New Launch Properties: Smart Way to Earn Higher Rent

Real estate is one of the surest methods of accumulating wealth, although it is not only about having a house.To most of the investors, it is also important to earn a constant rental income.New launch property has been more popular than any other kind of real estate due to its greater potential of rental and long term appreciation.

We will discuss in this blog what new launch properties are, why they can raise the rent income, what factors primarily cause the growth of rent, and some tips of the trade to get the best of it.It is a simple and easy guide to be followed by the beginner as well as by the experienced investors.

What are New Launch Properties?

New launch properties are those that are either announced or are currently being constructed in either residential or commercial areas.The difference between these properties and resale properties is that it is new as it is still new, they might have the latest facilities and it is constructed using the current standards of construction.

The new launch properties may be of the following types:

• Apartments

• Villas

• Studio flats

Commercial and residential (residential + commercial) mixed.

New launches are more favoured by investors since they normally need fewer maintenance at the beginning stage, are of modern facilities, and their tenancy is easier to get compared to the old structures.

The reason why New Launch Properties can help increase the rental income.

New launch properties are appealing to the rental investors due to a number of reasons:

1. Higher Tenant Demand

Tenants usually tend to choose new properties as compared to the old ones due to the following reasons:

• They are contemporary and attractive.

• Less maintenance and repairs.

• Add comforts such as gyms, parks and security.

• Provide effective designs and contemporary fittings.

• A house which has an appeal to tenants has a higher rate of attracting tenants and therefore a higher rate of charging more rent and less vacancy rates.

2. Lower Maintenance Costs

The property is brand new:

• The building and facilities are new, minimizing the possibility of being in need of repairs.

• Provided that fewer complaints are raised by tenants, the management becomes smooth.

• There are no significant renovations to be performed in a few years.

• This translates to increased net rental income since less amount of money is used on maintaining.

3. Prime Locations Earn Higher Rent

To a significant extent, location is a factor of rental income.Numerous new launch projects are strategic in their locations close to:

• Metro stations, highways and transport centers.

• Schools, universities, hospitals and shopping centers.

• Business and IT parks.

• Households in these areas tend to fetch higher rentals as they like convenience and lifestyle amenities that come with it.

4. Better Rental Yield

Rental yield is a key indicator to an investor since it indicates the amount of income that you can receive based on the price of the property:

• Rental Yield is calculated by dividing the annual rent by the property price, then multiplying by 100

• New launch properties normally sell at a low price as compared to fully constructed property in the same location.This in addition to an increased rent potential occasioned by modern facilities and strategic locations, usually leads to higher rental income as compared to resale.

5. Rent + Appreciation: Dual Benefits.

There are two benefits of investing in new launch properties:

• Rental Income- Annual income received monthly by tenants which may increase with time.

• Capital Appreciation – Enhancement of the property value as the project is developed and the surrounding is developed.

This renders new launches a prudent long term investment giving it consistent cash flow and wealth growth.

Factors Causing Rental Income in New Properties During Launch

Not every new launch has the same benefit of rentals.The following are the primary variables that determine the rental income:

1. Location

• Homes that are located close to employment, educational and commercial centers attract high rent.

• The future infrastructure development such as highways and metro lines can contribute considerably to the demand of rental in the long run.

2. Amenities and Facilities

• The amenities offered to the tenants such as gyms, swimming pools, parks, security and clubhouses are things that the tenants are ready to pay more.

• New entries that provide high end facilities can rent 1020 percent more than those without such characteristics.

3. Builder Reputation

• Established builders will be able to attract more tenants since the buyers will be assured of the quality and prompt delivery of the house.

• The popularity of a developer also adds long term resale value and rentability of the property.

4. Neighborhood Growth

• Rental demand is more in areas that have a high number of employment opportunities, large number of students, or an increase in business.

• The growth corridors usually receive higher rent appreciation than the already saturated areas.

5. Property Size and Layout

• These layouts are well planned and have good ventilation, natural light and use of space which attracts tenants quicker.

• Housing with 1-2 bedrooms tends to be rented quicker than bigger places, yet bigger places are able to provide better absolute rent.

Rental Income maximization tips.

• Survey the Rental Market: Research comparable properties within the vicinity in order to determine competitive rent.

• Find Properties that are modernized: Facilities such as gyms, parks and security appeal to elite tenants.

• Target Growth Areas: Homes located in developing areas tend to increase in their rent at a faster rate.

• Keep the Property in Good Order: Although new properties require cleaning and regular repair to ensure that the tenants are satisfied.

• Timing Matters: Near possession projects can be considered in order to begin to receive rent earlier than to wait 2414 years.

Frequently Asked Questions

Q1. Is new launch property superior to resale property to rent?

Yes, since they are easy to attract tenants, less maintenance and most of them come with modern amenities.

Q2. What is the time taken to rent a new launch property?

It is dependent on the stage of construction.The near possession properties can be rented without delay and under construction properties can require 1-4 years.

Q3. Is location something that really influences rent?

Absolutely. Homes that are in the vicinity of workplaces, education institutions, and transportation centers have greater renting capacity.

Q4. What is the calculation of rental yield?

To calculate rental yield, divide the annual rent by the property’s price and multiply the result by 100 to get a percentage.It assists in evaluating the payback.

Q5. Is rental income taxable?

Yes. Under income from house property, the income received by rent is taxable.Maintenance, loan interest and taxes are deductible.

Conclusion

New launch property is a smart investment one can make to get increased rental income.These properties will be occupied fast due to appropriate location, builder and facilities, fetch high rent and have low maintenance.Moreover, you enjoy long term capital growth and new launches are an ideal investment as far as consistent rental income as well as accumulation of wealth.Through proper planning and selection of the appropriate project, investors are able to maximize the rental income with the added advantage of the appreciation of the property value with the passing of the time.