Things you should consider before buying property for rental income

Things you should consider before buying property for rental income

You should consider before purchasing one because the lure of rent may not balance out the costs you incur in the long run.

Are you buying property for rental income? If yes, here are the things you should consider before purchasing one because the lure of rent may not balance out the costs you incur in the long run.

ASSUMPTIONS

Cost of property: Rs 65 lakh
Rental income: Rs 20,000 a month

HOME LOAN

Amount: Rs 52 lakh
Tenure: 20 years
Interest Rate: 10%

When do you recover the cost?

Rental income helps recover the cost of property earlier, but it also depends on whether you have taken a home loan or not.



Top rental yield grossers

Rental yield is a factor of the changes in rental values localitywise vis-a-vis the changes in capital values. Given below are top yield grossing localities in each city.

Source: Magicbricks.com PropIndex (Jan-Mar 2012)
Pros & Cons of buying a rental property

While the rental income may be a big attraction, there are some disadvantages to buying property for letting out as well. Here's what you should consider before picking one.



How to buy a property for rental income

Here are the areas and features you should focus on while buying property that you plan to rent.


Source : ET BUREAU