Rising Home Rentals Woo Investors to Residential Sector

Home rentals are increasing in all the top cities of India. Higher flow of population, lower supply of housing units, etc. are key factors which determine the home rentals.

MUMBAI: Population from rural areas is flowing to the big cities. This higher flow of population causes higher demand for housing units in these cities. Along with the increase in demand, the home rentals too increase.

Demand and supply determines the price of every commodity. This is nothing different in the case of home rentals. While the higher demand causes higher rentals, higher supply will result in lowering of rentals. On the other end, the rentals will be more if the supply is short.

Yet, it is to be noticed that there are other factors which determine the home rentals. Property prices are one of the main factors. Though the rentals and property prices are not going hand in hand, it certainly impacts the rentals.

Normally the rentals for homes in an area, where the properties are not high priced, are low. On the other end, it will be higher if the property prices are higher.

Moreover it happens the other way round too. The property prices are higher where the rentals are higher. This is because the investors are keen to have investment in the properties which generates regular income.

Housing rentals are normally considered as regular income. So the number of those who invest properties which generate regular income is increasing. In short higher rentals boost the sentiments of investors.

As long as the rental homes are the best available option for the migrants, the investment on residential projects will be better. Though commercial projects are also providing good rentals, they are not as good as the residential properties.

For majority of the migrants owning a home is not as easy as it would ever be. High reaching property prices block them from owning a home. So it leaves a better option for the investors to invest in residential properties which will offer higher returns in the form of monthly rentals.

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