The benefit of investing in Tier-3 cities is that with very little investment you can
become a part of the growth bandwagon. Lucknow and Hyderabad are two cities
which are worth looking at.
What are the long term benefits of investing in Tier-3 cities?
The benefit of investing in Tier-3 cities is that with very little investment you can
become a part of the growth bandwagon. Lucknow and Hyderabad are two cities
which are worth looking at.
Is it good to invest near Highways and Expressways?
Today, the Expressways and National Highways are where all the property
development is taking place. People look for affordable housing and these can only
be provided along these high-speed transport corridors that offer good connectivity
and affordable options. Highways provide good connectivity to far-off as well as
nearby places thus, bringing appreciation in prices due to increased demand. In
metros, highways and expressways open up new avenues or development zones
which always form a part of a larger master plan. You should keep a horizon of four to
five years while investing around new expressways.
Are suburbs and peripheries of large cities witnessing an escalation in prices?
As expansion of commercial districts into suburbs takes place, it fuels demand for
rental accommodation. Most IT/ITeS/manufacturing facilities demand rental
accommodation and that drives up prices.
What should one check for before buying property in peripheral areas?
What should one check for before buying property in
peripheral areas?
Infrastructure in the area, connectivity, builder’s reputation and potential to deliver
and price of comparable properties are key components a buyer needs to take into
consideration. A buyer should also carefully check points like builder’s experience,
number of projects completed and delivered, banking institutions involved and
present buying options available to suit your requirements. It is better to buy at the
beginning of a development cycle in peripheral areas as it will take at least 4-5 years
to become liveable.
peripheral areas?
Infrastructure in the area, connectivity, builder’s reputation and potential to deliver
and price of comparable properties are key components a buyer needs to take into
consideration. A buyer should also carefully check points like builder’s experience,
number of projects completed and delivered, banking institutions involved and
present buying options available to suit your requirements. It is better to buy at the
beginning of a development cycle in peripheral areas as it will take at least 4-5 years
to become liveable.
What are the disadvantages of investing in peripheral areas?
Lack of accessibility to public transport and connectivity to city centres, underdeveloped
infrastructure and sometimes even lack of basic amenities such as water,
electricity, etc as compared to the main city could be some disadvantages.
What are the advantages of investing in peripheral areas?
Peripheral areas are further from the core city than the suburbs. They form the fringes
of suburban areas and are chosen by buyers because they are cheaper than city
centres and even suburbs.
You can get bigger spaces at affordable prices with modern facilities which are not
available in age old properties within city limits. Rate of return on investment is more
in peripheral areas, depending on the location. You also get more greenery and
open space in the peripheral areas.
of suburban areas and are chosen by buyers because they are cheaper than city
centres and even suburbs.
You can get bigger spaces at affordable prices with modern facilities which are not
available in age old properties within city limits. Rate of return on investment is more
in peripheral areas, depending on the location. You also get more greenery and
open space in the peripheral areas.
What are the drivers that make suburbs the preferred investment hubs?
As city centres become tediously expensive in commercial real estate, secondary
business districts have been evolving close to the suburbs. In Mumbai, Nariman Point
gave way to the Bandra Kurla Complex and also the Andheri stretch. Thane is
expected to become a Commercial Business District in a few years. In Delhi, the
business district has moved from New Delhi to Secondary Business Districts such as
Nehru Place and Bhikaji Cama Place and now to suburban business districts such as
Gurgaon, Noida and Ghaziabad.
Suburbs are chosen because of proximity to the work place, accommodation that is
within user budgets and good connectivity, schools and hospitals in the vicinity and
therefore a better lifestyle. There is good potential if the developers keep the real
demand in mind. For instance, Noida and Ghaziabad being suburbs of Delhi have
picked up pace when it comes to being the preferred location for home buyers. This
is basically because of availability of affordable homes for the middle and uppermiddle
class in these two areas.
What are the advantages of investing in suburbs of big cities?
INVESTING IN PERIPHERY AND SUBURBS
Proximity to the metro city, affordable property prices, quality infrastructure and
availability of spacious and well managed residential spaces are the key factors
driving the growth of suburbs.
Proximity to the metro city, affordable property prices, quality infrastructure and
availability of spacious and well managed residential spaces are the key factors
driving the growth of suburbs.
