An investment opportunity

Serviced Apartments: An investment opportunity

Although mainstream hotel companies are major players in the business, several developers are offering these apartments to individual buyers. Some of these are targeted at the ultra rich who want to own accommodations in different locations without worrying about their maintenance.

Several small- to mid-size builders are marketing serviced apartments as an investment opportunity with good returns per annum. At present, investment in residential properties is more for capital appreciation than rental income. Annual yield via rental income from a residential property is generally 3-4% a year while capital appreciation is 10-15%.

Like any property investment, location is important in this case too. Proximity to business centres and good connectivity will lead to higher rental income and capital appreciation. As the quality of service also decides the rental yield, it is important that the facility is managed by a reputed service provider.

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