Real estate in India has emerged tremendously over the years. However, the rapid urbanization and the growing population have led buyers and investors to shift their focus from metropolitans to offbeat places. Offbeat places where serenity resides in harmony with the hustle and bustle of the city. The beautiful beaches, relaxed lifestyle, lush greenery, and diverse population are the attractive forces for investment in the state’s Real Estate industry. Goa offers investors and buyers the perfect setting they are looking for. Today, foreigners and Indians have made Goa their second home. And this has led to the settlement of many trusted Real Estate developers in Goa. However, even today, many people wonder if Real Estate investment is good. So let us help you understand why it is a good thing to invest in Real Estate in Goa.
Is Real Estate in Goa a Good Investment?
Without any further ado, let’s jump onto the reasons why Real Estate in Goa is a good investment:
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A Significant Attraction For NRIs
Goa has always been a favorite location for non-residential Indians. And what’s more interesting is that there is an upward trend of NRIs investing in Goa’s real estate industry. As per surveys, most NRIs consider Goa as their investment location after metros like Gurgaon, Mumbai, and Pune. There are several reasons for NRIs choosing Goa, but the thriving tourism industry is the topmost reason. Because of the impeccable tourism, the chance of great returns on investment in Real Estate is very high. It is said that NRIs who invest in the real estate industry in Goa initially get an average return of 7% to 8%. While the actual return goes as high as 18% to 22%, according to surveys.
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Emerging Startup Culture in the State
Emerging startup culture is the second reason why investing in Goa’s Real Estate is a good decision. Apart from the flourishing tourism, Goa is also emerging as one of the startup hubs in India. It has been possible because of the ‘Startup Goa Policy,’ and bright minds have been applying to jobs here. Because of this, you have a chance for great returns on investment as the demand for rental apartments or villas increases.
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Alteration in Tourism Trends
Another reason why investing in luxury homes for sale in Goa is a smart choice is an alteration in tourism trends in recent years. Confused as to what we are talking about? Well, let’s clear it up for you. Every day, Goa witnesses a flock of tourists from all across the world. Often there is a shortage of hotels for accommodating tourists, leading to the scope of rental villas for vacations. Tourists prefer holiday rentals over hotels these days because holiday rentals offer more freedom and privacy.
Consequently, this alteration in tourism trend has indirectly boosted Goa’s Real Estate industry. You will get an excellent return if you put your property for homestay or as a holiday rental. Because the more tourists visit the state, the more the chances of your listed property being used as holiday rentals.
What is a Good Return on Investment for Real Estate?
A question that comes across the minds of every investor is ‘What is the best return on investment for Real Estate?’. Honestly, it is a question bound to cross your mind regardless of where you are investing. So, what is a good return?
According to the Reserve Bank of India’s House Price Index, the average return on investment for Real Estate over the last decade is approximately 11.6%. As of 2022, it is said that your ROI should fall between 8% to 10% at the least. However, anything above 12% is considered the best ROI by the industry experts. But you have to remember that the ROI on commercial properties will be different than on residential properties. The average ROI for commercial properties falls between 6% and 10%.
As a matter of fact, calculating ROI helps in making an informed decision, not just for trusted Real Estate developers in Goa but across India. After all, the higher the ROI, the higher is profit.
Ways to Calculate Return on Investment for Real Estate!
Return on investment calculates the profit that you make on the investment as a percentage of the cost. For example, if you invest in a property of Rs. 1 lakh and sell it at a price of Rs. 1.5 lakh, your profit is Rs. 50,000. The profit is half of your investment, and hence your ROI is 50%. Mathematically, ROI is calculated as
ROI = Income after deducting cost/Investment * 100.
All in all, it is the standard formula used for calculating return on investment in Real Estate. However, there are two more ways, namely:
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Cost Method of Calculating Return on Investment
The cost method of calculating ROI is used in cash transactions. However, the property must be purchased entirely in cash. The cost method is a simple way of computing, where monthly interests are not taken into account as there are no mortgages. So the net operating income is the overall income that the property generates.
ROI when calculated using the cost method = Net operating income/total investment * 100.
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Out of Pocket Method
Another method of calculating your best return on investments in Real Estate is the out-of-pocket method. Usually, this method is preferred by real estate investors on transactions financed by mortgages. The ROI in this method is calculated by the difference between the income collected and the expenses. As a matter of fact, the out-of-pocket method results in a higher return on investment figures than the cost method. And this is one of the reasons why it is widely used.
ROI, when calculated in the out-of-pocket method, = (Income collected – expenses)/income collected * 100
Today, there are many online ROI calculators that you can use to find out the returns on investing in luxury homes for sale in Goa.
Key Takeaways
- Real Estate never disappoints if you are a calculated investor.
- Given that Goa is on the way to becoming a Real Estate hub, your chances of getting higher returns on investment are likely better.
- However, always look for the pros and cons before investing in any property. After all, you will be shelling out your hard-earned money.
- Riviera Goa, as a matter of fact, is one of the most trusted Real Estate developers in Goa.
- We offer the best amenities, infrastructure, and location, making the living experience extraordinarily comfortable and exquisite.
If you are looking for properties for investment in Goa, then Get in touch with us today!
