Guide to Property Investment in Chennai

Chennai is a prime destination in South India, renowned for its excellent infrastructure, rich cultural heritage, esteemed educational institutions, distinctive architecture, and vibrant tourist attractions such as Mahabalipuram Temple.

This guide is designed for those considering real estate investment in Chennai. It covers consideration factors, essential steps, and prime locations.

What is Property Investment in Chennai?

Chennai's residential market has grown significantly in prime locations such as Manapakkam, Madhavaram, Ramapuram, and Siruseri, as well as metro line construction areas. Tidel Park and the city's other technology firms make it a popular destination for IT professionals. Real estate investment in Chennai can be profitable due to increased rental demand and returns, but historical price trends must be considered.

Factors to Consider Before Investing in Chennai Real Estate

Economic Growth

Chennai's economy is diverse and robust, with sectors such as information technology, manufacturing, logistics, and healthcare. Rising demand for residential space is driving rapid development. This growth has created a favourable environment for real estate investments, ensuring a steady demand for the city's residential and commercial properties.

Infrastructure

Infrastructure development, such as highways, bridges, and flyovers, significantly contributes to a country's prosperity by boosting industry growth, creating jobs, and establishing new commercial and residential districts. Completing significant projects such as Metro Rail and the elevated OMR Corridor will lead to consistent growth in the Chennai real estate market.

The proposed routes will connect eight state and four national highways, a bus station in Kilambakkam, and the Bangalore-Chennai Motorway, improving Chennai's infrastructure with rising real estate prices and new residential developments.

Affordability

Chennai has relatively low property prices when compared to other Indian metropolitan cities. This cost-effectiveness, combined with the city's potential for growth, allows investors to enter the market at a reasonable cost while expecting long-term appreciation.

Rental Yield

Rental income is a significant source of income. Increased demand in Chennai real estate leads to higher rental returns, potentially resulting in long-term financial stability and gains for those purchasing homes for sale.

Potential for Growth

Before investing, consider the potential for future growth in land prices and demand. Factors such as proposed infrastructure projects, commercial developments, and employment opportunities can all contribute to price appreciation.

Demand of the Location

The location of the property significantly impacts its resale value and lifestyle. Chennai's highly developed areas, progressive neighbourhoods, and excellent amenities make it a desirable investment destination. As land prices rise, purchasing a plot now could result in substantial profits in the future.

RERA

The Real Estate Regulatory Authority (RERA) is a regulatory body that manages real estate projects and developers across the country. It protects homebuyer interests, promotes rights, increases transparency, and creates a favourable environment for real estate investment.

Developers and agents must pay TN RERA registration fees for real estate projects. The fees are Rs. 6 per square metre for layouts, sub-divisions, and site approvals (excluding EWS plots) and Rs. 25,500 for individual registration, depending on the state.

Builder

To find reputable developers in Chennai, conduct thorough background checks, evaluate their qualifications, experience, and track record and review their portfolio of previous projects. Interact with previous clients or read testimonials to learn more about their work style and ability to meet deadlines. A reputable developer should keep up with industry trends and have a strong technological foundation.

Steps to Invest in a Property in Chennai

Investing property in Chennai involves several important steps outlined below to assist you in making informed decisions.

Step 1: Conduct a market survey and finalise your investment budget

Before looking for a property, conduct extensive research, including a market survey, and determine your investment budget. Ensure the security of your investment, verify the amenities, construction company's track record, materials, and property location.

Step 2: Shortlist a few properties based on your requirements

When shortlisting properties, consider specifications, size, layout, amenities, condition, future potential, legal documentation, neighbourhood and community, and resale value.

Step 3: Plan a field visit to the properties to assess their various aspects

Buyers are required to visit properties, particularly those who intend to use the space for personal purposes.

Assessing the infrastructure, transportation facilities, and hospital proximity is critical, as the nature of the business significantly impacts the expected amenities.

Step 4: After finalising a property, do a background check and review documents

Ensure a thorough property background check and review all property documents after finalising a property purchase to avoid scams and legal battles. Legal experts are essential for authenticating property documents to prevent disputes or controversy, and low-priced properties may reveal hidden issues or litigation problems.

Step 5: Prepare the necessary documents for the property purchase

Some legal documents required to purchase a property in Chennai are listed below:

• Title Deed
• Patta/Chitta/Adangal
• Encumbrance Certificate (EC)
• Power Of Attorney
• Layout Approval
• Building Planning Permit
• Building License
• Property Tax, Water Tax, And Electricity Bill
• Construction Agreement
• Sale Agreement
• Occupancy Certificate

Step 6: Pay for the property, including stamp duty and registration charges

When buying a home, you must pay stamp duty and registration fees. Tamil Nadu has one of the highest stamp duty and registration charges among Indian states, at 7% and 9%, respectively. For example, a property worth Rs. 1 Crore would require a stamp duty rate of Rs. 7.1 Lakh and registration fees of Rs. 9.1 Lakh.

