Guide for Davanagere Residential Real Estate Investment

Davanagere is the seventh-largest city in Karnataka. Being the cotton hub of this state, it is also known as the ‘Manchester of Karnataka and is selected among the hundred cities that are to be developed as smart cities under the central government’s mission. 

Moreover, it is on the list of the first 20 cities that have been developed under the mission of the Ministry of Urban Development. Keep reading to understand how investing in Davanagere’s residential real estate sector might be a profitable venture.

Top Reasons to Invest in Davanagere Real Estate

Here are some of the reasons as to why you would want to invest in residential real estate in Davanagere:

• Transportation

This city is well-connected via road to Pune, Goa, Bangalore, Chennai and many other important locations through NH 48. The Karnataka State Road Transport Corporation buses connect Davanagere to other important cities as well. Other than that, private bus services are also widely available. 

Auto-rickshaws are like the backbone of Davanagere’s public transportation system. Moreover, this city also has a very conveniently located railway station situated right at its centre. Regular train services are available that facilitate easy commutes to important cities around Davanagere. For international travel, the Mangalore airport is situated nearby and for domestic travelling, people can avail the Hubbali Airport. 

• Education

The present scenario of education is very bright in Davanagere. There are adequate numbers of primary as well as high schools present and other than that, every Taluk Headquarters has a degree college. Four engineering colleges, Polytechnic College and two medical Colleges are also present for technical and higher education requirements of this city’s residents. 

Residential Real Estate Investment Opportunities in Davanagere 

Below is a list of some localities that might be apt for investing in Davanagere’s residential real estate sector:

• Shamanur

Shamanur is one of the prime residential areas in Davanagere. It is situated near the highway and is a prime location in terms of connectivity. Additionally, schools, colleges, hospitals, grocery shops, malls, theatres, a variety of restaurants and parks are all present within walking distance. 

Public transport in this area is also readily available and in terms of safety, this area has ample security measures. Rate of residential property in this locality is around ₹2,800 per square foot to ₹9,666 per square foot.

• MCC B Block

The MCC B Block is also an excellent choice for purchasing residential property as schools and hospitals are available within a 5 km radius. The roads are well maintained and public transport is also easily available. Moreover, there are frequent police patrolling in this area, making it a safe place to live in. 

Apart from these aspects, there are a number of degree and postgraduate colleges located within the vicinity. Shopping malls are present within walking distance and there are hardly any power cuts. Rate of residential property in this locality ranges around ₹5,152 per square foot.

Things to Consider Before Buying a Residential Property in Davanagere

Mentioned below are some of the points that you might want to keep in mind if you wish to invest in residential real estate in Davangere:

• RERA Compliance

You need to check whether the property that you are purchasing is complying with the rules set by RERA. The Real Estate Regulatory Authority is a body that takes care of the accountability and transparency of the real estate sector in India. This body came into action after the enactment of Real Estate Regulatory Authority Act of 2016. You can check whether the property you are about to purchase has complied with this body’s rules by visiting the RERA Karnataka website.

• Construction Quality

It is important to inspect the quality of construction by analysing the strength of the walls, colour used, type of flooring used, standard of bathroom fitting, and quality of window frames. This will ensure safety of the people who are about to reside here. As a residential real estate investor, you should always check the construction quality instead of getting lured by a decked-up sample flat. 

You can visit the construction site and analyse the quality of materials used in case you are purchasing an underdeveloped property. Other than that, you can take a tour of other properties built by the same builder to analyse the quality of construction.

Stamp Duty in Davanagere

Stamp duty is an integral part of property transactions in Karnataka. Whenever you purchase a property in Karnataka, depositing the applicable stamp duty amount is mandatory. The applicable stamp duty rates are as follows:

Registration Charges in Davanagere 

The Department of Stamps and Registration controls registration charges in Karnataka. These fees ensure that the property transaction is duly registered in government records. Rate of registration charges applicable in Karnataka are as follows:

Davanagere Residential Real Estate Sector: What’s the Forecast?