Is it preferable to buy in commercial hubs?
The growth prospects of residential real estate is promising in fast growth corridors
driven by manufacturing, IT and ITeS sectors, supported by social infrastructure such
as educational institutions, hospitality and healthcare. These industries drive demand
for houses.
driven by manufacturing, IT and ITeS sectors, supported by social infrastructure such
as educational institutions, hospitality and healthcare. These industries drive demand
for houses.
Is it good to invest near airports?
Yes, presence of an airport nearby brings appreciation of values to residential
property. For instance, with the new international airport coming up in Navi Mumbai,
Panvel’s future seems very promising. Therefore, the area is attracting lot of
developers and real estate investors. Similarly, Bandlaguda, located in South
Hyderabad, is witnessing immense interest from buyers and investors, especially for
plots. Located close to the airport, Hi-Tech City and Outer Ring Road are the major
advantages of this locality. North Bangalore’s property values rose and buyer interest
peaked after the new airport was commissioned.
property. For instance, with the new international airport coming up in Navi Mumbai,
Panvel’s future seems very promising. Therefore, the area is attracting lot of
developers and real estate investors. Similarly, Bandlaguda, located in South
Hyderabad, is witnessing immense interest from buyers and investors, especially for
plots. Located close to the airport, Hi-Tech City and Outer Ring Road are the major
advantages of this locality. North Bangalore’s property values rose and buyer interest
peaked after the new airport was commissioned.
Should one invest in small cities?
In small cities, the appreciation is usually less but so is the initial investment compared
to the metros. However, with major infrastructural developments, cities like Indore,
Coimbatore, Bhubaneshwar and a few others are witnessing growth in prices as well
as returns. Always choose a city that has good economic drivers such as IT, ITeS or
manufacturing hubs. This ensures continued user interest for re-sale when you want to
exit an investment or for rental returns while you hold the property till it is wellleveraged
and gives good returns.
to the metros. However, with major infrastructural developments, cities like Indore,
Coimbatore, Bhubaneshwar and a few others are witnessing growth in prices as well
as returns. Always choose a city that has good economic drivers such as IT, ITeS or
manufacturing hubs. This ensures continued user interest for re-sale when you want to
exit an investment or for rental returns while you hold the property till it is wellleveraged
and gives good returns.
What could be the possible downside of investing in big cities?
Land is extremely expensive in big cities. Therefore, the land component in property
prices in big cities is very high. As downtown areas of the city become more
expensive, buyers have to move further and further away to the suburbs and
peripheries to buy property that fits their budget.
Moreover, population in cities is increasing at an alarming rate and demand for
housing is directly proportional to the increase in population. This is a reason for
properties becoming expensive in big cities.
prices in big cities is very high. As downtown areas of the city become more
expensive, buyers have to move further and further away to the suburbs and
peripheries to buy property that fits their budget.
Moreover, population in cities is increasing at an alarming rate and demand for
housing is directly proportional to the increase in population. This is a reason for
properties becoming expensive in big cities.
How much appreciation can be expected by investing in big cities?
Typically there is a 10 per cent escalation in prices annually across city areas.
If you are investing in a new property in a virgin corridor where development work is
yet to begin, before infrastructure comes into the new corridor, prices are very low.
Once infrastructure work begins prices rise by about 25 per cent. When the property
development reaches mid-way point, there is another 25 per cent escalation in
prices. Six months from completion there is another 25 per cent escalation. Once
possession is handed over there is another 25 per cent increase in rates. This is true for
places where Greenfield development is taking place.
The mid-end and affordable housing segments will record healthy appreciation in
capital values in the short term from a low base. High-value property yields lower rates
of appreciation.
In new growth corridors where development work precedes real estate, the growth in
values is normally about 50-70 per cent. However, these are broad estimates.
There is another return that has not been factored in which is the rental yield. Property
value attains its true potential when the neighbourhood is fully populated. If you are a
long-term investor and want to wait for the property to attain full potential, lease out
the property and capitalise on the regular rental returns. The annual yield is computed
as a ratio of capital to rental values. Normally residential property gives a simple yield
of 2-4 per cent.
Appreciation largely depends on industrial, commercial and infrastructure
development in the area. Project-specific price increases can be expected across
these markets. This pertains specifically to projects that are being delivered or are
nearing completion.
