Guide for Kumarapalayam Commercial Real Estate Investment

Kumarapalayam is a textile town located in Namakkal district of Tamil Nadu. This town is famous for its traditional leather chappals as well. The nearest airport is Salem airport while the nearest railway station is Erode Junction. 

National Highway 544 passes near the town which gives it close access to Coimbatore, Salem, Erode, Bhavani, Pallipalayam etc. The state government in collaboration with central government is coming up with a hi-tech park for weaving known as Cauvery Hi-Tech Weaving Park.

Keep reading to find out how investing in commercial real estate in Kumarapalayam might be a profitable venture. 

Top Reasons to Invest in Kumarapalayam Real Estate

Here are some of the reasons why you would want to invest in commercial real estate in Kumarapalayam:

  • Connectivity

Kumarapalayam is well-connected to different parts of the state through excellent bus services and road connectivity. The inter and intra-state bus stops and railway station are just a few kilometres away from Kumarapalayam. 

With easy availability of state and private bus services, commuting to nearby locations is absolutely hassle-free. Good connectivity in Kumarapalayam is becoming the prime reason behind an increase in demand for commercial real estate.

  • Industries

This town is famous for its textile industries as well as other related activities. Additionally, manual dyeing units, yarn dyeing processing units, spinning mills, calendaring mills, weaving units, export-oriented units and other ancillary industries are also present in Kumarapalayam. The state government, along with some help from the central government, is setting up a high-tech park for shuttle-less looms which will be known as Cauvery Hi-Tech Weaving Park in Kumarapalayam.

Commercial Real Estate Investment Opportunities in Kumarapalayam

Let us take a look at a few locations which might be apt for investing in commercial real estate in Kumarapalayam:

  • Bhavani

Bhavani is the twin city of Kumarapalayam and is separated from it by Cauvery River. This city is famous for its carpet and blanket industry and due to high industrial production, Bhavani is also known as Guberapuri or the Carpet city. 

National Highway 544 passes near the town which makes travelling to important locations like Salem and Coimbatore easy. Government-owned and even private buses are available here from Bhavani bus stop. 

Erode Junction railway station is only 20 km away. Rate of commercial property in the locality ranges from around ₹4,150 per square foot to ₹5,580 per square foot.

  • Perundurai

It is one of the most important areas near Erode. This locality is divided into two parts – one is industrial area which is known as SIPCOT where many industries are there. The locality is well-maintained and markets are present within walking distance. Theatres and hotels are also present in the vicinity. Rate of commercial property in this location ranges from around ₹2,000 per square foot to as high as ₹5,60,000 per square foot.

Things to Consider Before Buying a Commercial Property in Kumarapalayam

Here are some points that you might want to keep in mind if you wish to invest in commercial real estate in Kumarapalayam:

  • Assess the Location

Location is the most significant factor that needs to be taken into consideration before buying a property in Kumarapalayam. There should be robust infrastructure present in the location which will make travelling from one locality to another seamless. It is usually profitable if you purchase a property in a premium location.

  • RERA Compliance

Before purchasing a property, make sure the builder who has constructed the property has abided by all the rules and regulations as stated in RERA Act of 2016. Real Estate Regulatory Authority Act was enacted in 2016 to take care of the accountability and transparency of real estate sector in India. The Real Estate Regulatory Authority was established in each and every state and union territory to keep real estate sectors across India in order. One way to check whether all the rules have been abided by your builder is by visiting the official website of RERA Tamil Nadu.

Stamp Duty in Kumarapalayam, Tamil Nadu

Stamp duty charges are set after considering factors like value of a property, type of property, age of property, number of floors and intent of usage. Here are the stamp duty rates applicable in Kumarapalayam:

Document CategoryStamp Duty
Sale (Conveyance)7%
Exchange7% on the market value of greater value
Simple Mortgage1% of loan amount (to a maximum of ₹40,000)
Mortgage with possession4% of loan amount
Agreement to sale₹20
Agreement relating to building constructionHigher than 1% of construction value or consideration specified in agreement
General Power of attorney (GPA) to sell immovable property₹100
GPA given for consideration4% of consideration
Partition4% of market value for separated shares

Registration Charges in Kumarapalayam, Tamil Nadu 

According to Indian Stamps Act of 1899 and Tamil Nadu Stamp Act of 2019, property buyers need to pay registration charges whenever there is a property transaction. Rate of registration charge applicable in Kumarapalayam, Tamil Nadu is as follows:

Document CategoryRegistration Charge
Sale (Conveyance)4% on property’s market value
Exchange4% of market value of greater value property
Simple Mortgage1% of loan amount (to a maximum of ₹10,000)
Mortgage with possession1% of loan amount (to a maximum of ₹2,00,000)
Agreement to sale1% on Advance money (If possession is given then 1% on total amount is considered)
Agreement relating to building construction1% of value of construction or consideration specified in agreement whichever is higher
General Power of attorney (GPA) to sell immovable property₹10,000
GPA given for consideration1% on consideration or Rs 10,000 whichever is higher
Partition1% of market value for separated shares

Kumarapalayam Commercial Real Estate Sector: What’s the Forecast?

