Real estate is considered one of the top assets which provides a good return on investment. If you are looking to buy a property to reside you may be considering a house, an apartment or a flat to live in. In case you want to purchase a property just to invest in, then you should follow the below points before buying a property.
First and foremost, why do you want to buy? Is it an investment Or Self Use?
We are limiting this Blog to Residential properties only, for commercial properties, we will have a separate Blog.
If it’s an investment what are your expectations from your investment? Just capital appreciation or rental yield.
The second thing to consider is your budget. It’s important to have an approximate minimum and maximum budget for both investment and self-use purposes. Based on the down payment available to you and your bank loan eligibility, you can determine your budget. Be sure to familiarize yourself with the average prices in the area where you want to buy so that you know what to expect. Don’t fix up your budget considering a prospected sale of any property, it is advised not to buy before getting into the sale agreement of your existing property.
And the source of fund has to be clear is it through a Bank loan or self-funding?
If it’s a Bank Loan (Have you checked your CIBIL score or do you have a pre-approved loan) and note that you can have a maximum loan of 80-85% of the cost of the property or 5 times of annual income. If it’s self-funding, are you ready with the funds or the availability of funds will be in lump sum at various stages, we suggest min 40% of the cost of property should be available with you at the time of buying.
If you have a capital gains account, you need to know the timelines for possession and registry. According to the law, capital gains must be invested in a residential property only. You can check the timelines of possession and registry from your financial advisor or a Charted Accountant.
If it’s investments and you are clear with the budgets and your source of fund is clear, You should hire a Real-estate advisor who can Suggest your properties in developing areas where you can have maximum returns with security of funds.
Remember: While choosing a real estate Advisor – you need someone who can understand your requirements and can suggest you good properties and his knowledge of the area you wish to invest, avoid salesmen who are just selling without even listening to your requirements.
Always invest in those properties which fulfill the requirements of general buyers. Avoid buying penthouses/ customized layout designs/ Jodi flats or Top floors, General apartments are suggested with a middle floor choice as selling them is easy.
Under Construction Properties can also be considered as they give the best returns, but check the profile of the developer / builder before investing
We suggest, don’t over leverage yourself to buy any investments.
If it’s self-use: what is your age?
If you are in your early forties or below 40 your requirements of amenities are different from the people in the age group of 60 or 60 plus. Generally, when you are around 40, you look for areas near to your job work area /schools / malls / shopping arcades etc. Or your lifestyle facilities like Sports complexes or Golf course etc.
But with the age group of 60 or 60+ You look for medical facilities, parks, greenery in an around the premises, at the same time you also look for good connectivity with the city
Now look for your Family Size, single family or multifamily (joint family) which defines a requirement of the area of the property or even type of property
I mean apartment or an independent property (Villa or Kothi). An optimum size of the property is always suggested which fits your requirement, sometimes we take impulsive decisions for bigger houses where maintaining the home becomes very expensive.
Do you want to immediately shift or do you have time to the shift in the house? Ready to move & under construction.
Based on the points which we discussed you must make up your mind for a ready to move or under construction home. As when u have limited budget and your requirement of size is bigger, you will either have to opt under construction property or something in developing areas.
Remember: While selecting an under-construction property you must always check the builder / developer’s profile and the track record. We even advise to visit the completed projects by the developer.
Or if u have finalized a specific project/society please re- evaluate the reasons of your selection on the discussed parameters.
We have often seen in many cases where your friend or relative are living and you take an emotional decision of buying in the same project or society
