Why it’s possible to guarantee rental income and value appreciation over apartments in Guduvanchery

Ramyaanbu
Ramyaanbu
Aug 9, 2017 · 3 min read

Apartments in Guduvancheri are able to guarantee rental income and property value appreciation to prospective investors. In fact, some of them are promising a figure in their sale brochures and marketing materials. Considering the claims are being made by reputed firms, is it something that will meet reality and not just look good on paper? If one were to build an apartment in Guduvancheri, will he be able to make the same promise? True real estate in Guduvanchery has grown. What was earlier an underdeveloped, low-income area in the outskirts of Chennai has today made it to the newspapers as a real estate hotbed. But is it worth noting that an apartment in Guduvancheri has guaranteed rental revenue and price appreciation? If that were so, how much of figure can one expect?

The facts:

The price per square feet of an apartment in Guduvancheri figures at an estimated INR 3,785 on an average. Flats are being sold from over INR 2970 to INR 4600 per square feet based on their location along the GST road. Guduvancheri’s real estate growth started around five years back when developers started realizing the potential in the area. Back then the average price per square feet of an apartment in Guduvancheri stood at INR 2300 (avg). It has been an unexpected 64% price appreciation period between 2011 and 2017. But much of it has been a result of a sudden boom in the period between 2010 and 2012. From 2012 the net price appreciation has been slow and steady to reach 20% in 2017. What this means is there hasn’t been phenomenal price appreciation in the recent years.

Today the area is filled predominantly with 2 BHK flats targeted at rental income. Apartments in Guduvancheri are of the 600–1000 Sq Ft cadre more than others. New flats can be bought from anywhere between INR 17 Lacs to 50 Lacs. They are predominantly targeted at lower income sectors with very few luxury offerings. Things being the way they are, these are the factors influencing rental absorption:

Employment opportunities around the area:

Guduvancheri is surrounded by industrial employment zones such as Maraimalai Nagar, Oragadam, Mahindra City, Perungalathur, MEPZ, Vandalur etc. where various automobile and IT industries have set up shop. For a person residing within the core of the city, traveling to work in areas such as Maraimalai Nagar or Mahindra City where industry giants such as Ford, Mahindra, Tech Mahindra, etc are located is a nightmare. It’s no wonder that professionals employed in companies in such areas prefer renting out a flat nearby and apartments in Guduvancheri.

Educational Institutions around the area:

Guduvancheri also falls in the proximity of various universities and colleges such as SRM University, B.S.Abdur Rahman University and Vellore Institute of Technology. Put together the universities have an overwhelming intake of students visiting from other states and countries. As a result of this, apartments in Guduvancheri enjoy good rental demand from students too.

But is it possible to guarantee rental income and price appreciation?

As per local real estate brokers, an investor can rest assured about rental income from an apartment in Guduvancheri. They agree that there is a continuous inflow of visiting population who are continuously on the lookout for a place to stay near their office or college. But on the other side, tenants are generally temporary with stay limited to their period of business in the area. Price appreciation hasn’t been much and isn’t expected to peak in the near future. But the fact is there has never been a decline either. An Investment made in an apartment in Guduvancheri with an understanding of what drives property absorption in the area can have guaranteed rental income.

Ramyaanbu

Written by

Ramyaanbu

I, Ramya write for Real Estate , Lifestyle, Home and Garden , Finance…. is currently working for Indiaproperty.com, one of India’s leading Real Estate portal.