Why should you invest in real estate in Sri Lank

Why should you invest in real estate in Sri Lanka?

It is the high-risk investments that bring the highest returns. Real estate is such a risky investment with the potential for generating massive returns. There are success stories of brave risk-takers who opened their way to financial freedom just from investing in real estate. Real estate investments can take any form out of several types which include residential properties, commercial properties, apartment properties, and land properties.

But is Sri Lanka the right place to invest in real estate? You can be a Sri Lankan or a foreigner from overseas considering a real estate investment in Sri Lanka and this article will give you the answer that you are looking for. 

Content

  1. Reasons to invest in real estate in Sri Lanka
  1. How to make money from real estate in Sri Lanka?
  1. Reasons to invest in real estate in Sri Lanka 
  • Location 

Sri Lanka is renowned as the service and trading hub of the Indian subcontinent. The location itself is attracting many foreign direct investments to the country which causes to increase the value of the real estate in the urban and suburban areas. Sri Lanka is also one of the beloved tourist destinations of the world and commercial properties related to this industry never have been an investment to regret later. 

  • Economy 

Sri Lanka is recognized as the most liberalized economy in South Asia. If you invest in Sri Lanka you are eligible for preferential tax rates, exemptions from exchange control, constitutional guarantees on investment agreements, and full repatriation of profits. 

Sri Lankan economy is made further favorable for investments through policies that offer freedom to the private sector by creating low barriers in trading and investing. All these benefits make Sri Lanka an attractive country for real estate investments by avoiding economic hurdles that might an investor face in other South Asian countries. 

  • Legal Environment 

The country has an advanced legal and regulatory framework that simplifies the process of real estate investment. They also cover intellectual property and settlement of disputes through arbitration in case of a special circumstance. The legal system assures equal treatment for both foreign and local investors under the investment and general law of Sri Lanka.

  • Literacy 

The literacy and education level of Sri Lanka is highly favorable as a potential location for startups. As a result, the demand for commercial properties in urban areas is experiencing an upward trend. 

The country has a boastingly high level of education as well as the highest literacy rate in South Asia which is 92%. On average,  50% of the Sri Lankan students who have finished their tertiary education have majored in technology and business fields. English is popularly spoken across the country and is the most prominent language used in business circles. These factors together simplify the process of real estate investments in Sri Lanka while promising a hike in property values. 

  • Infrastructure 

The infrastructure facilities available in Sri Lanka are ranked as the best in the South Asian region. Many projects are ongoing at the moment to improve the infrastructure of the country in collaboration with government institutions.

 In addition, the government encourages the participation of the private sector in improving the infrastructure of the country on the basis of  BOO (Build, Operate and Own) and BOT (Build, Operate, and Transfer). 

Currently, the private sector institutions are taking part in providing services such as port maintenance, power, water sanitation, transportation, and IT. Further development of infrastructure facilities promises an increase in the real estate investments that you will make today. 

  • Health and Education 

There are private and government-provided health and education facilities in Sri Lanka at the convenience of access. The government schools follow the local curriculum while there are private and international schools offering the British/American curriculum. 

Most of the hospitals are equipped with modern technology for a better experience. These facilities make the properties in Sri Lanka more attractive for foreigners who are willing to move to Sri Lanka with their families or as post-retirement residents.  

  • Availability 

There are many properties available for sale now in Sri Lanka more than ever, especially in urban areas including Colombo. During the last two years of fighting a pandemic, many people faced drops in their fixed income which in turn affected their ability to afford and maintain properties in these areas. 

The situation is the same with the hotels, villas, and other tourism-related industries which were backed by loans. With the urge to get rid of financial burdens and stress, most properties are sold at considerably low rates. But once tourism revives and the economy starts to rise, property prices will definitely escalate again. Therefore, now it is high time to invest in real estate in Sri Lanka. If you are looking for a reliable luxury property to invest in,  Luxely will assist you to find luxury properties in the country that are for sale or rent at the moment. 

  1.  How to make money from real estate in Sri Lanka? 
  • Renting out the  properties

The general objective of renting out a property is to gain a profit from the monthly or annual cash flow that will be received as the rent. You will also be eligible to enjoy the capital gains through the appreciation of the value of that property over time. Once the value of the property is increased, it will be a reason to upgrade your rentals too. 

  • Buy and sell properties 

The simple and basic process of buying and selling properties is that a developer purchases a property at a reasonable price, upgrades its condition to improve its financial value, and will sell it again to a buyer after allowing for a generous profit margin. If you are planning to make a profit from regularly buying and selling luxury real estate in Sri Lanka, you can visit the exclusive web-based ad portal Luxely.lk to reach trustworthy potential sellers and real estate agents quickly and conveniently. 

