Best suburban options for you.

Investing in property within city limits could prove to be prohibitively expensive. Here are some suburbs where real estate is still affordable and the rental returns are promising

WHEN life hands you a lemon, make lemonade. Real estate developers, who are still recovering from the after- shocks of the recession, have taken this adage to heart. Faced with tightened purse- strings and hibernating buyers, they realised the importance of ' affordable' housing, a price bracket that has long been ignored. This shift in focus has resulted in the ticket price of new projects coming down by close to half of what they were at the peak of the real estate boom.

However, developers haven't given up on the luxury segment yet. Far from it. In most cities, including the smaller ones, it is the location that is dictating the kind of project that's being built. While projects coming up within city limits, in most cases, are still being sold as luxury, the suburbs are being targeted mainly for affordable housing projects. And this is where the opportunity for investors lies.

If you choose a location after doing a little bit of homework, you can not only get a good deal but also a property that will appreciate and yield better returns than some of the projects within city limits.

The key to selecting a location, however, still remains the same: look for a suburb that has future employment potential or is at least well- connected to the city's main business district. Locations with a solid social infrastructure, like schools, banks, hospitals, etc, are better still. This promises not only better price appreciation in the long term but also steady rental returns as more and more people look for accommodation close to their workplaces.

In fact, some of the suburbs that saw prices rising too fast during the boom, for instance Whitefield in Bangalore, are offering some of the best deals as developers try to clear their unsold inventory at a discount. Here we list some of the best suburban bets across India. Keep in mind, however, that your investment horizon still needs to be long term.

Delhi NCR 

Invest in: Noida ( Sectors 93 A & B, Sectors 119, 137, 151);Faridabad ( Sectors 70- 88)

What works for them

Faridabad has seen some of the most affordable project launches recently.

However, apart from price, what makes them a good investment is the fact that these are not as far from Delhi as those in suburbs like Gurgaon and Greater Noida ( in the same price range). Similarly, what works for Noida, despite cheaper options like Ghaziabad and Greater Noida, is its infrastructure, connectivity and proximity to Delhi. While Greater Noida also has good infrastructure, the distance from Delhi has resulted in very low occupancy and, therefore, the time frame for appreciation in property price or rental returns is higher.

Property rates Noida: Rs 2,000- 2,800 per sq ft Faridabad: Rs 1,800- 2,300 per sq ft Monthly rental income Noida: Rs 5,000- 8,000 Faridabad: Rs 3,000- 5,000 ( 1,000 sq ft/ 2- BHK) Other options Gurgaon ( Sushant Lok, Sohna Rd); Ghaziabad ( Indirapuram, Vaishali); Greater Noida, Kundli

Ahmedabad

Invest in: Bopal

What works for them

After the correction in property prices, developers in the city have fallen back on the triedand- tested strategy of ' soft launches'. This has resulted in good deals for long- term investors. A significant number of these launches were in the eastern part of the city, especially at Bopal. The cost advantage of this suburb is proving to be its biggest strength. The growth of social infrastructure facilities such as banks, schools, markets and hospitals have worked as a catalyst to the growth of this neighbourhood.

What works for them Ahmedabad Invest in: Bopal Property rates Rs 1,800-- 2,200 per sq ft Monthly rental income Rs 2,500-- 3,500 ( 1000 sq ft/ 2- BHK) Other options Ambali, Shilaj, Paldi Memnagar, Vastrapur and Vasna ( Rs 1,700- 2,300 per sq ft)

Hyderabad

Invest in: Uppal, Nacharam, Begumpet

What works for them

Uppal and Nacharam score in terms of investment potential because of the low rates and appreciation potential. This is because of the large number of IT companies and upcoming SEZs in the vicinity. Begumpet is one of the few central locations where prices are still affordable. With the city limits expanding rapidly ( after the creation of Greater Hyderabad Municipal Corporation) and infrastructure developments like Outer Ring Road and the proposed mass rapid transit system, these locations have scope for future price appreciation. The presence of IT companies makes them a good area for rental returns too.