If you are investing in a new property in a virgin corridor where development work is
yet to begin, before infrastructure comes into the new corridor, prices are very low.
Once infrastructure work begins prices rise by about 25 per cent. When the property
development reaches mid-way point, there is another 25 per cent escalation in
prices. Six months from completion there is another 25 per cent escalation. Once
possession is handed over there is another 25 per cent increase in rates. This is true for
places where Greenfield development is taking place.
The mid-end and affordable housing segments will record healthy appreciation in
capital values in the short term from a low base. High-value property yields lower rates
of appreciation.
In new growth corridors where development work precedes real estate, the growth in
values is normally about 50-70 per cent. However, these are broad estimates.
There is another return that has not been factored in which is the rental yield. Property
value attains its true potential when the neighbourhood is fully populated. If you are a
long-term investor and want to wait for the property to attain full potential, lease out
the property and capitalise on the regular rental returns. The annual yield is computed
as a ratio of capital to rental values. Normally residential property gives a simple yield
of 2-4 per cent.
Appreciation largely depends on industrial, commercial and infrastructure
development in the area. Project-specific price increases can be expected across
these markets. This pertains specifically to projects that are being delivered or are
nearing completion.
Should one look at investing in big cities?
INVESTING IN CITIES
When it comes to choosing a location, the consumer looks at connectivity and
availability of basic urban and social infrastructure in that area. Big cities have that
advantage. Land values are very high in many big cities. When investing in a big city,
keep a few things in mind. If you are purchasing for self use, buy in a neighbourhood
that has all the conveniences that you require and also has good accessibility to the
rest of the city. Even in premium localities, if you keep searching, you will find
properties that suit your budget. If you cannot afford the premium rates, look for a
locality on the fringes of your area of choice. This will have all the advantages of
proximity to the main locality but sport lower price tags. Also, look for property that is
being re-developed in city areas. They will be new and come with a maintenancefree
period. Older houses come cheaper but make sure you invest in refitting and
refurbishing the old plumbing and electrical lines before moving in if you want a
hassle-free stay.
If you are looking at more open spaces with modern complexes, move to growth
corridors on the suburbs and peripheries of cities. Since, they are built to suit modern
lifestyles and social facilities benchmarks are raised, you will get more add-ons such
as landscaping, cycling and jogging tracks, club houses and swimming pools and
other sports facilities. As they are at a distance from the city centre, they come with
cheaper price tags and construction linked instalment plans.
When it comes to choosing a location, the consumer looks at connectivity and
availability of basic urban and social infrastructure in that area. Big cities have that
advantage. Land values are very high in many big cities. When investing in a big city,
keep a few things in mind. If you are purchasing for self use, buy in a neighbourhood
that has all the conveniences that you require and also has good accessibility to the
rest of the city. Even in premium localities, if you keep searching, you will find
properties that suit your budget. If you cannot afford the premium rates, look for a
locality on the fringes of your area of choice. This will have all the advantages of
proximity to the main locality but sport lower price tags. Also, look for property that is
being re-developed in city areas. They will be new and come with a maintenancefree
period. Older houses come cheaper but make sure you invest in refitting and
refurbishing the old plumbing and electrical lines before moving in if you want a
hassle-free stay.
If you are looking at more open spaces with modern complexes, move to growth
corridors on the suburbs and peripheries of cities. Since, they are built to suit modern
lifestyles and social facilities benchmarks are raised, you will get more add-ons such
as landscaping, cycling and jogging tracks, club houses and swimming pools and
other sports facilities. As they are at a distance from the city centre, they come with
cheaper price tags and construction linked instalment plans.
What is a better investment – city or suburb?
Ideally, it is always better to invest when land cost as a percentage to sale price is 15
to 20 per cent, so that it grows. With land cost being very high within cities, hovering at
approximately Rs 7,000-14,000 per sq m, it is always better to invest in growing
corridors depending on whether you want for pure investment or want to move in.
to 20 per cent, so that it grows. With land cost being very high within cities, hovering at
approximately Rs 7,000-14,000 per sq m, it is always better to invest in growing
corridors depending on whether you want for pure investment or want to move in.
Which is good for investment – plot or flat?
