Indian property is generally fairly low priced – you can snap up a beachfront property for as little as $10,000. With prices this low and a healthy rental market, it is no wonder that Goa has caught the eye of so many investors.

However, there are certain things that must be considered before you take the leap. Consider buying a property with a five-year leaseback – this is a scheme where the property is leased back to the developer ot management company and they handle the rental of the property instead. It is also worth investigating whether you can setup an Indian Limited Company to hold your property as this may prove more beneficial financially than holding the property in your own name.

Goa is the hottest area in India to buy right now with many new developments springing up. As with any property, it is worth investing either along the beachfront or in the tourist areas as these will have the best rental market around meaning your property will hopefully be rented out all-year. Be prepared to spend from $10,00 upwards on your property for a one bedroom apartment in a gated complex.

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Developers on the edges of big cities have found the past couple of months difficult, with prime locations within city centres holding their prices best. An example of this is Khargar, on the edges of Navi Mumbai. The prices here have declined by up to around 20%, however the prime location hotspots of the Palm Beach Road Promenade and the land around the proposed new airport have not seen any declines in prices.

Part of the problem has been the confusion over zoning and FAR (the floor are ratio or FSI) as well as a rising rate of interest for home loans. This has lead to buyers holding back from buying any property, and so prices in non-prime areas have dropped. However, high-end properties in mid-town locations as well as good quality commercial property has not seen any effects due to over-demand and under-supply.

The lack of buyers has hit loan companies and banks the State Bank of India saying that their current growth of about 25% was unsustainable in the current market, and they were settling for growth of 20% instead.

It’s not all bad news for homeowners though – the drastic drop in sales is pushing up the rental market. So if you are looking to invest, housing in city centres is prime for excellent rental yields. And if you are in it for the long run and are happy with something high risk, there is some excellent, cheap land around the outskirts of most major towns which could potentially reap rewards in the future.

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