Guide for Salem Residential Real Estate Investment

Salem is the sixth largest urban agglomeration of Tamil Nadu. This city lies on the banks of the Thirumanimuthar River.

As a metropolitan city, Salem is densely populated like Chennai. This city has a high sex ratio of 987 women per 1000 men, which indicates a high degree of equality in a given region. 

Additionally, Salem hosts several textile, handloom and electronic industries. This city is rich in mineral deposits of bauxite, limestone, granite, quartz and iron ore. In fact, Salem has the 2^nd largest magnesite deposits in India. 

As a result, there are mining and manufacturing companies providing employment opportunities. This draws people from different parts of Tamil Nadu and boosts the local real estate market.

Read along to know the perks of investing in residential real estate in Salem.

Top Reasons to Invest in Salem Residential Real Estate 

Here are some noteworthy reasons for you to invest in residential real estate in Salem:

• Good Employment Opportunities

Salem is one of the major textile hubs of Tamil Nadu. Salem Steel Plant, a unit under the Steel Authority of India (SAIL), is one of the most prominent steel industries here. This city is also famous for silver jewellery and the industries that produce them.

These industries offer employment opportunities and, thus, attract people from all over Tamil Nadu.

• Educational Institutions

Salem is home to several reputable institutions for higher education. The Government College of Engineering, Institute of Handloom Technology (IHT), Sona College of Technology, and Government Law College are a few of the major educational institutions here. 

These places attract students from all over Tamil Nadu. This presents a lucrative opportunity for real estate investors who want to tap into the demand for co-living spaces to earn a substantial income.

Investment Opportunities in Salem Residential Real Estate

Here are some locations in Salem suitable for investing in residential real estate.

• Palbakki

This is a prominent residential area in Salem. Transportation to and from Palbakki is relatively easy by road and railway. Healthcare facilities like Nagaranjan Nursing Home, I tech Multi-facility Hospital, and Amirthalingam Hospitals are a few of the large hospitals in Palbakki.

The average property price in Palbakki is ₹1,677 per square foot.

• Omalur

Omalur is a popular neighbourhood in Salem. This town hosts various hospitals and educational institutions to cater to the residents here. Omalur Junction is the nearest railway station to this town. This station connects commuters to prominent cities in Tamil Nadu and nearby states.

Property prices in Omalur range from ₹6.5 lakh to ₹25 lakh.

Read Also: Guide for Chandigarh Residential Real Estate Investment

Things to Consider before Buying a Residential Property in Salem

Here are some points for you to keep in mind before investing in residential real estate in Salem:

• Safety and Security

Security is the primary concern for every individual looking for a home. Therefore, before finalising a property, consider researching the locality. Well-lit streets, nearby police stations and low crime rates are all indicators of a safe neighbourhood. Also, if you are investing in an apartment complex, ensure that it has to work CCTV cameras and fire extinguishers.

• RERA Authentication

The Real Estate Regularity Authority Act 2016 led to the formation of its statutory body Real Estate Regularity Authority (RERA). This body helps maintain transparency in the real estate business.

Every broker and builder in Salem need to register their properties under the RERA portal of the Tamil Nadu Government. You can verify the authenticity of your shortlisted properties here.

Stamp Duty in Salem

The stamp duty applicable in Salem is given in the table below:

Registration Charges in Salem

Registration charges on the purchase of residential properties in Salem are as follows.

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

The Tamil Nadu Government plans to install 11 industrial parks across, including Salem. This will generate employment opportunities for over 2 lakhs people in the state and all across India. Initiation of such projects in Salem will attract more employees. 

Electronic Corporation of Tamil Nadu is also planning to set up an elaborate IT park in the heart of this city. MNCs like Capgemini, Whirlpool Warehouse, SourceHOV LLC, etc., also have offices in Salem.

These industries and education institutions in Salem will continue to drive more people to migrate here. This will likely open up the scope for investors to earn high ROI from residential real estate. 

Residential Real Estate vs Other Assets Classes

Let’s take a look at the points of difference between residential real estate and other asset classes.

Residential Real Estate vs Bonds

Residential real estates have a higher risk potential than bonds. However, you can earn more returns from residential real estate than investing in bonds. Bonds also carry higher liquidity compared to residential properties. 

Residential Real Estate vs Gold

Buying and selling gold is easier than real estate. As a result, gold has a more liquid market. Also, gold is suitable for both long-term and short-term investments. However, one can earn more from rental income from residential properties over the long term.

Residential Real Estate vs Commercial Real Estate

Finding tenants for residential real estate is comparatively less time-consuming than commercial real estate. Commercial properties are also more expensive than residential ones. However, you can earn more ROI from commercial properties than from residential properties. 

Discover More: Guide for Salem Commercial Real Estate Investment

Residential Real Estate vs Stocks and Mutual Funds

The stock market has a volatile nature; therefore, you should have a high-risk appetite to invest in stocks and equity mutual funds. Furthermore, investors can earn more returns from stocks and mutual funds than residential real estate by investing wisely. In contrast, residential properties offer lower but more stable income. 

The table given below compares the above asset classes based on their liquidity, volatility, risks and ticket price.

You can earn stable returns of up to 9-11% by investing in low-risk bonds. Register now and explore the top-rated bonds trending in the market to invest in.

Steps to Invest in Residential Real Estate in Salem

Step 1: Fix a budget to invest in residential properties.

Step 2: Shortlist a few locations and conduct on-site research to analyse the ground situation.

Step 3: Seek help from real estate consultants to learn about prospects in the area. 

Step 4: Finalise and purchase a location after checking its RERA authenticity.

Step 5: Pay all necessary charges like stamp duty and registration charges to transfer the property under your name. Also, consider paying the service charges to brokers or real estate consultants.

Step 6: Check for official documents like title deeds, property assessment extracts, encumbrance certificate, etc.

Step 7: Finally, cover your newly-obtained property with an insurance plan.

Read More: Guide for Guwahati Residential Real Estate Investment

Final Word

Investing in residential real estate can bring you great returns. However, such investments also carry certain risks like market risks, liquidity risks, liquidity issues, etc. Therefore, you must conduct proper research on the property and make an informed decision when purchasing. 

Frequently Asked Questions