2 ways to earn from a real estate property
by reselling property
by renting out the property
Some people consider it safer to invest into the real estate properties of Kolkata to earn more profit. Primarily, there are 2 ways to earn from a real estate property- one is by reselling and the second is by renting out the property (here we will consider the second point). If you are seriously considering about investing in a 2 or 3 BHK flat in Kolkata, follow the steps for a proper valuation of your apartment.
1 Calculation of Annual Gross Rental Yield Pick up average monthly market rent Multiply by 12 to get the gross annual rent income Divide the gross annual rent by the MRP of the apartment
2
Compare the Risk Free Rate with the Annual Gross Rental Yield Risk free rate is the rate of interest on government securities The current SBI FD rate could be considered as risk free Compare the risk free rate of interest with the annual gross rental yield Invest in a property only when it is higher than the risk free rate
3
Calculate the Annual Net Rental Yield ďƒ˜Net rental yield is calculated by dividing the net operating income by the MRP of the apartment ďƒ˜Net operating income is the annual gross rent minus home loan interest, property taxes and maintenance costs ďƒ˜Net rental yields differ with investors
4 Compare the Prices of Apartments and the Rental Expectations Make a proper forecast of expectations Compare the trends online
Make the most out of near-to-perfect predictions
5
Verify with Comparable Sales Gather the statistics of past six-to-twelve months’ comparable sales. Compare a suitable one with your target property price Select the best deal
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