If you are a long-term investor, say 5-10 years, a plot is the best option. If you want
annual returns to manage a part of EMIs, flats are better.
annual returns to manage a part of EMIs, flats are better.
What are the documents you need to check before buying?
* Check for proper conveyance of title in favour of the builder.
* Check the licence/development right/approvals of the builder.
* Check clear and marketable title of the project.
* Ensure execution of proper Allotment Letter/Sale Agreements on your payments.
* Ensure whether reputed financial companies approve the project. This will help you
in getting financial loans.
* Check the tentative layout/building plan and verify the plinth area of the
apartment. It is advisable to check the carpet area of the apartment and find out
if the difference between plinth area and carpet area is reasonable.
* Ask for Occupation/Completion Certificate.
* Ensure the Conveyance Deed is registered after the entire payment has been made.
* For buying a property you need to check Deed of Conveyance, Mutation
Certificate (for complete property), Land Registration Status, Sanction Plan, Search
Report and Payment Schedule (for under construction). It is a must that you go
through all the documents relating to the origin of the property, chain of Title,
Occupancy Certificate, sanctions from various authorities dealing with building
plans, fire safety and Completion Certificate.
* For re-sale property, check demand notice relating to renovation, tax dues and
latest receipts of payments made towards various out-goings such as water,
electricity and ground rent.
How do you choose the right type of property?
How do you choose the right type of property?
Depending on the chosen budget, one can decide the type of property. If you are
an end-user, the size of your family, along with the budget can be a determining
factor while choosing the type of house you need. There is a wide range to choose
from today as the market abounds in various housing formats – from 1, 2, 3 and 4BHK
apartments, to studios, villas and row houses, to builder floors and independent
houses. Multi-storey projects and townships with all amenities in one project –
clubhouse, swimming pool, meditation center, health clubs, departmental stores,
schools, cinemas, sports facilities, banquet/party halls are what most end-users are
looking at today.
Depending on the chosen budget, one can decide the type of property. If you are
an end-user, the size of your family, along with the budget can be a determining
factor while choosing the type of house you need. There is a wide range to choose
from today as the market abounds in various housing formats – from 1, 2, 3 and 4BHK
apartments, to studios, villas and row houses, to builder floors and independent
houses. Multi-storey projects and townships with all amenities in one project –
clubhouse, swimming pool, meditation center, health clubs, departmental stores,
schools, cinemas, sports facilities, banquet/party halls are what most end-users are
looking at today.
When is the best stage to buy?
When is the best stage to buy?
If you have the required finances, ready-to-move-in is the ideal option for a home
buyer. For an investor, a ready-to-move-in property is feasible for business as he can
buy and put it up for lease without any waiting period. Whereas, a house under
construction eases the financial burden wherein you can finance your property
through bank loans and pay less cash upfront. The downside of this type of property is
that possession will happen only after a certain time period. If you are a new investor
with limited finances, look for an under-construction property with a suitable payment
plan and keep a horizon of 2-3 years for possession. But make sure you go for a
reputed builder.
If you have the required finances, ready-to-move-in is the ideal option for a home
buyer. For an investor, a ready-to-move-in property is feasible for business as he can
buy and put it up for lease without any waiting period. Whereas, a house under
construction eases the financial burden wherein you can finance your property
through bank loans and pay less cash upfront. The downside of this type of property is
that possession will happen only after a certain time period. If you are a new investor
with limited finances, look for an under-construction property with a suitable payment
plan and keep a horizon of 2-3 years for possession. But make sure you go for a
reputed builder.
What is the market checklist before buying a re-sale property?
What is the market checklist before buying a re-sale property?
Some important tips one should keep in mind before buying a re-sale property are:
comes to price rise, it will always be proportionate to its strategic placement which
could be linked to accessibility to highways, markets, business districts and overall
living conditions.
There is a price differential between different properties within the same complex or
even the same building. In India vastu compliant units have a premium on them.
Similarly, East or South facing properties fetch better values than North and West
facing properties. Users pay more for a view in urban settings. In Mumbai, for
instance the price per unit rises as you go higher. If the property is sea-facing, there
is a hefty extra that the buyer has to shell out. In other cities, that are not quite used
to high-rises yet, the premium is for the ground to sixth floor. Higher floors do not
command a premium vis-a-vis lower floors. Pool or park facing properties have a
higher value.
