Types of Property Investments in Kerala

Property investments in Kerala are on the rise due to favorable conditions in the real estate market scenario. If you are interested in purchasing property as an investment, you will first have to define your objectives.

There are two main objectives for real estate investments:

1. Capital appreciation – The increase of your property’s value over time.

2. Income generation – The income you earn by renting or leasing out your property.

If you want to attain your property investment objectives, one important factor you have to consider is the time frame of your investment.

The time between the purchase of your property and its sale can be categorized as:

• 1 to 2 years
• 3 to 5 years
• More than 5 years

If your investment is going to be for just 1 or 2 years, it will not be sufficient to satisfy your objective. This time frame is applicable only in a market where lot of speculation (gambling, trading, etc) is happening. Such a market scenario might happen just once in 5 or 10 years and no one can predict it. So, the success of your property investments in Kerala will be hugely dependent on the overall economic scenario of the country.

When you invest for 3 to 5 years, you will get moderate appreciation for your investment. But the best option is to invest for more than 5 years. That way, you are more likely to get better appreciation for your investment and achieve your investment objectives.

Once you’ve decided on your investment objectives, and the approximate time frame of your investment, you will have to decide on the type of property you will be investing in.

10 Types of Property Investments in Kerala

There are a variety of properties available for investment in Kerala. Take a look at the different types outlined below and narrow down the ones you are interested in.

1. Residential Plot

Residential plots are usually smaller portions of land that are ideal for people to build a house where they can live. The advantage of buying a residential plot is that it’s easy to liquidate when the time comes. The disadvantage is that it comes at a higher price per unit of land when compared to other properties.

 

2. House on a Plot

In this option, an independent house is already built on an existing portion of land. You will be purchasing both the land and the house as a single unit. The advantage of buying a house on a plot is that there’s a high potential to live there, or rent it out. The disadvantage is that the use of the property is already decided, so there is less liquidity when compared to a residential plot.

 

3. Villa in a Villa Project

The recent trend in the real estate market is villas in a gated community with common amenities. The advantage of buying a villa is that there is an already existing community, which translates to better livability. The disadvantage is that a villa comes at a higher unit price when compared compared to an independent house.

4. Apartments

Apartments are a dime a dozen, and range from small apartment buildings to mega complexes with multiple blocks. The advantage of purchasing an apartment is that they are easy to buy. The disadvantage is that the resale options are limited – it can only be sold to another individual who wants to live in it.

 

5. Larger Portions of Land

This option refers to bigger plots of land that are suitable for constructing two or more houses. The investment cost will vary based on the location of the property – it’s usually higher within city limits, and lower in the suburban areas. The advantage of buying larger portions of land is that it comes at a lower price for each unit of land. The disadvantage is that it will be difficult to liquidate, unless you divide it into smaller units.

6. Plantations or Farmlands

Plantations and farm lands occupy a large percentage of land in Kerala. The advantage of buying a plantation or farm land is that there is a high potential for regular income. The disadvantage is that there is very low liquidity.

 

 

7. Commercial Property

Commercial property can refer to a standalone shop, a shop inside a building complex, or an entire shopping complex. The advantage of buying commercial property is that it has the potential to generate a regular income. The disadvantage is that if the property does not get any takers who are ready to pay rent, the property itself becomes almost unsellable.

8. Waterfront Plots

Waterfront plots are areas of land that lie on the banks of a water body. The advantage of buying a waterfront plot is that there is a limited availability of such plots, so they are always a precious asset. The disadvantage is that they are niche properties and therefore will cost more. So the initial investment for waterfront plots will be quite huge.

 

9. Holiday Homes

A holiday home is basically a second home with full amenities in a holiday destination. The advantage of buying a holiday home is that the availability is limited, and hence they will always be considered a valuable asset. The disadvantage is that if you want to sell it, there will be less takers when compared to other standard properties.

10. Timeshare Projects

A timeshare project is one where the buyer will retain the ownership rights, but the property will be leased out to another person who runs it. The leasee will have to pay the owner the agreed rent, and also a percentage of the profit generated from the property. You can also make an agreement where the buyer visits the place during the year, and stay free of cost for a fixed number of days.

Timeshare projects are usually more common in popular tourist destinations like Munnar and Wayanad. The advantage of buying into a timeshare project is that it has a high income generation potential. The disadvantage is that the income generation potential is dependent on the overall attractiveness of the resort with respect to hygiene, service, food, facilities, etc.

We hope this article has given you a clearer picture of the different types of property investments in Kerala. Each of them have their own advantages and disadvantages, so you will have to take a final call based on your requirements and your budget.