Benefits of Investing in Chennai Real Estate Property

Growing City

Chennai's rapid growth has attracted diverse businesses and industries. The Market of India initiative exemplifies this, with a proposed big-box wholesale and retail marketplace to transform the city's business landscape. These projects are expected to regenerate Chennai's urban landscape while increasing the likelihood of long-term profit.

IT and Industrial Hub

Chennai, known as the "Detroit of India," is a thriving automotive and IT hub, resulting in high demand for residential and commercial properties. Chennai's real estate market has evolved due to its reputation as an IT powerhouse, with several technological hubs and parks attracting young workers. The Sriperumbudur Aerospace and Defence Park has benefited the industrial ecosystem by serving as a manufacturing hub for aerospace and defence services.

Educational Institutions

Chennai's prestigious educational institutions, such as Anna University, IIT Madras, SRM Institute of Science and Technology, and SRI Ramachandra Medical College, attract students from all over the world, resulting in a demand for student housing and rental properties in the surrounding areas, providing appealing investment opportunities for real estate investors.

Coastal Location

Chennai's east coastal areas, such as Thiruvanmiyur, Neelankarai, Injambakkam, Panaiyur, and Kovalam, have beautiful beaches and a pleasant coastal climate, making them an appealing tourist and residential destination. Properties near prime coastal areas have a high potential for value appreciation.

Cultural Heritage

Chennai, known for its cultural heritage, combines traditional and modern lifestyles, making it appealing. The city's vibrant arts scene and historical significance make it a desirable real estate destination. Tradition-rich neighbourhoods such as Mylapore provide investment opportunities in heritage homes, while the growing tourism industry provides short-term rental opportunities for homeowners.

Top Locations for Real Estate Property Investment in Chennai

Korattur

Korattur, part of the Ambattur Industrial Zone, is a popular area for home buyers in Chennai. Its low property values make it desirable. Average property prices start at Rs. 7,000 per square foot, and the average monthly rent is Rs. 14,500. Korattur is well-known for its successful projects, including KB Krishna, KVR Sree Padmalayam, and GP Peach Blossom.

Urapakkam

Urapakkam is a popular residential investment destination in Chennai. It offers a variety of housing options, including tall apartment buildings and retail stores. The average property price is Rs. 4,500 per sq ft, and rental prices range from Rs. 8,500 per month.

Choolaimedu

Choolaimedu is a popular residential and commercial area in Chennai. It is well-known for its high property values and monthly rentals. It is close to renowned educational institutions such as Loyola College, Meenakshi Engineering College, and Panimalar Polytechnic.

The average property price in Choolaimedu is Rs. 7,500 per square foot, with monthly rental prices ranging from Rs. 8,500.

Medavakkam

Medavakkam, a popular residential area, provides many affordable options and has seen numerous new developments. Its proximity to major IT hubs such as HCL makes it an attractive option for corporate employees looking for mid-segment housing.

The average property price in Medavakkam is Rs. 6,500 per square foot, with 2 BHK apartments in high-rise developments being preferred. Some affordable options include a 1 BHK starting at approximately Rs. 27.50 Lakh and an average monthly rental of Rs. 12,000.

Medavakkam is known for popular projects such as Pearl Queens Park, Pearl Krishna, Pearl Azalea, VGK Unity Kingdom, Rajparis Lake View, Navins Starwood Towers, and The Nest Icon.

Conclusion

What is property investment in Chennai? Chennai's residential market has grown in prime locations such as Manapakkam, Madhavaram, Ramapuram, and Siruseri, resulting in higher rental demand and returns. Real estate investment in Chennai can be profitable, but it is important to consider historical price trends. Monthly rentals reach Rs. 18,500 and above.

Factors to consider before investing in Chennai real estate

• Economic Growth
• Infrastructure
• Affordability
• Rental Yield
• Potential for Growth
• Demand of the Location
• RERA
• Builder

Steps to invest in a property in Chennai

• Step 1: Conduct a market survey and finalise your investment budget
• Step 2: Shortlist a few properties based on your requirements
• Step 3: Plan a field visit to the properties to assess their various aspects
• Step 4: After finalising a property, do a background check and review documents
• Step 5: Prepare the necessary documents for the property purchase
• Step 6: Pay for the property, including stamp duty and registration charges

Benefits of investing in Chennai real estate property

• Growing City
• IT and Industrial Hub
• Educational Institutions
• Coastal Location
• Cultural Heritage

Top locations for real estate property investment in Chennai

• Korattur
• Urapakkam
• Choolaimedu
• Medavakkam
• Velachery