The Indian real estate market is showing strong signs of growth in the financial year 2023. The market is expecting an upswing due to the favourable economic conditions in the country. With the rapid appreciation of the US dollar against the Indian National rupee combined with the housing market collapse in the USA, India is quickly becoming the preferred destination for residential real estate investments. Let us learn more about why buying a studio apartment is a great investment in 2022.
A large number of NRIs and investment firms are keeping a sharp eye on the emerging studio apartments sector. According to industry data, NRIs invested over $13.1 billion in the Indian real estate market in 2021, and it was despite the poor economic conditions. As the situation improves, the residential asset class, including studio apartments, is predicted to give high appreciation while being a relatively safer investment.
A studio apartment is a self-contained unit with a bedroom, kitchen and living area in one open space. However, the bathroom is separated from the room by a wall. Studio apartments come with a modern and minimalist design that appeals to the younger generation. The open space allows you to move freely and maintain a clutter-free lifestyle. You can find detailed information here: What is a studio apartment?
Studio apartments, also known as studio flats, first gained popularity in the west due to affordability, unique layout designs and increasing demand for compact spaces. Today, you can see the impact in metro cities like Mumbai, Gurugram, Noida, Chennai, Bengaluru, Pune, etc, where construction space is limited and demand for properties is higher.
Investing in a residential property can be incredibly rewarding and exciting when you make the right choice. Studio apartments are a great source of rental income because they are in high demand, especially in high-density areas such as Mumbai and Gurugram. There are many people who are looking for affordable housing options, and studio apartments fit the bill. In our research, we found a clear uprising trend for queries such as "studio apartments in Gurgaon" and "studio apartments for sale" on Google.
Studios are typically smaller than other apartments, making them more affordable for tenants. Additionally, studios usually have fewer amenities than larger apartments, so they tend to be less expensive to maintain. As a result, you can often charge higher rents for studio apartments than for other types of apartments.
Another advantage of investing in studio apartments is that they tend to be easier to rent than larger apartments. It is because there is usually a greater demand for smaller, more affordable spaces. Tenants who are looking for a place to live on a budget are more likely to rent a studio flat than an apartment with multiple bedrooms. As an investor, this means that you will have a lower vacancy rate and will be able to generate a steadier stream of rental income.
Investing in real estate is always a smart move. And with the rising property prices, now is the perfect time to invest in real estate. Studio apartments offer investors a great return on their investment due to the high resale value of these modern properties.
On average, home prices have increased by about ten per cent yearly between FY 2010-11 and FY 2020-21.
However, this graph represents the all-India average growth rate. Now, let us take a look at the return on investment across top-performing cities between Q1 FY11 and Q1 FY21.
The property prices in India took a minor hit amid the roaring inflation and the Russia-Ukraine crisis. But the real estate market has absorbed the impact and is on a steady incline. Owing to increasing demand, developers have started hiking the rates, which may continue to increase in the next few years. High-density areas such as Gurgaon have the highest probability of experiencing high appreciation for studio apartments in the near future.
According to a report, Airbnb's unique properties in India saw a 30% increase from 2019 to 2021 for nights booked and earned more than INR 250 million in 2021.
Becoming an Airbnb host allows you to generate passive income from your spare residential properties. You can use your studio apartment to host guests from all over the world. Not only will you earn money from renting out your space, but you'll also get to meet new and interesting people.
The process of becoming an Airbnb host is quite simple. First, create a profile on the Airbnb website. Be sure to include photos of your apartment and write a detailed description of what guests can expect when they stay with you. Once your listing is live, you can start promoting it on social media and other online platforms.
Airbnb releases your payment within 24 hours after a guest checks into your place. It ensures that you have regular cash flow instead of a monthly payment. And when it comes to the rent, you can charge anywhere between INR 2000 to INR 8000 per day for your studio apartment. Of course, you can charge more or less, but make sure you demand a feasible amount to get enough footfall.
Buying a studio apartment is the perfect option to start your real estate investment journey. You can expect relatively high asset class appreciation and good rental income without investing a large chunk of your capital. If you are looking to expand your investment portfolio, you can take a look at the 70 Grand Walk project in Sector 70, Gurugram. It is one of the fastest growing residential sectors with connectivity to Southern Periphery road and Golf Course road.