The concept of Preferred Location Charges (PLC) for new properties was based
on these principles. Currently, PLC is arbitrary and there are no fixed norms for it.
There are developers who charge a PLC on every unit in the complex, which
defeats logic.
dependent on the volume of supply. Qualities such as good infrastructure, access
to markets and office and entertainment hubs are common to a locality. However,
the volume of units available for sale in the market also determines the prevailing
price. If it is a new growth corridor, the first project to get off the ground normally
comes at a reasonable price. As more developers launch projects, it becomes an
area in demand and the values keep rising steadily, normally by about 8-10 per
cent per year. A developer may break the norm in an existing locality by launching
a project that is richer in features and therefore commands a higher value. Once
there are a couple of projects in a locality that command a higher value, it pushes
the base value up.
Developers too, allow investors to make money by periodically revising values of
projects that are still under construction. Once this new value is released, brokers
and underwriters, small and big investors offload their properties at a value higher
than the original sale price but lower than the new sale price. They thus, book shortterm
profits. This cycle happens at least two to three times during the
development cycle. End users enter towards the end of the cycle and purchase at
values that are at least 50 per cent higher than the original sale price. However,
with very little holding time, they get to buy very close to possession.
If you are buying on a corridor where there are several projects, check on price
and specifications of multiple projects to get the best deal. If there is more stock
than demand, you have a better chance of negotiating a better value in the
secondary market.
to deliver on time, construction quality and the payment terms, especially in the
case of a local builder.
Some important tips one should keep in mind before buying a re-sale property are:
* Locality:
Generally, the price difference prevails for different locations but when itcomes to price rise, it will always be proportionate to its strategic placement which
could be linked to accessibility to highways, markets, business districts and overall
living conditions.
There is a price differential between different properties within the same complex or
even the same building. In India vastu compliant units have a premium on them.
Similarly, East or South facing properties fetch better values than North and West
facing properties. Users pay more for a view in urban settings. In Mumbai, for
instance the price per unit rises as you go higher. If the property is sea-facing, there
is a hefty extra that the buyer has to shell out. In other cities, that are not quite used
to high-rises yet, the premium is for the ground to sixth floor. Higher floors do not
command a premium vis-a-vis lower floors. Pool or park facing properties have a
higher value.
The concept of Preferred Location Charges (PLC) for new properties was based
on these principles. Currently, PLC is arbitrary and there are no fixed norms for it.
There are developers who charge a PLC on every unit in the complex, which
defeats logic.
* Area-wise Demand and Supply:
Price of properties within a certain area is alsodependent on the volume of supply. Qualities such as good infrastructure, access
to markets and office and entertainment hubs are common to a locality. However,
the volume of units available for sale in the market also determines the prevailing
price. If it is a new growth corridor, the first project to get off the ground normally
comes at a reasonable price. As more developers launch projects, it becomes an
area in demand and the values keep rising steadily, normally by about 8-10 per
cent per year. A developer may break the norm in an existing locality by launching
a project that is richer in features and therefore commands a higher value. Once
there are a couple of projects in a locality that command a higher value, it pushes
the base value up.
Developers too, allow investors to make money by periodically revising values of
projects that are still under construction. Once this new value is released, brokers
and underwriters, small and big investors offload their properties at a value higher
than the original sale price but lower than the new sale price. They thus, book shortterm
profits. This cycle happens at least two to three times during the
development cycle. End users enter towards the end of the cycle and purchase at
values that are at least 50 per cent higher than the original sale price. However,
with very little holding time, they get to buy very close to possession.
If you are buying on a corridor where there are several projects, check on price
and specifications of multiple projects to get the best deal. If there is more stock
than demand, you have a better chance of negotiating a better value in the
secondary market.
* Builder/Developer:
Check the builder’s track record, his financial strength, his abilityto deliver on time, construction quality and the payment terms, especially in the
case of a local builder.
What do you think is the best way to buy property?
What do you think is the best way to buy property?
You can choose options from websites. These days all information, including model
apartments, is available on the internet. After this it is important that you or your
relatives visit the sites of shortlisted properties and experience the brand before
booking.
You can choose options from websites. These days all information, including model
apartments, is available on the internet. After this it is important that you or your
relatives visit the sites of shortlisted properties and experience the brand before
booking.
