What are some of the best areas to invest in real estate in Mumbai?
I was recently asked this question by a close friend. It made me realize how common this question is for a lot of consumers. It doesn’t matter whether you are seasoned investor or a first time purchaser. Real estate is always an investment from both aspects. The following was my advise to my close friend. It is the same advise, that I will give to all the genuine property purchasers.
To answer your question there are some things you should first be clear on.
- How much do you want to invest?
- Is this purely for returns or invest in your first home?
- If it’s only for monetary returns then what type of annual ROI are you expecting?
- Are you looking at rental income or appreciation income?
- If rental income then do you want commercial or residential properties?
It’s only after answering these questions, can you actually come to some clarity as to where can you invest in Mumbai?
Mumbai’s real estate industry is nothing like the rest of the country. It is an anomaly to the entire country. Pockets of Mumbai see prices sky rocket while short distance away those same prices are stagnating.
The biggest example is commercial real estate. South Mumbai commercial properties have taken a huge hit. This is due to movement of corporates from the older structure to newer state of the art buildings in BKC and Andheri East. Accessibility is easier now with the proven Metro Rail. Prices have remained constant in these areas for the last few years.
Let’s talk about residential properties. The prime western suburbs of Bandra & Juhu have seen an overall dip in sales. However, sales in northern suburbs such as Andheri, Kandivali, Goregaon have been steady. The main difference is affordability. It is still possible to own a reasonably sized 2 or 3 BHK apartment in Northern Suburbs with a modest loan.
Central suburbs of Mulund, Chembur were a hot commodity to invest in till 2015. Prices there are also inflated now. The costing of some of these apartments are same if you were to buy in Eastern suburbs such as Santacruz East or Vile Parle East. Infact it is cheaper to purchase in Borivali East than in Chembur. It’s your preference where you would like to reside.
You also have to consider if you wish to invest in ready to move properties or in under construction properties. The returns in ready to move is less but they are much safer. On the other hand, under construction properties give better returns. There is also way more risk involved in under construction properties. Do you have the capacity to hold when construction is stalled?
Investing in real estate is safe but expensive. Investing in real estate is not easy either. It takes a lot of guts and a final leap of faith. I have seen investors making good returns in real estate. But what I have seen more are individual who come saying “I wish I had invested in real estate!”