital nearby, along other several other facilities. The average residential property value range in this locality is from ₹5 lakh to ₹5 crore.
Sathyamangalam is an excellent residential area in Erode with a decent population and modern facilities. It is located centrally and is close to several important locations within the city. This locality is also close to educational institutions and good hospitals like Shyamala Hospital and Sakthi Hospital. ₹5 lakh to ₹4 crore is the price range for residential properties in this locality in Erode.
Things to Consider Before Buying a Residential Property in Erode
Before you invest a significant amount in a residential property in Erode, ensure you are aware of the factors mentioned below.
A neighbourhood’s safety is one of the most important factors deciding a property’s demand among tenants. Before buying a property, you must check the security features available. In addition, check for the presence of adequate surveillance and the location of the nearest police station.
Connectivity is also an essential factor for a real estate property. Hence always ensure your property is well connected with the rest of the city and has access to proper means of transportation.
Access to essential services like hospitals and schools is an added benefit for residential properties. Hence you should check this factor before buying a property in Erode. In addition, it is better if your property is close to entertainment services like malls and theatres.
- Property Developer
The reputation of a property builder can add value to your residence. Properties built by famous builders are easily resold in the market. You will get better returns in the future if you invest in a residential property built by an experienced developer.
The Real Estate Regulatory Authority (RERA) is a state body under the Real Estate Regulatory Authority Act 2016, responsible for monitoring all real estate trades in the state. RERA ensures a safe environment for investors and maintains transparency in real estate activities. To verify the details of your selected property in Erode, you can refer to the official website of RERA Tamil Nadu.
Stamp Duty in Erode
Check the table below to learn about the stamp duty rates for properties in Erode.
|Type of Deed||Stamp Duty Charges|
|Power of Attorney (POA) for immovable assets||₹100|
|Power of Attorney (POA) for consideration||4% of the consideration|
|Mortgage||1% on loan value (up to ₹40,000)|
|Mortgage (with possession)||4% on the loan value|
|Agreement for Building Construction||1% of the consideration or construction value (whichever is higher).|
Registration Charges in Erode
Registration charges can also hike up the total investment cost for a property. Thus check the table below for the applicable registration charges in Erode.
|Type of Deed||Registration Charges|
|Sale Agreement||1% on advance money (1% on total value if possession is allowed).|
|Power of Attorney (POA) for immovable assets||₹10,000|
|Power of Attorney (POA) for consideration||1% of ₹10,000 or consideration (whichever is higher).|
|Mortgage||1% on loan value (up to ₹10,000)|
|Mortgage (with possession)||1% on loan value (up to ₹2 lakh)|
|Agreement for Building Construction||1% of the consideration or construction value (whichever is higher).|
Erode Residential Real Estate Sector: What’s the Forecast?
Erode has a strong agricultural economy and a profitable trade market for agro-based products like turmeric and coconut. It is one of the largest producers and exporters of turmeric and coconut in India, and hence the city is rapidly developing in the commercial sector and developing its infrastructure along with it.
This city also has a flourishing textile industry and agro-based mills like paper and sugarcane. Apart from agriculture output, around 40.32% of the city’s population is dependent on the non-agriculture sector. Textile and other industries produce carpets, brass vessels, handloom weaving and other products.
Moreover, several development projects are underway to turn to Erode into a smart city. Under the Smart City Mission, 16 projects have already been completed, and 26 more are undergoing development. The Erode Corporation intends to spend ₹655.60 crore on developing this city.
Thus the commercial front foot of this city will enable it to develop its real estate sector and offer the opportunity for high returns on investments in this sector.
Residential Real Estate vs Other Asset Classes
Refer to the comparison of different asset classes given below before investing in a residential property in Erode.
- Residential Real Estate vs Stocks & Mutual Funds
Stocks and mutual funds offer higher returns at higher risks than residential real estate. These assets are sensitive to market behaviour and, thus, highly volatile. On the other hand, residential real estate offers a moderately high return at moderate risks over a long period.
- Residential Real Estate vs Bonds
Residential real estate offers you higher returns than bonds at moderate risks. Bonds are market instruments that offer fixed interests at low-moderate risk levels. Ticket prices for bonds are lower than residential real estate and are preferred by investors to park their capital for a medium time period.
- Residential Real Estate vs Commercial Real estate
Commercial real estate has higher demand than residential properties and thus offers higher returns. However, the risks associated with real estate investments are lower for residential real estate as compared to commercial properties.
- Residential Real Estate vs Gold
Residential real estate offers higher returns than gold-related investments over the long term. However, gold investments have fewer risks associated with them compared to residential real estate.
The comparison of the above assets based on returns, liquidity, risk, volatility and ticket size is given in the table below.
|Parameters||Residential Real Estate||Stocks & Mutual Funds||Commercial Real Estate||Bonds||Gold|
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Steps to Invest in Residential Real Estate in Erode
If you want to buy a residential property in Erode, follow the steps given below.
Step 1: Fix a budget to narrow your search for a residential property.
Step 2: Appoint an experienced broker to help you buy your property. Brokers with a good network can help you choose among the best options available in your city.
Step 3: Do your research in the market and find out the price trends in the real estate sector.
Step 4: Shortlist a few properties based on your research and preferences.
Step 5: Visit all the selected properties with your broker and check the promised amenities.
Step 6: Conduct a RERA verification of your property before you go through with the deal.
Step 7: Prepare all required documents and complete official formalities.
Step 8: Finalise the deal by paying the seller.
Step 9: Complete the registration process and pay the required fees. Also, pay your broker for their services.
Step 10: Opt for an insurance plan after completing your purchase.
Erode is the 7th largest urban city in Tamil Nadu. Besides tier-one cities like Chennai, Erode is a fast-developing location with a thriving commercial industry. Due to the large-scale production and export of industrial products, this city’s infrastructure development is growing quickly.
Buying a residential property in this city will also allow you to earn high returns as the demand for residential spaces is growing rapidly, parallel to the development of commerce and industry in this city.
Frequently Asked Questions
Which industry is famous in Erode?
Erode is famous for its turmeric production and textile industry. It is one of the largest producers of coconut and turmeric.
How many industries are there in Erode?
Erode is a commercial town with several large-scale and many small-scale industries. There are more the 70 large-scale industries and approximately 24,000 small-scale industries in Erode. In addition, there are more than 5,900 cottage industries and approximately 8,200 handicraft industries.
How many Dams are there in Erode?
There are 2 Dams in Erode. One of the famous dams in Erode is Bhavani Sagar Dam or Lower Bhavani Dam. The 2nd Dam is known as Kodiveri Dam.
Is Erode a metro city?
Yes, Erode is one of the metro cities in Tamil Nadu. The approximate population of the metro area of Erode is about 6, 48,000 people.