Wholesale of  properties

There are seasoned real estate investors who are actively participating in businesses like wholesale of properties. In these deals,  they are acting as intermediaries by purchasing a property under a contract and immediately selling it back to another buyer. The initial seller is paid with the money they receive from the final buyer after keeping a profit for themselves.

What to consider before buying a luxury property in Sri Lanka?

Investing in a property is a critical deal. But it becomes more intense if you are investing in a luxury property. In a period that real estate values are escalating, you must know the tips and tricks to buy the right luxury property to match your requirements without spending too much time, energy, or money on the matter. Keep reading to know a few of the expert hacks to follow while hunting for your luxury property in Sri Lanka. 

Content 

  1. Be clear with your requirements
  2. Know your options
  3. Inspections are mandatory
  4. Evaluate the neighborhood
  5. Finalize the total cost of the property
  6. Talk to your lawyer
  7. Inspect the title of the land.
  8. Seal the deal before it is too late

  1. Be clear with your requirements 

What are you looking for in your luxury property? Prepare a list of the requirements, and it will save your time by allowing you to give up on the properties that will not serve your purpose. 

If you have a long list of requirements, separate it into two sections as “ must-have”s and “good to have”s. The ultimate goal is to find a luxury property that ticks all the boxes of the “must-have”s section with a majority of boxes in the “good-to-have”s section. 

  1. Know your options 

The chance of you finding the perfect luxury property you are looking for is high if you check more and more of the properties available for sale. Where can you find the best but most reliable property deals in Sri Lanka? There are traditional channels such as newspapers which are extremely time-consuming with a risk of being outdated. 

Browsing them online is the most convenient method to reach more deals within less time. You can easily browse for your potential property with ‘Luxely” which is Sri Lanka’s first exclusive luxury real estate website. It is a digital platform of daily updated advertisements on luxury properties in Sri Lanka posted by real estate agents and companies. 

Luxely” can save your time by cutting off the time you will have to spend on filtering unwanted results in ordinary property websites. They also have a team to assist you when you need but you can easily get in touch with your property dealer too. 

  1. Inspections are mandatory 

Once you are impressed with a property, discuss with the seller and arrange a personal inspection. Go with an open mind so you will notice everything about the property as they are without bias. Be clear on what you need and stand by your standards.

 A luxury property is a heavy investment, and there is no space for you to make a mistake. Therefore, never think of concluding a property deal before an inspection or considering the opinion of the people who will be associated with the property. 

  1. Evaluate the neighborhood 

Do not forget to evaluate the neighborhood of the property. Get to know about the surroundings and the area before the inspection so you will know what to look for during the inspection. Whether it is a commercial property or a residential property, the neighborhood affects the value and your comfort.  You might have found the best property in the country at the moment but it will not be the right investment if it is in a neighborhood with restricted access to amenities or with a bad reputation. 

  1. Finalize the total cost of the property 

Discuss with the seller and agree on a price. You should research the ongoing prices of the luxury properties in the area so you will know when to bargain and secure a good deal. 

The price of the property is not the only expense in buying a property. There will be additional costs such as legal expenses. It is better to know the total cost before proceeding to the next stage as you will have time to finance the transaction if you need more money than you initially planned. 

  1. Talk to your lawyer 

Once you have found the luxury property that you need to purchase, get in touch with your lawyer or find one who is experienced in property law. Consult your family, friends, and colleagues for recommendations. You can also browse and find a good lawyer online. 

As you are ready to buy your luxury property, you must have a lawyer by your side to complete the last few steps of the acquisition.  Hiring a skilled lawyer will save you from a load of risks that might trouble you in the future. 

  1. Inspect the title of the land. 

A property case running for years in the courts is the last thing you will need in your life. Seek the help of your lawyer to confirm that the deed and other legal documents related to the property are clean and free from flaws. The originality of these documents must be ensured before signing the deal. Again, you cannot afford to go wrong while investing in a luxury property. 

  1. Seal the deal before it is too late 

Your lawyer will prepare the necessary legal documents to transfer the title of the property from the seller to you. Both the seller, buyer, and their legal representatives must be there to sign the contract to finish the deal. 

Make sure all the documents are properly signed with no chances of a legal loophole. You might have to pay the full amount of the property price at this moment. But if you and the seller have agreed to make the payment in any other way, you can complete it accordingly. 

The property transfer is officially completed once the change is recorded at the Land Registry as well as the municipality of the area in which your property is situated. Therefore, after signing off the contracts, you can consider yourself the owner of your new luxury property. 

Why Sri Lanka is the Best Luxury Real Estate Investment Location?

 

Sri Lanka formerly known as “Serendib” was the origin land of the word “Serendipity”. Sri Lanka was said to be a land with immense natural treasures from plantations to gems, pearls. That is the reason why Ptolemy’s famous map of the island was sketched in the year 1535 with much accuracy without any advanced technology. Sri Lanka was a known location for many and was a centerpiece in international trade.

