Ultimate Guide for Bangalore Real Estate Investment

Ultimate Guide for Bangalore Real Estate Investment

Ultimate Guide for Bangalore Real Estate Investment

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Bangalore, the capital city of Karnataka, is one of the fastest-growing cities in India. It accounts for some of the large IT investments in the country. It is situated around 3, 113 Ft. above sea level in the Karnataka Plateau and the home to a population of around 12 million people. The population has been rising in Bangalore ever since 1950 as the city started investing largely in the education and public sectors. With all the developments in the commercial sector, Bangalore opened up thousands of employment opportunities for people in and out of Bangalore. 

The city was known for its manufacturing industries before 1990 after which new national economic liberation policies and strong educational systems encouraged the development of the IT sector in Bangalore. After the massive development of the IT sector, Bangalore turned into an IT hub that hosts several national and international companies.

Bangalore Demography

Bangalore, the Silicon Valley of India has an estimated population of around 12, 764,935. The population of Bangalore can be further divided as 41% Kannadigas, 25% Tamilians, 14% Telugites, 10% Keralites, 8% Europeans, and 6% a mixture of all races.

Bangalore Demographic

Kannada is the most commonly used language along with languages such as Tamil, Telugu, Hindi, Malayalam, Marathi, Konkani, etc. The Telugus and Tamilians also share a long history in the capital city of Karnataka along with the Kannadigas, as most of them migrated to Bangalore for better livelihood, the standard of living, education, etc. The male and female sex ratio of Bangalore is 908 females to every 1000 males. The current literacy rate among the Kannadiga female population is 84.8% while the male population accounts for 91.82%.  

The real estate sector has been booming in Bangalore over the past few years. One of the main questions while planning an investment in Bangalore is the land rates. It is the fourth most expensive city to invest in India and the real estate demand is driven by professionals that are looking forward to prospering their living standards by settling in Bangalore. Let us further understand the land rates and pricing trends in different parts of Bangalore. 

Land Rates in Bangalore

The land rates in Bangalore vary from one area to another. The average cost of investing in Koramangala is around Rs 5,820 per sq. ft. while rates in Rajaji Nagar are Rs 11,100 per sq. ft. Properties in Ashok Nagar cost around Rs 22,780 per sq. ft. while Malleshwaram around Rs 12,200 per sq. ft. 

The price of the property varies based on its proximity to commercial centers, schools, colleges, hospitals, shopping complexes, hangout spots, provision stores, etc. Improvised infrastructure and connectivity are other add-ons to the rates imposed on the property. The value of the property also varies depending on whether the property belongs to the Khata A or Khata B list of properties.

Land Rates in Bangalore

Bengaluru Real Estate Market Forecast 2021

The Bangalore market has struggled during the pandemic as it halted business activities. Several offices were closed down and business suffered due to this. The prolonged lockdown period led to the decline in demand for traditional office spaces in Bangalore as people started working from the comforts of their own homes.

Bengaluru Real Estate Market Forecast 2021

The pandemic not only affected the commercial real estate sector. It also had a huge impact on the residential real estate sector as well. The main force driving the realty sector in Bangalore is its business activities and when offices were shut, people started migrating back to their hometowns and this, in turn, affected the residential real estate market. Some people also lost jobs and this further made them reluctant to make any huge investments. 

Thus the government took several initiatives to revive the real estate market. Some of the initiatives taken by the government include:

  1. Stamp duty reduction for affordable housing units
  2. Facilitating digital home buying
  3. Robust connectivity and infrastructure
  4. Builder discounts and reduced price of the property. 

Riding on all these measures the Bangalore market is expected to recover itself in 2021 while keeping eyes on new trends.

RERA Karnataka

The Real Estate (Regulation and Development) Act, 2016, is a very prominent legislation introduced with the objective to bring in transparency and accountability in the real estate sector. The Karnataka government notified the RERA Karnataka Rules in 2017.

The RERA Act mandates the registration of real estate agents and builders. The Act also mandates the registration of projects. All the registration processes can be carried out through the government portal of the Karnataka RERA. Some of the documents required by builders for registering themselves include PAN card, a title deed, encumbrance certificate, completion certificate, etc. on the other hand the documents required by a real estate agent include PAN card, photograph, details of his company, etc. For the registration of the projects, it is necessary that you submit documentation such as the tax receipts, commencement certificate, sanctioned plan and layout, sales agreement, advocates report, etc. 

