Realty Treat on Hills: Homes Offer Resale & Rental Returns

Published: February 1, 2010

Picture a perfect holiday setting, serenity all around you, leisurely living and slipping into a stress-free zone. Won’t you then just love owning a holiday home which takes you to another world altogether? Owning a home in the hills or in a location nearby which is calm and serene can be the perfect retreat. Moreover, the meaning of a holiday home concept has today extended further to include value propositions for buyers.

Says Raminder Grover, CEO-Homebay Residential, Jones Lang LaSalle Meghraj (JLLM), “A holiday home is now seen as an acceptable investment route for a lot of people, since such homes tend to be in locations that have high aspirational value and therefore commensurate resale value. Apart from this, owning a farmhouse, home in the hills or a beach cottage is certainly a matter of great personal pride and prestige.”

According to JLLM, locations such as Goa, Pune, Alibagh, Khandala, Lonavala and hill stations such as Dehradun, Mussoorie, Ooty and Shimla are in high demand among holiday home buyers. In fact, some real estate developers today are building resort apartments and offering unique value propositions to buyers by way of an assured return. This is how it works, a buyer can use the property for a period while for the rest of the year, the resort will let out the rooms to visitors.

The advantage is that the owner of the apartment or cottage gets a part of the rent as income at the end of the month. Also, the property is maintained without any extra cost on the part of the owner. “Owners at Wooded Glen Estates property in Sattal, near Nanital, have an option to give out their rooms on rent. It works as an attractive incentive for many prospective buyers,” says Atul Marwah, principal consultant, Prime Options, a real estate advisory company which is marketing apartments, cottages and villas at Wooded Glen Estates. The Sattal property is located in the wilderness, on the slopes of a mountain and also has a view of the hill towns splendid lakes. This destination is also a paradise for bird watchers and adventure sports enthusiasts.

Sattal is also fast gaining prominence among second home buyers. The CEO of a services company based in Gurgaon has bought a 2 bedroom apartment in Sattal with a group of friends. “We wanted to have a holiday home in the hills, close to Delhi and Sattal fits the bill. The idea was to own an accessible place so that we could take more frequent holidays. Moreover, a hotel doesn’t give the same sense of belonging as a home does,” he says.

Besides Sattal, other properties in different locations have also been promising good returns for buyers. Uttaranchal-based Leisure Hotels have also been promoting a similar concept at Riverview Retreat in Corbett Park for the last 10 years. Here, they have sold 15 cottages with 2, 3 and 4 bedroom configuration and are currently constructing 10 more cottages and apartments.

“The owners get an average 4-5% in terms of rental yield from their properties apart from the benefit of using it when they want,” says Vibhas Prasad, director, Leisure Hotels. The group is also building 12 five-bedroom cottages at Nainital and a new project in Bhimtal is also in the works. “About seven of these 5-bedroom cottages have been sold for Rs 2.5 crore each and there is demand for more,” he says. The Prasad family themselves have purchased a holiday home in Goa for personal use.

Such prospects of a return on investment is another reason why buying a leisure haven is seeming very attractive to buyers now. Paroma Roy Chowdhury, who visits her getaway home in Goa every four months, says her family is open to renting it out in the future. “We are not renting out the place right now. But later we may consider it and then accordingly invest further in infrastructure for the purpose.”

Goa, in fact, is a popular choice with many holiday home seekers. DLF, which also has a project in Goa, claims to have sold about 200 of the 240 units over the last month and a half. “They start at Rs 25 lakh and go up to Rs 65 lakh. We have got a fantastic response for this project, including booking from local Goans. It’s a great ego boost to own a property in the hills or in popular locations such as Goa and Kerala,” says Rajeev Talwar, group executive director, DLF.

Besides a lucrative return on investment, a holiday home is largely seen as an escape from one’s stressful lifestyle. “People want getaway homes to get a break from their hectic schedules, the pollution and traffic of the cities,” adds Atul Marwah.

However, be sure to keep certain things in mind before investing in a holiday home, irrespective of the location choice. “There should be good investment prospects in terms of rental income and capital value growth. The quality of local infrastructure and assurance of security needs to be assessed carefully. Recreational facilities should be available and within easy reach. Needless to say, accessibility, particularly from the airport, is a key factor,” adds Grover of JLLM.

Source: Economic Times

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