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 outs of selecting a property to be able to make the best purchase.

In Sri Lanka, the property is generally well placed throughout the island. They are surrounded by natural landscapes, amenities, and infrastructure of every kind.

The country has 9 provinces and 25 districts; with its metropolitan city of Colombo subdivided further into 15 parts, there is a range of real estate to choose from for investing in. Some cities with properties in high demand are Colombo, Gampaha, Kandy, and Galle. However, when you are selecting these cities, you need to think of what you expect from the new investment. If it’s for a vacation home, cities like Kandy or Galle are ideal because of the rich natural resources and relaxing vibe.

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. With LankaPropertyWeb you can filter your search based on what you are looking for and locate your dream home in minutes. When selecting lands to build property in; consider its location, the access to utilities and facilities, zoning requirements, average plot prices, etc. These may impact your future 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.
• The availability of infrastructures, common facilities, and roads as per the Plan

Understand the average prices in the area (how to use our tools)

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, covering 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 finding a property in the most favorable areas will ensure that you get your value for money.

Investing or Living?

Property as an investment 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 depend on the nature of your property in itself. That is why we recommend you to calculate your return first before making an investment in a property.

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 of two elements. The first one is the capital gain which is the value appreciation of the property during the holding period you get when you sell the property. 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, maintenance expenses, interest paid (if the property is bought on a bank loan), etc.

The LankaPropertyWeb ROI Calculator has been designed especially for this and using that you can find your returns faster and easily. To find out more about how you can calculate your return read our article on LankaPropertyWeb Tools: Learning how to use the LPW ROI calculator.

How to find a property with the best ROI

Property ROI mainly depends on two key elements, the first one is the value (capital) appreciation of the area and the second one is the 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 as of the monthly rental income. The income you earn from a property can vary depending on several factors. To find the best property that is worth an investment, it is advisable to consider the property value appreciation rate of the area and the income that can be earned from the property. Value appreciations are mostly linked with the scarcity of supply, higher demand, infrastructure developments, etc