Sri Lanka Property Buying Guide

How to Find and Buy the Right Property in Sri Lanka?

How to research for property

Whether you are a local or a foreigner, when purchasing a property in a particular country, there are a set of laws and regulations to abide by. It also helps to know the ins and the outs of selecting a property to be able to make the best purchase.

When choosing amongst the property in these cities, you could either work with a real estate agent or go through the newspapers or take the fast track with LankaPropertyWeb Filter your search based on what you are looking for and locate your dream home in minutes. When selecting land to build a house, consider its location, the access to utilities and facilities, zoning requirements, average plot prices, etc. These may impact your future construction project and your daily life once you have built your home on it.

However, when purchasing an apartment, the requirements to consider are different.

Getting insight into an apartment before you purchase it helps you select your Ideal Home easily. It also gives you an idea of how you can plan out your financing options. Here are a few factors to address in the process.

  • The completion date and payment plan (if it is under construction)
  • Availability of the necessary documents and approvals for the development stage they are in
  • If the property is mortgaged to a bank, the impact of it on the issuance of deeds.
  • The reputation of the developer and contractor (for apartments)

Understand the average prices in the area

Research the market and make sure the property you have chosen is the correct one in terms of value and location. You can use tools such as the House Price Index, Area guides, ROI Calculator, and price comparisons between different ads to assist you in selecting the best property.

Through our area guide, you can learn more about the particular city and what it is surrounded by. It helps you find the ideal property close to a selected school, university, or workplace.

The House Price Index designed by LankaPropertyWeb provides information on the average property prices in Sri Lanka, its overall 9 provinces, and Colombo as well. Information can also be compared between different quarters of different years to find the fluctuations in property prices.

Knowing the average prices and finding a property in the most favorable areas will ensure your daily life in the city is convenient and that you get your value for money.

Investing or Living?

Investing in property has always been recognized as a guaranteed source of income. Whether you live in it and earn from appreciation or purchase and give it out on rent, the returns you’ll be able to enjoy depends on your property in itself. That is why we recommend you calculate your return on investment for a property first before selecting it.

Return on Real Estate Investment

This is the percentage of return a real estate investor can gain after deducting the related expenses of the investment. Return comprises two elements. The first one is the capital gain which is the value appreciation of the property during the holding period or the price you will sell the property for. The other is the income generated during the period (rent income). To calculate the ROI, deduct the expenses you have incurred during the holding period such as insurance premiums, management fee, interest paid (if the property was bought on a bank loan) etc.

Using the LankaPropertyWeb ROI Calculator designed especially for this you can find your returns faster and easily. To find out more about how you can calculate your return read our article on Learning How to Use the ROI Calculator

How to find a property with the best ROI

Property ROI mainly depends on two key elements, first one is value (capital) appreciation of the area and the second one is generatable income of the property. For example in the Colombo 03 area property value appreciation is around 5-6% whereas if you invest in a 3 bedroom decent apartment in the same area you may rent it and earn about LKR 250,000 monthly rent income. The income you earn from a property can vary depending on several factors. To find the best property that is worth an investment consider the area property value appreciation rate and the income that can be earned from the property. Value appreciations are mostly linked with scarcity of supply, higher demand and infrastructure developments.

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