Investment in real estate involves the purchase, ownership, management, rental and/ or sale of real estate for profit. Here, profit is the key word. If you are going to reside in the house, other factors such as proximity to the work place, school, family and friends come into play. For instance, you will not mind spending a few lakh of rupees if the house were close to your child's school or your office. But when it comes to an investment, all you have to look at is the current price and the potential value of the particular city or the suburb.
Choosing the location
There should be some huge infrastructure or economic activity in the offing, which should drive the choice of the suburb/ city. "An investor should first check if the location is doing well. Secondly, the location should witness some big infrastructure development such as the launch of new commercial spaces, airport, IT parks etc. Such developments should trigger the purchase of the property from an investment perspective," says Abhishek Kiran Gupta , head-research and real estate intelligence service, Jones Lang LaSalle .
Choosing the developer
The quality of the construction, sticking to deadlines and the commitment of the developer are some crucial factors. If you invest in a property in another city, then it becomes difficult to monitor the progress and track every minute detail of the project. In such a situation, the credibility of the developer assumes higher importance. "Typically, real estate investors look at under-construction projects from an investment perspective. You make gains faster in an under-construction project than a readyfor-possession property. And for such under-construction projects, you should opt for a trustworthy builder," Gupta adds.
Evaluating the property
The value of a property depends upon several factors, such as the location, size of the house other amenities offered by the housing society and the overall market trends in terms of appreciation and depreciation. But before putting finalising the property, you have to get the right quote from a third party. "If an investor is keen on buying a property, he should ideally get a surveyor or a couple of brokers to evaluate the property. Apart from checking out with the local residents, get the property evaluated by 2-3 brokers to get an accurate quote," Gulam Zia , director, national advisory services, Knight Frank India .
The actual cost
Owning a flat at Rs 8,000 per sq ft for a 1,000 sq ft area at a posh suburb may sound irresistible. Forget the obvious expenses on stamp duty and maintenance. Look up the cost of registering the property with the local electricity board, the one-time expense of an electric meter, the cost of furnishing, fittings and all other expenses involved in customising the property to your needs and tastes. Also, most townships insist on compulsory car park charges, clubhouse membership charge and an advance payment of maintenance charges for 1-2 years. The other amenities such as landscaped garden, gymnasium, swimming pool come at additional charges. All these will add a few more lakhs to the overall cost of the property. Hence, don't make a decision based on just the base cost of the flat.
Document check
You may not insist on all the documents but if you are going for a home loan to finance your purchase, the bank will ask for every small document. Hence, it is always better to do a document check before you start negotiating with potential sellers. The most important documents required to sell a residential property are the housing society share certificate and the sale/ purchase deed. The sale deed will confirm the land is on the seller's name who alone has the right to sell the land.
Choosing the location
There should be some huge infrastructure or economic activity in the offing, which should drive the choice of the suburb/ city. "An investor should first check if the location is doing well. Secondly, the location should witness some big infrastructure development such as the launch of new commercial spaces, airport, IT parks etc. Such developments should trigger the purchase of the property from an investment perspective," says Abhishek Kiran Gupta , head-research and real estate intelligence service, Jones Lang LaSalle .
Choosing the developer
The quality of the construction, sticking to deadlines and the commitment of the developer are some crucial factors. If you invest in a property in another city, then it becomes difficult to monitor the progress and track every minute detail of the project. In such a situation, the credibility of the developer assumes higher importance. "Typically, real estate investors look at under-construction projects from an investment perspective. You make gains faster in an under-construction project than a readyfor-possession property. And for such under-construction projects, you should opt for a trustworthy builder," Gupta adds.
Evaluating the property
The value of a property depends upon several factors, such as the location, size of the house other amenities offered by the housing society and the overall market trends in terms of appreciation and depreciation. But before putting finalising the property, you have to get the right quote from a third party. "If an investor is keen on buying a property, he should ideally get a surveyor or a couple of brokers to evaluate the property. Apart from checking out with the local residents, get the property evaluated by 2-3 brokers to get an accurate quote," Gulam Zia , director, national advisory services, Knight Frank India .
The actual cost
Owning a flat at Rs 8,000 per sq ft for a 1,000 sq ft area at a posh suburb may sound irresistible. Forget the obvious expenses on stamp duty and maintenance. Look up the cost of registering the property with the local electricity board, the one-time expense of an electric meter, the cost of furnishing, fittings and all other expenses involved in customising the property to your needs and tastes. Also, most townships insist on compulsory car park charges, clubhouse membership charge and an advance payment of maintenance charges for 1-2 years. The other amenities such as landscaped garden, gymnasium, swimming pool come at additional charges. All these will add a few more lakhs to the overall cost of the property. Hence, don't make a decision based on just the base cost of the flat.
Document check
You may not insist on all the documents but if you are going for a home loan to finance your purchase, the bank will ask for every small document. Hence, it is always better to do a document check before you start negotiating with potential sellers. The most important documents required to sell a residential property are the housing society share certificate and the sale/ purchase deed. The sale deed will confirm the land is on the seller's name who alone has the right to sell the land.
No comments:
Post a Comment