Should you buy a property on EMI for rental income? Check what experts say

“Taking up an EMI is a long-term commitment that must be planned for. Thoroughly investigate the local real estate market. Examine historical patterns, current demand and supply dynamics, and rental yields in the neighbourhood where you intend to purchase the property. It is critical to select a location with the potential for rental revenue development,” said Jetaish Gupta, Co-Founder & Director, Adore Group.

Before deciding buyers should determine the property’s rental yield, which refers to the yearly rental revenue expressed as a proportion of the asking price of the real estate. “Higher rental yields are often more appealing to investors. Strive for a rental return that covers your EMI, as well as maintenance and other expenses while still allowing for profit,” said Gunjan Goel, director, of Goel Ganga Developments

It’s a good idea to save some money aside in the event of vacancy or maintenance expenditures, he added.

Mrinaal Mittal, Director, Blackteak Realty said that the financial constancy of the investor plays a fundamental part, as the EMIs need to be paid for a said duration along with property maintenance and other miscellaneous costs. “The investor needs to comprehend the tax ramifications of such an investment and assimilate how rental income in India affects taxes. Although certain expenses, such as mortgage interest, real estate taxes, and maintenance charges, can offset some rental income taxes, they cannot be fully offset,” said Mrinaal Mittal.

Disclaimer: The views and recommendations made above are those of individual analysts, and not of Mint. We advise investors to check with certified experts before making any investment decisions.

Updated: 16 Sep 2023, 09:32 AM IST