xpmaulik

I have a small querry.....
IF I invest in commercial/residential property and give it out for rent, can I earn rental income more than the interest rate giving a possitive +ve cashflow.

i.e Suppose I buy a property for let us say Rs. 100
I get 80% Loan and 20% down payment so Rs. 80 and
when i give out my property for rent can I get rent that can pay off my interest and a portion of installment

i.e Rental income more than Re. 12 p.a when interest rate is 12%.....

paul1970

Possible but not impossible.

You need to do enough research and see that rental yield is more than your EMI.

If it is very easy, everyone would be having postive cash flow with no defaults. In India it is bit difficult with the current rental yield(4-6%) but hope the rentals might raise upto 8-10% in short term.

In standard rental terms , it will be very difficult but is possible with creative ideas like short term rentals/subletting/location/proividing additional value with lesser cost etc.

Paul

World IR

when buying property, need to do proper financing planning as th interest on mortage will be a huge one

lsjey

For the rental yield to go up, the home prices have to come down. Once that happens this is possible. So one should be careful not to pay too much in buying a house :-)
lsjey