Rental Yield Reality Check: India vs. Dubai Real Estate | Social Media User Shares Analysis; Tweet Goes Viral – Times Now

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Real Estate Reality Check

Real Estate Reality Check (Image Source: iStockphoto)

In a recent post, a social media user Akshat Shrivastava delved into the stark differences between rental yields in Indian properties and those in Dubai’s real estate market. His comparative analysis shed light on the financial implications of property investment in the two regions.

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He highlighted that in countries like Dubai, where home loans are available at a significantly lower interest rate of 4-5 per cent, investors purchase properties and lease them out, reaping annual rental yields averaging between 5-6 per cent. Notably, what adds to the allure is the absence of taxes on this rental income, amplifying the profitability of investments in Dubai’s real estate sector.

Conversely, in India, borrowing rates stand notably higher at around 9 per cent, resulting in a substantial contrast in rental yields. Despite borrowing at a higher cost, property investors in India typically garner rental yields ranging from a mere 2-3 per cent. Moreover, unlike in Dubai, Indian investors are subject to taxation on their rental income, further diminishing the net returns on their investments.

Shrivastava wrote on X, “In many countries (eg. Dubai) homes loans are available at 4-5% interest rates. People buy such houses, put it on a rent. And, get yearly yield of around 5-6%. And, they pay 0 taxes on that income. So in real terms, they make money. In India, people borrow at 9%. Get a rental yield of 2-3% And, even on that pay taxes. This is also when you actually get possession of your flat that you have booked with a big builder. PS: Not a push that you buy Dubai RE (a lot of things are off there). And, again not a push that you don’t buy RE in India. Takeaway is: don’t buy RE in India which is 2-3% yield generating.”

Shrivastava’s insights underscored the financial disparities between investing in Indian properties versus Dubai’s real estate market. He emphasized that even upon securing possession of properties from reputed developers in India, the discrepancy in rental yields remains glaring.

However, Shrivastava clarified that his intention isn’t to advocate for or against real estate investments in either India or Dubai. Instead, he urged investors to critically evaluate the potential returns on their investments. The key takeaway from his analysis is to exercise caution when considering real estate investments in India, especially when confronted with relatively low rental yields.

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of TN Network.)

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