Is Buying Land in a Tourism Place a Smart Real Estate Investment?

The Indian travel and tourism sector made a significant contribution of $199.6 billion to the country’s GDP in 2022. These figures are projected to grow even further with the steady increase in domestic and foreign tourists in our country.

But what do these numbers mean for people wanting to make a wise real estate investment? What will acquiring land in the serene coastal areas or dreamy hill stations yield?

Let’s try to find the answer to these questions below.

Benefits of Buying Land in a Tourist Place

The trend of exploring land investments in tourist hotspots started with the pandemic. At that time, urban dwellers just wanted to have a second haven nestled in serene locales. However, this need has evolved significantly in the past five years and turned into a profit-seeking venture.

1. High Rental Yields: The rental yield of accommodation in a well-known tourist place surpasses its urban counterpart. For instance, resort homes in emerging tourist places yield 6-8% annually. A number much higher than a residential place in any urban area.
2. Capital Appreciation: Famous tourist places like Rishikesh see 12-15% property price appreciation annually. Therefore, ultra-wealthy or high-net-worth individuals rush to invest in these lucrative opportunities.
3. Improved Connectivity: Many expressways and air travel options have opened in recent years. This made remote destinations more accessible for tourists and investors alike. This has consequently led to an increase in profits.
4. Investment Portfolio Diversification: Purchasing land in a top tourist destination diversifies your investment portfolio. Both NRIs and domestic investors are making real estate investments in India to gain profitable yet stable long-term returns.

Summarising the above points, Indians are driven by three major motivations to make such an investment decision: lifestyle aspirations, infrastructure developments, and financial returns.

Current Trend of Acquiring Land in Top Tourism Places

Real estate investment and prices are constantly rising in the prime tourist destinations of India. Three robust factors are pushing this profitable trend further.

• Infrastructural developments
• Government initiatives
• Tourist influx

Want to understand the current real estate scenario in these destinations better? Find the investment highlights of the top Indian tourist destinations below.

Conclusion

All indicators - from pricing trends to government-backed initiatives - suggest that making land investments in tourist destinations is a profitable venture. However, note that buying land in a tourist place is very different from buying it anywhere else.

In any tourist destination, it is highly advisable to conduct thorough due diligence on the following points:

• Zoning & land use classification
• Government approvals
• Local laws & buyer restrictions
• Infrastructure & access
• Environmental & heritage restrictions
• Legal & ownership checks
• Financial verification
• On-ground verification

Even better, consult a real estate expert before investing a heavy amount in such properties.

Remember, land in a tourism place can be a goldmine, but only if you approach it with eyes wide open and the right guidance.