The Karnataka RERA also provides some rules for advertisement and some of them include that:

  1. The digital portals are to be self-maintained. 
  2. Mention the date of receiving the completion certificate.
  3. The display board at the project site contains the RERA Karnataka Registration number, etc.

Stamp Duty taxes in Bangalore

Stamp duty charges are imposed at the time of the sale of the property. The stamp duty taxes have to be paid mandatorily in accordance with the provisions of Section 3 of the Indian Stamp Duty Taxes Act. The state government imposes the stamp duty taxes. Some of the factors affecting the stamp duty taxes include the age of the property, age, and gender of the titleholder, the location of the property, etc. 

The different stamp duty rates in Bangalore has been mentioned in the table below:

Type of property

Stamp duty

Registration charges

Properties less than Rs 20 lakhs

2%

1%

Properties priced between Rs 20 lakhs to Rs 35 lakhs

3%

1%

Properties priced between Rs 35 lakhs to Rs 45 lakhs

3%

1%

Properties above Rs 45 lakhs.

5%

1%

You can calculate the stamp duty charges online through Kaveri which is the official government website.

Investment opportunities

Real estate investment has been recognized as one of the best forms of investment as it is appreciated over time and also stands as security for a long time. It also provides you with rental income if invested in rental properties. Bangalore has been treated as one of the best spots for real estate investment. Bangalore is booming and this offers investors a better livelihood, better standard of living, and also better capital appreciation. Some of the factors that make Bangalore a hotspot for investment are listed below:

  1. Growing investments in the IT sector
  2. Proximity to the prime locations
  3. High rate of appreciation
  4. Peaceful living
  5. good returns

Best location for real estate investment in Bangalore

Some of the best locations for real estate investments include North Bangalore regions such as Hebbal, Devanahalli, Yelahanka, and Hennur Road have been recognized as the best spots for real estate investments. The South Bangalore regions such as the BTM Layout, Silk Board signal, Bannerghatta Road, Jayanagar, JP Nagar, Electronic City, Sarjapur Road, etc. are also good for investments as they are proximate to prime locations. Whitefield in the East Bangalore region and Nayandahalli in the west Bangalore region has also been a great spot for real estate investments.  

Commercial real estate investment in Bangalore

Bangalore has been a hotspot for commercial real estate investment. Bangalore has also been referred to as the silicon valley of India due to the presence of several IT companies operating on its soil. Investing in commercial real estate is more profitable than investing in residential real estate property as it earns the investor better capital appreciation and income in the form of rent. While planning investments in the commercial real estate sector, you can invest in office spaces, malls, showrooms, retail, etc. Even though investments in commercial real estate may be a little expensive, it is definitely more yielding compared to other real estate sectors.

Best location for commercial real estate investments

The North Bangalore region is one of the best options for commercial real estate investments as it is the fastest-growing locality in Bangalore. Hebbal, Hennur Road, and Thanisandra Main Road are some examples of localities offering good commercial investment options. Outer Ring Road, Marathahalli, and Whitefield are some of the other great locations for real estate investments.

Residential real estate investments in Bangalore

The Bangalore realty market has been a hotspot for both commercial and residential investments. The demand for residential real estate arises mainly from the professionals that shift from different parts of Karnataka and India in search of better employment and standard of living. Bangalore offers its citizens a great quality of life as education, healthcare, and recreational activities are offered at their best. 

The Bangalore residential market comes with both monthly benefits and capital appreciation. The increased number of youth, migrating to Bangalore in search of jobs or for educational purposes, tends to lead the charts for rental demand in the city. By investing in residential rental properties, the investor is assured of tenants and also a good monthly income in the form of rent.

Best location for residential property investments

Some of the best locations for residential property investments include:

  1. Whitefield
  2. Sarjapur Road
  3. North Bangalore
  4. BTM Layout
  5. Nayandahalli
  6. Kanakapura Road, etc. 

Most of these locations mentioned above are proximate to the commercial hub of Bangalore and thus climate excess charges on transportation fee to your workplace. They also come with amenities such as healthcare, education, shopping centers, and other recreational benefits. All these factors have made them hotspots for residential real estate investments. Affordable housing units have been considered to be the most profitable form of investment comparing it to the mid-housing segments and luxurious housing units.