There is constant development taking place in and around Davanagere that is increasing its significance as a residential real estate investment hotspot. A Digital India Startup Hub has been inaugurated at the Software Technology Park of India (STPI) centre of this city by the Minister of State for Electronics and Information Technology and Skill Development & Entrepreneurship, Rajiv Chandrasekhar in November of 2022. It is built on 10,000 square foot land in the Karnataka State Open University.

This will act as a great opportunity for entrepreneurship as well as generate job opportunities for a large number of people. Thus, many people can relocate to this city in order to reap these benefits thereby increasing the demand for residential real estate.   

Residential Real Estate vs Other Asset Classes

Let us take a look at the comparison between residential real estate versus other asset classes as the returns they generate:

Residential Real Estate vs Bonds

Bonds are comparatively safer and more stable assets in comparison to residential real estate. However, the latter generates better returns. In terms of tax benefits as well, residential real estate is a better option when you compare it with bonds. The reason being, buying a property with a home loan can help you avail tax savings. 

Do you wish to invest in an asset that offers risk-free returns around 9 to 11%? If your answer is yes, then register on our homepage today and start investing in the wide variety of bonds we have available, without any additional charges.

Residential Real Estate vs Stocks & Mutual Funds

Stocks and mutual funds are more risk-prone and volatile than real estate investments. However, in terms of returns, these financial assets have an upper hand over the latter. Moreover, also in terms of tax benefits, stocks and mutual funds are better than real estate.

Residential Real Estate vs Gold

Gold is a more volatile and risky investment as its value fluctuates based on market conditions. But, this is hardly the case for real estate investments. The latter can provide you with monthly rental income which is practically not possible in case of the former. 

Additionally, while gold is suitable for both long term as well as short-term investments, real estate is only apt for the long term. Apart from this, real estate requires a huge amount of investment, whereas gold requires a smaller one.

Residential Real Estate vs Commercial Real Estate

Residential real estate requires a lower amount of investment in comparison to commercial properties. Moreover, it is easier to find tenants for the former in comparison to the latter. But, there are higher risks of tenants leaving in case of residential real estate as the lease period is shorter in comparison to their commercial counterparts. 

However, in terms of returns commercial real estate performs better than residential real estate.

Here is the tabular representation of comparison between different asset classes as per their returns, liquidity, risk, volatility and ticket size:

Steps to Invest in Residential Real Estate in Davanagere

Here are the steps that you can follow if you are interested to invest in Davangere’s residential real estate sector:

Step 1: As per your financial condition set up a budget.

Step 2: Make a list of all the localities in which you might want to invest. 

Step 3: Hire a broker and with their help visit every location to confirm their authenticity. 

Step 4: Select a site that best aligns with your investment objective and check whether it is RERA approved.  

Step 5: Make all arrangements to pay for the property.

Step 6: Contact a lawyer to prepare all the necessary documents. 

Step 7: Complete payment of stamp duty and registration charges.

Step 8: Pay for the services opted from the broker and lawyer.

Step 9: In order to safeguard your property from any type of damage opt for an insurance policy.

Final Word

Famous for its textile industries, Davanagere is slowly but steadily moving towards transforming into a residential hotspot. With increasing employment and entrepreneurship opportunities, it is going to attract people from all parts of the state as well the country. Therefore investing in residential real estate in Davanagere might be worth your money.

Frequently Asked Questions

1. What action should be taken against a builder who is delaying possession?

Ans. If a builder is delaying possession you should first issue a letter to that individual mentioning about the grievances. In order to avoid such hassles, you need to take all his/her assurances regarding the possession date in writing on a letterhead containing the builder’s seal. This will act as proof by which you can approach CREDAI for mediation.

2. What is a lease deed?

Ans. According to Section 105 of the Transfer of Property Act, a lease is a transfer of rights of property for a particular time period in exchange for an amount of money from a lessor to a lessee.

3. What are the minimum provisions that should be included in a lease?

Ans. A lease agreement should include the amount of rent that is to be paid as well as when it is supposed to be paid. It should also include a notice period for termination of a lease, exact amount of security deposit and penalties deductible in case of damage to the property.

4. What is a mutation entry?Ans. Mutation entries are done in revenue records that indicate a transfer of a property’s title. These are important records that are maintained by the Department of Revenue. These entries are evident in khasra khataunis that are available with local patwaris.