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.
- Reasons to invest in real estate in Sri Lanka
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.
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.
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.
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.
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.
- 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.