Property rates Rs 2,200- 2,700 per sq ft Monthly rental income Rs 3,000- 4,500 ( 1,000 sq ft/ 2- BHK) Other options Kukatpally, Miyapur and Madhapur, Dilshuknagar and LB Nagar ( Rs 2,000- 2,800 per sq ft)

Chennai

Invest in: Velachery, Rajiv Gandhi Salai, Tambaram Property rates Rs 2,200- 3,400 per sq ft Monthly rental income Rs 4,000- 5,000 ( 1,000 sq ft/ 2- BHK)

Bengaluru

Invest in: Whitefield, Bannerghatta Road, Hebbal

What works for them

A typical home buyer in the city is a salaried professional working in the services sector ( such a clear- cut buyer profile does not exist for most other real estate markets). This means looking for locations with good connectivity, strong development potential and relatively low cost. Given the increase in prices in the past, affordability is a very important factor. Most such projects are being developed in the southern and eastern parts of the city like Hebbal and Whitefield. The development of the NICE corridor towards Mysore, the Peripheral Ring Road and the elevated highway at Electronic City are expected to give a major boost to connectivity.

Property rates Rs 2,100- 2,600 per sq ft Monthly rental income Rs 5,000- 7,000 ( 1,000 sq ft/ 2- BHK) Other options Banswadi, BTM, Old Airport Road, Old Madras Road, Jayanagar, J. P. Nagar ( Rs 2,000- 2,500 per sq ft)

Pune

Invest in: Kharadi, Viman Nagar, Wakad, Kondhawa

Pune had seen one of the steepest price rises in property during the boom, so the rates in some locations have corrected sharply. This, coupled with the focus on affordable housing, makes the Pune realty market attractive. Eastern locations in the city like Kharadi and Kondhawa are preferred housing destinations primarily due to their proximity to established commercial hubs and developed residential locations. Viman Nagar is also an affordable destination due to its closeness to the airport.

Towards the west, Wakad and Hinjewadi are generating interest due to the development of IT/ ITeS in these areas and their easy access to the Mumbai- Pune Expressway.

Property rates Rs 2,100- 3,300 per sq ft Monthly rental income Rs 4,500- 6,500 ( 1,000 sq ft/ 2- BHK) Other options Aundh, Kothrud, Magarpatta, Pashan, Bavdhan ( Rs 2,500- 3,200 per sq ft)

Kolkata

Invest in: EM Bypass, Rajarhat

What works for them

The congestion in residential locations in and around the main city is pushing buyers towards the suburbs. Proximity to the airport and good road network make Rajarhat and Jessore Road popular. Similarly, areas along the EM Bypass have a good potential for rental returns because of proximity to work and educational institutes. However, prices will appreciate gradually because of the availability of land in these places and the steady launch of projects. The planned area for development within Rajarhat is 35.52 sq km.

Property rates Rs 1,800-- 2,400 per sq ft Monthly rental income Rs 4,000- 5,000 ( 1000 sq ft/ 2- BHK) Other options Garia, Behala, Salt Lake, Santoshpur, Tollygunge ( Rs 2,000- 2,500 per sq ft)

Mumbai

Photograph: Ankush Maria

Residential demand has gradually shifted from south Mumbai to the north because of fresh realty supply and comparatively lower prices. Developments like widening of the Mumbai- Pune highway, expansion of the IT/ BPO sectors towards Navi Mumbai and creation of townships in places like Thane, Vasai and Virar have fuelled development along this corridor. The new airport coming up in the area has also hiked the potential for price appreciation.

What works for them Invest in: Navi Mumbai ( Vashi, Nerul, Airoli, Kharghar)

Property rates Noida: Rs 2,000- 2,800 per sq ft Faridabad: Rs 1,800- Monthly rental income Rs 6,000- 7,500 ( 750 sq ft/ 2- BHK) Other options Western, extended suburbs ( Mira Rd, Vasai) and central suburbs ( Rs 2,500- 3,500 per sq ft)

Chennai

Invest in: Velachery, Rajiv Gandhi Salai, Tambaram

Property rates Rs 2,200-3,400 per sq ft Monthly rental income Rs 4,000-5,000 (1,000 sq ft/2-BHK)

What works for them

Residential property rates in Chennai have witnessed a more stable growth because the demand was primarily from end- users.

Locations like Rajiv Gandhi Salai and Velachery are being preferred by the middle- income segment because of better infrastructure and good connectivity to the city. Hence, future rental returns from these locations will be good. The development of Rajiv Gandhi Salai as the IT corridor, Sriperumbudur as the electronic corridor, and the proposed Outer Ring Road to connect the west and the south, bodes well for an appreciation in property prices.

Other options Chitlapakkam, Mogappair, Guindy, Vadapalani, Adyar ( Rs 2,000- 3,600 per sq ft)

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