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Investing in property has always been an open and shut case; there hasn’t been two ways about it. However one has to remember that there is always a boom period and correction period, even for real estate.
Currently, the real estate market is going through a correction period; sales have gone down drastically and residential projects are not minting money as before. Many may perceive it as a wrong time to buy real estate, but this is the perfect opportunity for those thinking of investment property.As sales numbers are down, developers are ready to negotiate a good price and give better options for those looking to buy property during the current phase. The buyers in turn also bargain for a good price and other incentives by taking advantage of the state of the market.
But property investment in India is not that simple. Buying property is not as simple as trading in the stock market. Property transactions take time and you can’t buy and sell it as easily as stocks. One should make sure they get the best value for money by getting the right property at the right price. To learn more about how to invest in property here are some property investment tips that you should keep in mind.
- A very common deception that real estate brokers indulge in is in matters of carpet area. In the name of super-built up area, they include area outside the walls such as corridors and staircases provide reduced carpet area. For example, builders claim the super-built up area of the apartment is 3000sq. ft but offer only 2700sq. ft. of actual carpet area.
- While buying homes, or even other property, it’s essential to buy it from a reputed builder with a good track record. That way there is a surety of quality and a guarantee of the right price. To find out if the builder is reputed or not, one could check out their past or current projects or inquire on the online real estate forums.
- Be wary of the actual cost while buying property. Many brokers tell only the cost of the flat. They exclude service tax, additional expenditure like club house, parking, developmental fee, etc which elevates the cost considerably.
- If the project is still under construction, find out which are the banks financing the project. Eliminate the possibility of the project going bankrupt before completion to ensure you’re not at risk with the investment.
- Don’t just rely on pictures you see on the website or brochures. Go to the site to physically check out the site and thoroughly inspect it. If possible talk to the neighboring building residents to find out if the land is disputed or any other problems.
- Be sure to check the surroundings of your property. Keep an eye out for infrastructure developments such as malls, flyovers and commercial complexes. These can tremendously boost your property value in a few years. Also make sure it’s not near any sewage treatment plant or polluting factory.
- Make sure you check the builder’s approvals and licenses. Documents like certificate of work, environmental clearance, title deed, property tax receipts, etc should be in place.
- The property should have good connectivity to schools, hospitals, train/ bus stations, markets or else one would spend majority of their time travelling to and fro.
- It’s of utmost importance to check the locality around the new property. If you are planning to move in with a family, the locality should have a lot of residential buildings and not be in an, for example, industrial area. It wouldn’t be safe for the family as would attract a different kind of crowd.
- Checking the resale value of the property is essential in case you decide to move. Is it in a locality where people would want to buy the house? Are there ny attractions near it such as schools, malls? It’s always good to keep it in mind in case you decide t sell the place in the near future.
The above points are helpful if you are confused between two homes and need accurate parameters to judge them on. It will help you choose the home that is right for you according to your requirement.
Property investment for beginners requires proper research and planning. Before one plans to buy a house, proper financial planning must be done. First step is to assess your current financial situation, if there are any other loans payments pending such as car and student loan, life insurance, etc. Next, you must set a budget for your home which is well within h your economic reach. Choosing a budget depends upon your monthly income, mandatory expenditures and how much you can spend on EMIs. Other than that, it is advisable to have a healthy amount in savings in case any emergency arises.
Improving your CIBIL score is also of utmost import. It keeps a track of all your credit. It is checked as soon as one applies for a loan. A good credit score ensures that the loan is approved and it can avail you the loan at a much cheaper interest rate. A low credit score doesn’t make you eligible for a loan. Thus keeping a high CIBIL score is very important.
Understand your payment plan thoroughly. Different builders have different plans such as construction-linked plan, time-linked payment plan. Some prefer a part of the payment and the rest in cheque. This is important to understand as it can affect your cash flow. The Construction linked Payment Plan says that a certain amount is paid during booking and the rest is paid in parts as the building gets built. The Time linked plan demands that the customer pay the installments as per a time period irrespective of if the construction is on time or not.