Industrial investment opportunities in Bangalore

People usually prefer to invest in either residential real estate property or in the commercial real estate sector. Many are still not aware of the scope of industrial property. Industrial real estate property is a little expensive investment but it is one of the high-earning real estate investment options. You should invest in industrial real estate property as:

  1. It offers a high return on investment
  2. Industrial real estate property is rented on long leases
  3. The investors need not pay tax as in the case of industrial properties, the tenants usually pay the tax on the property.

The fact that industrial property is an expensive investment and it might be difficult to get tenants unlike residential real estate property are some of the disadvantages of investing in industrial real estate property. 

Best place for Industrial property investments in Bangalore

Some of the best locations for industrial real estate investments include Peenya Industrial Area, Doddanakundi Industrial Area, SSI Industrial Area, Rajaji Nagar, DDK Industrial Area, 1st Phase, Petechannappa Industrial Area, Kiadb, Dobbaspet, Bidadi Industrial Area, Dyavasandra Industrial Area, Jigani Industrial Area, Kumbalgodu Industrial Area, etc.

Top reasons to invest in Bangalore real estate

Real estate investments in Bangalore are never disappointing as it is booming and the demand for commercial and residential real estate property is increasing. The city offers better employment opportunities and also a better standard of living. The city has also advanced in technology, transport, connectivity, luxurious establishment, etc. Some of the top reasons to invest in Bangalore include:

  1. Bangalore is the IT hub of India and referred to as the Silicon Valley of India due to which several IT professionals shift to Bangalore in search of jobs. 
  2. Bangalore real estate offers a higher return on the property. 
  3. The tax benefits by investing through leverage
  4. Bangalore also has a steady real estate market. 
  5. If investing now, you may buy a property at a much less cost as stamp duty has been reduced for affordable housing units, and also the builders offer certain discounts to make properties more accessible for clients. This is due to the prevailing pandemic conditions.

Pros and Cons of investing in Bangalore Realty Market

All investments have advantages and disadvantages. Some of the key advantages of investing in Bangalore real estate includes:

  1. Higher return on investment
  2. Better rent
  3. Superior connectivity and infrastructure
  4. Better standard of living and access to amenities such as schools, colleges, healthcare units, shopping centers, etc. 

Despite all these advantages, Bangalore investments have disadvantages of being expensive and the outskirts of Bangalore city is not as secure as it is in the main city. The developments of some of the neighborhoods in Bangalore are also not certain. 

How to Invest in Bangalore Real Estate with Assetmonk

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    Bangalore Real Estate Investment FAQ's:

    Yes, real estate investment in Bangalore is a good option as it earns the investors a high return on their investment. Bangalore is a city with a large migrant population and thus by investing in rental real estate property, you can also earn a good and stable income in the form of rent. Bangalore city offers a better standard of living a better livelihood and also a modernized lifestyle. Thus investing in Bangalore is a good option.

    You can invest in wholesale by conducting property research of the local market and curating a buyers list in the area you are planning to invest in. you are also required to secure funds to invest. Then you may start to invest by searching for the most potential wholesaling properties. It is recommended that you conduct thorough due diligence and review various properties before finalizing your investment.

    Investments in commercial or industrial real estate can be a good option as they earn you high rental incomes. In the case of industrial real estate property, you have the benefits of long-time lease agreements. However, finding tenants may not be easy for these types of properties like it is for residential real estate property.

    The Bangalore real estate market is booming and has been an attractive spot for investment. The pandemic has brought in certainties however, the government and the builders have taken efforts to ensure that properties are available to buyers at many affordable rates. The government has reduced stamp duty tax on affordable housing units and the builders have also given discounts to help the buyers invest at a much affordable rate.  

    Some of the best locations for real estate investments include North Bangalore regions such as Hebbal, Devanahalli, etc.; South Bangalore regions such as the BTM Layout, Silk Board signal, Bannerghatta Road, Electronic City, Sarjapur Road, etc.; Whitefield in the East Bangalore region and Nayandahalli in the West Bangalore region.

    Yes, investments in flats is a good option as the population of Bangalore is increasing and many are migrating Bangalore in search of jobs and education. By investing in flats, you can both secure your home or give it on rent and earn rental income. 2BHK and 3BHK have been the most demanded type of property.

    Bangalore real estate is booming with the increasing number of commercial investments in the city. The city has several IT companies which have been instrumental in opening up employment opportunities for the youth. The supreme infrastructure and connectivity are some of the other reasons why the real estate market is booming in Bangalore.