Gorakhpur is a city situated in Uttar Pradesh’s Purvanchal region. It is situated 270 km from the state capital Lucknow. Gorakhpur is now home to the world’s longest railway platform after the inauguration of the remodelled Gorakhpur railway yard.
The city has Mahayogi Gorakhnath Airport, which connects it to major metropolitan cities around the country. It is even going to get metro connectivity soon. Gorakhpur has four universities, hotel management institutes and a medical college with multiple other colleges in the pipeline.
Situated on the banks of River Rapti, the city enjoys a pleasant climate throughout the year. It is slowly developing into a real estate hub owing to the massive development of its commercial and residential popularity.
Let us understand how investing in Gorakhpur’s residential real estate can be profitable for you.
Top Reasons to Invest in Gorakhpur Real Estate
Here are some reasons why you should invest in Gorakhpur’s real estate market:
Gorakhpur is developing into an air travel hub with swift connectivity to cities like Varanasi, Hyderabad, Jaipur, Chandigarh, etc. It also has good rail connectivity that connects the city to other major parts of the country. A budget of ₹1,000 crore has been allocated by the government for the development of Purvanchal Expressway and Gorakhpur Link Expressway, which will ensure more seamless connectivity.
- Great Amenities
A total of ₹14 crore has been allocated for medical colleges in different localities of Uttar Pradesh that include Gorakhpur as well. Another ₹29.50 crore has been allocated for construction of a modern auditorium in Gorakhpur. Multiple proposed developments in infrastructure and connectivity are going to transform the city into a real estate hub.
Residential Real Estate Investment Opportunities in Gorakhpur
Here are some of the localities in Gorakhpur suitable for residential real estate investment:
Maniram can be a viable option for residential real estate investment. This location has several residential lands for sale that are available in various plot sizes. All major banks have their branches here. The rate of most of the residential plots here is around ₹700 per square foot.
It is one of the best residential localities in Gorakhpur. All basic amenities like schools, colleges, hospitals, banks and markets are present in its vicinity. Railway stations, bus stops and the airport are also within a short distance. Price of residential property here can be around ₹5,000 per square foot.
Read Also: Guide for Jamshedpur Residential Real Estate Investment
Things to Consider Before Buying a Residential Property in Gorakhpur
Here are some points that you should consider before purchasing a residential property in Gorakhpur:
- Rental and Resale Value
Calculating the rental and future resale value of the property that you are considering is necessary. Before finalising the property, consider the potential gains that you can reap out of the property. Therefore, having complete knowledge about the property’s locality is essential.
- RERA Authentication
Before investing in a property, it is vital to check whether it adheres to the norms of the Real Estate Regulatory Authority (RERA). It is a statutory body that was established after the enactment of the RERA Act of 2016. Its main aim is to ensure accountability and transparency in India’s real estate sector.
Make sure to check the authenticity of a property in Gorakhpur by visiting the portal of RERA Uttar Pradesh.
Stamp Duty in Gorakhpur, Uttar Pradesh
Stamp duty charges in Uttar Pradesh are levied as per the circle rates decided by the administration. Rate of stamp duty applicable in Gorakhpur is as follows:
|Joint buyers (Male + Female)||6.5%|
|Joint buyers (Male + Male)||7%|
|Joint buyers (Female + Female)||6%|
Registration Charges in Gorakhpur, Uttar Pradesh
Registration charges are levied by the state government to transfer the ownership of the property. Here is the rate of registration charges applicable in Gorakhpur:
|Joint buyers (Male + Female)||1%|
|Joint buyers (Male + Male)||1%|
|Joint buyers (Female + Female)||1%|
Gorakhpur Residential Real Estate Sector: What’s the Forecast?
According to recent data, the starting price of plots in Gorakhpur is ₹105 per square foot, and the average price of properties is around ₹2,820 per square foot. As per the price trends, investing in residential properties in Gorakhpur can be profitable at the moment.