 

So why Sri Lanka is the Best Luxury Real Estate Investment Location in the world. Here are our picks;

 

Climate

Sri Lanka has been ranked as the no 1 destination, among 20 countries, for winter travel by USA Today.  This list included well established destinations like Dubai, Abu Dhabi, Galapagos Islands, etc. Sri Lanka has great weather throughout the year and good for expats who would like to enjoy the best part of their lives.

 

Low Cost of Living

Colombo the commercial capital of Sri Lanka is ranked 358th out of 424 cities in the world by Numbeo, a popular cost of living analysis site. Colombo is 65.13% less costlier than in New York. All other major cities in Sri Lanka are less costlier than Colombo.

 

Openness and Friendliness towards Foreigners

There are many many testaments from foreign travelers about the generosity and hospitality of Sri Lankans towards them. One of the iconic was the 2004 Tsunami aftermath. During post Tsunami recovery many affected travelers didn’t have anything to wear during which Sri Lankans who also had their belongings washed out into sea helped the travelers first.

 

Low Taxes on Properties

With a new President and government, the taxes on properties have been reduced significantly to encourage foreign investments. Gazette notification 2151/52 has removed VAT taxes on apartments from 1st of December 2019 and Gazette 2147/59 has reduced VAT rate from 15% to 6%. These along with other benefits for foreign investors is an enticing prospect.

 

Rising demand for urban vertical living in Colombo

Colombo’s urban vertical living demand is skyrocketing with the increase of expats coming in as part of development projects being carried out in the country and living, working in the commercial capital. This fueled by the development and maintenance of infrastructure is helping demand to rise even more.

In conclusion the next decade in Sri Lanka for Luxury Real Estate looks very promising and surely an investment asset class which no ones wants to miss out.

 

Luxely.lk‘s mission is to promote and encourage the selling and renting of these increasing number of Luxury houses and apartments predominantly in the western province. We are achieving this by building a platform where potential buyers, tenants can meet with Luxury real estate agents who have offerings. Subscribe the Luxely.lk‘s email list, Facebook, Instagram, LinkedIn pages for updates.

Luxely is open for Real Estate Agents in Sri Lanka

Luxely is Sri Lanka’s First Exclusive Luxury Real Estate Platform. Luxely is focused on fulfilling the Luxury accommodation needs of Sri Lanka starting off from Western Province, Sri Lanka and eventually expanding throughout Sri Lanka.

 

Currently Luxury Real Estate agents have to rely on Generic Real Estate Platforms which lists everything from Land to Commercial Properties and everything in between to find prospective buyers and tenants.

 

Luxely eliminates the need to be listed multiple platforms by creating an exclusive Luxury Real Estate Platform where Demands and Offerings can meet seamlessly and result in productive, fruitful transactions.

 

So we are inviting all Luxury Real Estate agents to come and register with us at Luxely.lk and make use of the Social Media marketing campaigns and SEO benefits we have to offer to get a broader reach.

 

References

 

http://www.dailymirror.lk/article/KPMG-bullish-about-Sri-Lanka-s-luxury-real-estate-market–153834.html

https://lmd.lk/why-is-now-a-good-time-to-invest-in-the-property-market-of-sri-lanka/

Sri Lanka as a Luxury Destination

Sri Lanka has been hailed a Paradise on Earth by the early explorers, traders etc. It was filled with expensive pearls, elephants, gems, cinnamon, etc. and was considered a destination where a King’s Luxury needs can be fulfilled easily.

That was in the past, Today Sri Lanka is slowly turning into a Luxury Destination for tourists, business travelers, entrepreneurs, etc. with its ever expanding skylines, high rises, hotels, reclaimed beach fronts.

In this article series we will be looking at three verticals of Luxury which can found in contemporary Sri Lanka starting of living.

 

Luxury Living!

Sri Lanka is becoming hub for Luxury Real Estate with investment projects from India, China, Singapore and many more countries involved. Some of the most ambitious projects are listed below;

 

Altair Colombo
Altair (Photo Credit Altair Website)

Altair – This is arguably the most iconic building project in Colombo, Sri Lanka. This building is shaped as a capitalized letter A and designed by renowned architect Moshe Safdie who also designed Singapore’s iconic Marina Bay Sands project.  For more information visit the project website.

 

Cinnamon Life
Cinnamon Life (Photo Credit Cinnamon Life Website)

Cinnamon Life – This is said to be a city within the city of Colombo, with Luxury Hotel, Luxury Apartments, Luxury Workspaces integrated together in a 4.5 million square foot area in the heart of the city. The architect of this ginormous project is Cecil Balmond who has designed many iconic buildings around the world. For more information visit the project website.

 

Marina Square
Marina Square (Photo Credit Marina Square Website)

Marina Square – Another Luxurious Condominium with five towering buildings which is integrated to have all amenities and scintillating views of the sea. This project is intended to be not just a space for living but for also an active lifestyle. For more information visit the project website.