There is an ever-increasing need for commercial spaces in Tamil Nadu. Therefore the state government is taking certain steps to meet this requirement. CM Stalin unveiled the Tamil Nadu Real Estate Vision 2030 at real estate exhibition Fairpro 2023 which was organised by Confederation of Real Estate Developer’s Association of India (CREDAI).

Aiming for overall development of the state, the government is taking steps to develop all the sectors and with the launch of new industries, there will be an increase in demand for offices for reputed companies. Therefore, investing in commercial real estate in Kumarapalayam will surely help in earning great returns on your investment.

Commercial Real Estate vs Other Asset Classes

Here is the comparison between commercial real estate versus other asset classes: 

Commercial Real Estate vs Bonds

Bonds are much less risky and less volatile in comparison to real estate. However, returns generated are much better in case you invest in commercial real estate.

However, if you wish to invest in a low-risk asset that offers you stable returns of 9 to 11%, you can register on our website today. Start investing in a wide range of top-rated bonds. 

Commercial Real Estate vs Stocks & Mutual Funds

Stocks are much more risky and volatile in comparison to real estate; however, they generate higher returns. If we consider consistent returns, real estate is much better in comparison to stocks and mutual funds. However, real estate requires much higher quantum of investment. 

Commercial Real Estate vs Gold

Real estate is much less risky and less volatile in comparison to gold as the value of gold depends heavily on market conditions. In case of returns, real estate offers you the opportunity to earn every month which is not possible with gold. Gold is much more liquid in comparison to real estate. In case of quantum of investment, gold is much more affordable in comparison to real estate. 

Commercial Real Estate vs Residential Real Estate

Commercial real estate helps in earning much higher returns in comparison to residential real estate. Commercial real estate is much less risky as the lease tenure is for a longer tenure. However, in case of tax benefits, residential real estate is better than commercial real estate which does not offer any kind of tax benefits. 

Let us take a look at the comparison between different asset classes on the basis of returns, liquidity, risk, volatility and ticket size of assets:

ParametersResidential Real EstateStocks & Mutual FundsGoldCommercial Real EstateBonds
LiquidityLow High High Low Moderate 
RiskLow High Low Low Moderate 
VolatilityLow High Low Low Low 
Ticket SizeHigh Varies LowHighVaries 

Steps to Invest in Commercial Real Estate in Kumarapalayam

Mentioned below are the steps that you can follow if you are interested to invest in commercial real estate in Kumarapalayam:

Step 1: Set your investment budget. 

Step 2: Prepare a list of all the locations that might be suitable due to presence of all the facilities that you require in your commercial real estate property. 

Step 3: Take the help of a commercial broker and visit every location on your list and check whether all the documents are authentic. 

Step 4: Select a property only after checking whether it abides by all the RERA rules. 

Step 5: Pay for the property. Make sure to pay the required stamp duty and registration charges. 

Step 6: Consult a lawyer and complete all legal formalities like preparing all documents. 

Step 7: Lastly, consider purchasing insurance for your property in order to safeguard yourself financially in case your property incurs any damages. 

Final Word

Kumarapalayam which is a well-known neighbourhood in Erode has a huge scope for earning great returns from commercial real estate investments. Presence of entertainment centres, hospitals, basic amenities, etc., has transformed this location into one of the sought-after residential as well as commercial real estate destinations. 

Kumarapalayam is witnessing prolific and exponential growth and this will transform this place into a commercial real estate hub. Smooth connectivity along with rapid pace of development is not only attracting more builders to purchase plots here to construct commercial centres but also increasing demand among investors.

Frequently Asked Questions

Are there any benefits for paying stamp duty?

When you pay stamp duty and registration charges for purchasing a new property, you will be eligible to claim tax benefits of up to ₹1.5 lakh. This benefit is however applicable to only one self-occupied property.

What is a power of attorney?

A power of attorney permits a person to authorise another person to make decisions regarding their assets, real estate property and finances. There are two types of power of attorney  – general power of attorney and special power of attorney.

What is the function of CREDAI?

The function of CREDAI is to engage in creating policies with government including Ministry of Housing and Urban Affairs, Forest and Climate change, Ministry of Environment, Ministry of Finance, Ministry of Labour and Employment agencies. The policies will be directed towards improving transparency in the country’s real estate sector.

What are the documents required for possession of property?

The documents that you will require at the time of possession are original receipts of stamp duty and registration charge payment, original share certificate, original copies of building plan approval and chain of title agreement, proof of payment of property taxes, maintenance charges, phone, water, electricity bill, etc.

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Disclaimer: This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The article may also contain information which are the personal views/opinions of the authors. The information contained in this article is for general, educational and awareness purposes only and is not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision, whether related to investment or otherwise, taken on the basis of this article.

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