Recently, the Rail Land Development Authority has invited bids for development of residential plots in Gorakhpur. Chief Minister Yogi Adityanath is also planning to lay the foundation stone of 21 projects of the Housing Development Board, Public Works Department & Flood Division worth ₹111.1 crore.
Being the hometown of the present chief minister of Uttar Pradesh, the city has been witnessing massive development since 2017. The CM is also planning to inaugurate projects worth ₹67.86 crore for infrastructure development in different sectors of Gorakhpur.
This highlights how the city is undergoing a significant transformation that would uplift the face of the real estate market here. Therefore, investing in Gorakhpur’s residential real estate might be a profitable venture.
Residential Real Estate vs Other Asset Classes
Here is the comparison between residential real estate and other asset classes:
Residential Real Estate vs Gold
Gold is more volatile than real estate as the price of gold fluctuates as per global market sentiments. Also, real estate gives you an opportunity to earn a passive income every month, unlike gold.
Residential Real Estate vs Bonds
Bonds investment are much more secure in comparison to real estate. However, residential real estate investment offers better tax benefits than bonds if the property is availed on a home loan.
However, bonds have high liquidity when compared to real estate. This is primarily because a property sale requires huge transactional costs and a suitable buyer.
If you wish to earn fixed returns of 9-11% by investing in secure assets like bonds, register on our platform today and start investing in top-rated bonds that are available in the market.
Residential Real Estate vs Commercial Real Estate
Residential real estate offers higher tax benefits if the property is taken on a home loan. Moreover, it is easier to find a tenant for residential spaces than commercial real estate, and the paperwork is also less complicated. However, commercial real estate can generate higher returns.
Discover More: Guide for Gorakhpur Commercial Real Estate Investment
Residential Real Estate vs Stocks & Mutual Funds
Although stocks and mutual funds offer much higher returns than residential real estate investments, the returns can fluctuate because they primarily depend on stock market sentiments. On the other hand, real estate investments offer consistent and stable rental income.
Here is a tabular representation of the comparison between different types of assets on the basis of returns, liquidity, risk, volatility and ticket size:
|Parameters||Commercial Real Estate||Stocks and Mutual Funds||Gold||Residential Real estate||Bonds|
Steps to Invest in Residential Real Estate in Gorakhpur
Here are the steps that you can follow if you want to invest in Gorakhpur’s residential real estate sector:
Step 1: Prepare a budget for your investment and come up with a list of locations that suit your budget and requirements.
Step 2: After shortlisting a few locations, plan a field visit to assess the properties in terms of infrastructure, connectivity, proximity to hospitals, etc.
Step 3: After finalising a location, prepare the necessary documents, such as sale agreement, building plan, power of attorney, etc.
Step 4: Complete the payment process. Make sure to pay the requisite stamp duty and registration charges as well.
Step 5: Opt for an insurance policy to secure your property financially in case there is any damage to your property.
Read More: Guide for Nashik Residential Real Estate Investment
Uttar Pradesh’s government is striving to make Gorakhpur an example of development for all of its cities. Being a business and trading centre of Uttar Pradesh, there is an increase in the demand for residential real estate properties in Gorakhpur. This is primarily because the city has been witnessing a massive influx of working professionals who are looking for standard housing and modern amenities.
Frequently Asked Questions
Which localities in Gorakhpur are suitable for commercial real estate investment?
Some of the localities in Gorakhpur suitable for commercial real estate investment are Medical College Road, Golghar, Bhathat and Mohaddipur.
Do I need to pay stamp duty if the property is a gift or is transferred?
Yes, you will need to pay stamp duty on properties that you receive as a gift. However, some states, like Rajasthan and Haryana, offer concessions to female transferors.
What are capital gains on property purchases?
Property is considered a capital asset; therefore, Capital Gains Tax is levied on the gains earned from sale of property. This gain is calculated after adjusting inflation rate, renovation and transfer charges.
What taxes do I need to pay while buying a property?
When purchasing a property, the taxes that you need to pay are Tax Deduction at Source (TDS), stamp duty, registration charges & service tax (if any).