 

There are many more projects such as Ritz Carlton Residencies Colombo, Capitol Twin Peaks, etc. not to forget the Port City Project which are also worth mentioning and to be excited about. It is obviously going to be a Luxurious future for Sri Lanka from year 2020 onwards. In coming articles we will talk about other aspects of Luxury in Sri Lanka.

Laws governing Real Estates in Sri Lanka

Sri Lanka being a multi cultural, multi ethnic country is governed by multiple laws depending on the geographic area of the country. Also Sri Lanka had the influence of its Western colonial rulers, mainly the Portuguese, the Dutch and the English when it comes to governing laws of Sri Lanka.

 

Sri Lanka has the following laws in place within its borders as of 2019;

 

  • The Roman-Dutch Law – Introduced by the Dutch, thi laws is the most influential branch of Island’s legal system and considered as the common law of Sri Lanka.

 

  • The English Law – Introduced by the English, this law is also known as British law and Sri Lanka’s Criminal Law is mostly based on this.

 

Apart from the two main laws mentioned above, Sri Lanka also has certain laws that governs certain parts of the Island and demographics. These are known as Personal Laws and are as following;

 

 

  • The Kandyan Law – Applicable only to Sinhalese families and their descendants living in regions coming under Kandyan Kingdom (Central Province of the country and its suburbs).

 

  • The Thesawalamai Law – Applicable only to Tamil families and their descendants living in Jaffna peninsula. This law governs all immovable properties like lands and buildings within the region.

 

  • The Muslim Law – Applicable only to practitioners of Islam religion.

 

Apart from these general laws; there are many acts which you need to be aware of if you intend to buy or rent real estate within Sri Lanka.

  • Rent Act No. 7 of 1972 – This act governs all aspects of renting property.

 

  • Protection of Tenants (Special Provisions) Act No. 28 of 1970 – This act protects tenants from owners who force tenants out any properties.

 

  • National Housing Development Authority Act No. 17 of 1979 – This act oversaw the establishment of National Housing Development Authority (NHDA).

 

  • Ceiling on Housing Property Law No. 1 of 1973 – This law regulates size, ownership, cost of construction  of properties.

 

  • Pradeshiya Sabhas Act No. 15 of 1987- This act created the Pradeshiya Sabhas for local administration.

 

  • Urban Development Authority Act No. 70 of 1979 – This act established the Urban Development Authority (UDA).

 

  • National Housing Act No. 37 of 1954 – This act created the National Housing Commissioner.

 

  • Urban Councils Ordinance No. 61 of 1939 – This governed the establishment of Urban Councils.

 

  • Land Acquisition Act No. 9 of 1950 – This act governs provisions for acquiring of private lands for public use.

 

  • Land Reform Law No. 1 of 1972 – This act utilizes agricultural lands efficiently to generate more employment and productivity.

 

  • The Land Grants (Special Provisions) Act No. 43 of 1979 – This act grants agricultural lands or estate lands for Sri Lankans without lands.

 

  • Primary Courts Procedure Act No. 44 of 1979 – This is used to settle land disputes resulting from war, act of violence, etc.

 

  • The Prescription Ordinance No. 22 of 1871 – This sets time duration for insulating actions in courts of law.

 

 

Luxely.lk is a Luxury Real Estate Platform for Selling and Renting Luxury Properties.

Why invest in Sri Lankan Luxury Real Estate?

Sri Lanka also called Serendib, Taprobane, Pearl of Indian Ocean has fascinated explorers of the past for generations. With its tall coconut trees, high mountains, pristine beaches and smooth flowing rivers, Sri Lanka is a paradise on Earth.

 

This small Island nation has a lot to offer for tourists, investors alike. Listed as the Best Country to Travel for the year 2019 by the LonelyPlanet, Sri Lanka is a hot bed for tourism. Furthermore city of Colombo, Sri Lanka was adjudged as the fastest growing tourist destination in South Asia and 4th fastest growing city in the World by Mastercard Global Destinations Cities Index in the year 2016.

 

Image Courtesy Port City Colombo Web Site (http://www.portcitycolombo.lk)

Adding to that Colombo city is going through a rapid expansion mainly due to the Port City project which is due to be completed in the year 2020.

 

Sri Lanka is slowly making itself into a Luxury destination by starting off from the city of Colombo. There are so many Luxury Apartment Buildings, Housing projects coming up in and around Colombo. Namely the Altair, Colombo City Center, etc. With a tourist trend of staying in informal accommodations as opposed to Hotels with the emergence of sharing economic startups, These Luxury Apartments and Housing are expected to be in high demand in the coming future. This means good return on investment for investors and Luxury travelling experience for tourists, A win-win scenario for all.