Investing in Residential Real Estate in the Post-Covid Scenario

Real estate has been considered a sound investment asset in the Indian tradition. The Covid-19 pandemic has reaffirmed the significance of realty as a stable investment asset against alternative classes, such as shares, mutual funds, etc. While commercial real estate is a highly sought-after segment due to its resilience and regular income potential, residential real estate is relatively more accessible and allows seamless management. Nevertheless, investment in the residential asset should be carried out with due diligence considering several factors. Moreover, Covid-19 has prompted the rethinking of investment decisions to hedge against risks. The pandemic can be regarded as an inflexion point for real estate as it has reformed the sector for the better.

Here are the top factors to consider while investing in residential real estate in the post- Covid scenario.

Choice of City: If you are looking to purchase a residential property from an investment perspective, the city is the primary factor to be considered. Real estate is a dynamic industry, with each market having its inherent strengths and weaknesses and supply-chain dynamics. Cities witnessing rapid infrastructural developments, generation of employment opportunities, thereby encouraging immigration of youth, will command an obvious advantage over others.

Connectivity: The property should be accessible via a sound public transportation network. Projects located in the vicinity of metro systems or bus stands generate a higher return on investment than those not readily accessible by mobility systems.

Social Infrastructure: The residential offerings located in micro-markets with knowledge-based jobs fuel migration from other cities, thereby swelling population and generating demand for basic amenities such as the provision of food and housing. Proximity to educational and healthcare institutions and retail facilities boosts residential realty and leads to a multiplier effect on the local economy.

Developer’s Track Record: Verify the developer's track record and his arrangement for financing the project.  Timeliness and transparency should be considered while determining the developer's credibility in the industry. Covid-19 has also provided a fillip to customer centricity and superior experience as crucial metrics for evaluating a developer's potential. The post-Covid era is poised to witness the consolidation of the industry.

Outdoor Spaces and Density of Amenities: Aesthetically designed residences with superior floor plans and state-of-the-art amenities and provision for outdoor spaces inevitably find favour among homebuyers. The health and wellness concerns amid Covid-19 have reaffirmed the significance of homes as an address to ensure overall well-being. Hence, homes with patio, balcony decks, gazebos have emerged as sought-after assets. Moreover, properties located amidst verdant greenery and exemplifying eco-friendly amenities are gaining traction among homebuyers. While it is prudent to assess the density of amenities, it is equally significant to determine the functional usability of these amenities. The per capita density of amenities, indicating that it is an essential metric for accessibility during peak demand, should also be considered.  

Design and Layout: The Covid-19 pandemic has prompted the reconfiguration of the design and layout of homes to accommodate a segregated workspace. Typically, people pay attention to the overall carpet area and ignore how much of this carpet area has been laid out.  Additionally, one must examine the master plan and the floor layout plan to assess the proportion and usability of spaces. Homes with terraces, open-air balconies are gaining currency as key to maintaining wellness.

Legal compliances: Ensure that the project has development plans and complies with all statutory requirements. Exercise utmost due diligence while ascertaining property’s title without relying solely on home loan firms on this aspect. 

The Indian residential realty offers a plethora of options to choose from apartments, penthouses, villas, independent floors depending upon one's requirement and budget. The prospects of economic stability and regaining pace of business activities augur well for the growth of the residential segment in H2 2021. 

The author is Director, Mapsko Group

DISCLAIMER: Views expressed are the author's own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.