Did
You Know? - What is the Residential house Rental Yields in India?
Residential
rental yields in India are among the
lowest in the world.
They
stand at a measly about 2% or so.
That
is the amount of rent you pay per year relative to the market value of that
property. So, even if you had the money to buy a home/ flat, should you?
Looked
at another way, renting a home is the equivalent of taking a loan at an
interest rate of 2% per annum.
For
just Rs. 20,000 every year, you get to use an asset worth Rs. 10,00,000. You could use it
to invest.
Even a simple bank fixed deposit
(FD) earns close to 9% today. Subtract the 2% rent you pay and that leaves you
with a 7% surplus accruing to you every single year.
And if you are able to make
investments that safely earn an even higher rate of return, your edge would be
even larger than that 7%.
Over the years, this edge can make
a mammoth difference to your wealth.
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