Guide for Raichur Commercial Real Estate Investment
The city of Raichur is located in the northeast part of Karnataka. It is a popular tourist spot as it has a number of monuments which were built during the Vijayanagara empire era. It is known as the rice bowl of India as it has fields of rice and paddy, which are exported to different countries. Hence, Raichur is a prominent city with commercial opportunities in both tourism and food production.
Let us understand how investing in commercial real estate in Raichur might help you earn great returns on investment.
Top Reasons to Invest in Raichur Real Estate
Here are some of the reasons why you might want to invest in real estate in Raichur:
Raichur fort is one of the historical attractions in the district. Another notable town is Anegundi which has monuments back from the time of the Vijaynagara empire. There are various temples as well that act as tourist spots. Therefore, investing in commercial properties like hotels and restaurants might be profitable here.
Raichur has a good trading market in the cotton industry and has gold resources as well. Raichur Thermal Power Station, situated at Shaktinagar, generates electricity for Karnataka. According to resources, with the advantage of location and ability to absorb modern technology, this location is in its take-off stage in regards to industrial growth.
Commercial Real Estate Investment Opportunities in Raichur
Here are some of the places which are suitable for commercial real estate investment in Raichur:
- Azad Nagar
This locality has great connectivity in terms of railways, with a railway station which is only 2 km away and a bus stop, which is just 500 m away. There are a number of shopping malls like Vishal mart and Reliance mart, making it an apt retail location worth investing in.
- Androon Quilla
This area has good transport facilities with great cab and auto facilities. Both bus stand and the railway station are within walking distance. It has great rating when it comes to safety and lifestyle and therefore is a great residential area. Therefore, if you are planning to invest in commercial real estate, investing in shops and hotels might be truly worth it.
Things to Consider Before Buying a Commercial Property in Raichur
Here are some of the points that you should keep in mind before buying a commercial property in Raichur:
- RERA Authentication
The Real Estate Regulatory Authority (RERA) is a body that looks into the transparency and accountability of the real estate sector in India. This body was established after passing of the Real Estate Regulatory Authority Act of 2016. Therefore, before buying a property in Raichur, make sure to check the authenticity of the builder as well as the property by visiting the official RERA Karnataka website.
- Analyse Neighbourhood
Location of your investment is imperative as there might be some locations that get less affected during an economic downturn. Additionally, checking the connectivity via road, rail and water is necessary as it might be instrumental in getting great ROI.
Stamp Duty in Raichur, Karnataka
Stamp duty rates are different for different states and are levied on the basis of the market value of properties. Following are the rates of stamp duty applicable in Raichur, Karnataka:
|Property Value||Stamp Duty|
|Less than ₹20 lakh||2%|
|Between ₹21 lakh and ₹45 lakh||3%|
|More than ₹45 lakh||5%|
Registration Charges in Raichur, Karnataka
For both individually or jointly owned (male and female) properties, the registration charges are equal in Raichur. Here is the rate of registration charges applicable in Raichur:
|Property Value||Registration Charges|
|Less than ₹20 lakh||1% of property value|
|Between ₹21 lakh and ₹45 lakh||1% of property value|
|More than ₹45 lakh||1% of property value|
Raichur Commercial Real Estate Sector: What’s the Forecast?
While the starting price of a property in Raichur might be around ₹80 per square foot, the average price of property here may range around ₹5,124 per square foot. These price trends show that both buying and selling properties in Raichur might be profitable at the moment.
Most expensive properties in Raichur may range around ₹20,000 per square foot. According to reports, property registration has continued its upward trajectory. Therefore, investing in commercial real estate in Raichur might be a profitable venture.
Commercial Real Estate vs Other Asset Classes
Following is a comparison between commercial real estate versus other asset classes and the returns they generate:
Commercial Real Estate vs Gold
Real estate requires a much higher quantum of investment in comparison to gold. However, gold is highly volatile and risky in comparison to real estate. However, gold is more liquid as it can be easily converted into cash.
Commercial Real Estate vs Bonds
Real estate offers better inflation-beating returns, which is not the case with bonds, as it offers almost fixed returns. Bonds are, however, much more secure in comparison to real estate. Additionally, bonds are highly liquid investment options.
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Commercial Real Estate vs Residential Real Estate
Investing in commercial real estate offers you better returns in comparison to residential real estate. Tax benefits are, however, more in case of residential real estate if you get the property using a home loan.
Commercial Real Estate vs Stocks & Mutual Funds
Stocks and mutual funds offer much higher inflation-beating returns which is not the case for returns generated from real estate. However, commercial real estate investment offers you the opportunity to earn passive rental income, which is not the case with stock-oriented investments.
Here is the tabular representation of comparison between different types of assets on the basis of returns, liquidity, risk, volatility and ticket size:
|Parameters||Commercial Real Estate||Stocks & Mutual Funds||Gold||Residential Real Estate||Bonds|
Steps to Invest in Commercial Real Estate in Raichur
Here are the steps that you can follow if you wish to start investing in commercial real estate in Raichur:
Step 1: Fix your investment budget.
Step 2: Search online about the city’s most profitable and developed areas.
Step 3: After finalising some potential sites, plan a field visit to each one of them to look into the infrastructure and amenities available nearby.
Step 4: After finalising a property that suits your requirements, prepare the necessary documents like title deed, sale agreement, property assessment extract, foundation certificate, etc.
Step 5: Complete the payment process. Make sure to pay the stamp duty and registration charges to register the property in your name.
It is wise to opt for a property only after confirming whether it adheres to the norms of RERA or not. If you do not check this, you might face many legal complications in the future. Also, opting for an insurance policy for your property might be helpful if there is any damage to your property and you do not have the necessary funds to repair it.
Frequently Asked Questions
What is property registration?
It is the procedure of registering the official documents related to transfer, lease, sale or any other type of disposal of immovable property. Registering property is compulsory as per section 17 of Indian Registration Act of 1908. After registration of the property in your name, you become the lawful owner of the property.
What is home insurance?
If you purchase a home insurance policy, you get financial coverage for private residences. This way, you can protect your finances in case your property incurs any damage from natural and man-made disasters, unpredictable damages, burglary and theft.
When and why should I hire a commercial real estate broker?
Hiring a commercial broker might be required if you wish to save money and time while searching for a good property. As the broker is well aware of the nuances involved in transactions of the property market, he/she might offer you better deals.
How to verify the documents while buying a property?
When you are buying a property, project approval can be cross-checked from the sanction authority’s office or corporation. While ownership documents can be verified from Sub Registrar’s office, where the property has been registered.