How to choose the right property?
One should buy property in an area which has adequate basic amenities such as
power, water, sewerage, etc. It is important to do your checks and balances while
deciding on a project. Infrastructure in the area, connectivity, builder’s goodwill and
price of the property are key components a buyer needs to take into consideration.
A buyer should also carefully check points such as the builder’s experience, number
of projects completed and delivered, banking institutions involved and present buy
options available to suit your requirements. It is better you conduct a field survey
before identifying a suitable property meeting your budget and location preference.
power, water, sewerage, etc. It is important to do your checks and balances while
deciding on a project. Infrastructure in the area, connectivity, builder’s goodwill and
price of the property are key components a buyer needs to take into consideration.
A buyer should also carefully check points such as the builder’s experience, number
of projects completed and delivered, banking institutions involved and present buy
options available to suit your requirements. It is better you conduct a field survey
before identifying a suitable property meeting your budget and location preference.
Tips to Customers who wish to buy property:
Tips to Customers who wish to buy property:
* Check for proper conveyance of title in favour of the Builder
* Check the license/development right/approvals of the Builder
* Check clear and marketable title of the project
* Ensure execution of proper Allotment Letter/Sale Agreements on your payments
* Ensure whether reputed financial companies approve the project. This will help you
in getting financial loans
* See the tentative layout/building plan
* Verify plinth area of the apartment
* Check carpet area of the apartment and find out if the difference between plinth
area and carpet area is reasonable
* Ask for Occupation/Completion Certificate.
* Ensure the Conveyance Deed is registered after entire payment has been made.
* Check for proper conveyance of title in favour of the Builder
* Check the license/development right/approvals of the Builder
* Check clear and marketable title of the project
* Ensure execution of proper Allotment Letter/Sale Agreements on your payments
* Ensure whether reputed financial companies approve the project. This will help you
in getting financial loans
* See the tentative layout/building plan
* Verify plinth area of the apartment
* Check carpet area of the apartment and find out if the difference between plinth
area and carpet area is reasonable
* Ask for Occupation/Completion Certificate.
* Ensure the Conveyance Deed is registered after entire payment has been made.
How to buy?
How to buy?
Once you decide upon the locality, the next step is to check the developers who are
building there. The best way to do this is to do your own research. Find out who the
developers are and what they have to offer. Check out the floor plans and the types
of property that they are constructing. Many of these are available online so this can
be done at your convenience. Once you have shortlisted some properties, do your
own footwork. Check out the projects on-site. Get an expert such as a broker to show
you around. Sometimes what looks good on paper may not feel right when you see it
on the ground.
If the project is new, the choice of builder is a big decision. Check the builder’s track
record, his financial strength, his ability to deliver on time, construction quality and the
payment terms, especially in case of a local builder. Do a background check on
developers and make your assessment about where you would feel safe to make
your investment. One should always check with local real estate brokers the last
transaction price or the price of similar property in that location.
Negotiating Ability: After considering all the above, your negotiating ability is crucial
which means, leveraging the available information and a fair understanding of the
points discussed to strike a good deal.
The ‘area’ concept is very vaguely used in the housing industry. Some builders and
sellers take advantage of this ambiguity.
Carpet area is defined as the precise area within the walls of your home. If you had to
lay out a wall-to-wall carpet in your entire home, the area covered would be the
carpet area.
Built-up area is inclusive of not just the carpet area but also the area being occupied
by the walls of your home.
Super built-up area takes into account all the area under the common spaces which
is the apartments’ proportionate share of the lobby, staircase, elevator and the
corridor outside the apartment.
The confusion over super built-up area arises over what all is exactly included under
this definition according to the judgment of the builder. Some may even include the
terrace, security room, electrical room and/or pump room. The cumulative total of
these ‘extras’ is taken into account and divided by the number of apartments in
proportion to their size.
* If you get a quote for 1,000 sq ft, immediately find out if it is the carpet area or
super built-up area.
*There is no fixed ratio of super built-up to built-up or carpet area. Generally, the
ratios in multi-storey apartments are 75:35 (super built-up area to carpet area).
In a single floor there is very little loading of common areas to the tune of
5-10 per cent.
Once you decide upon the locality, the next step is to check the developers who are
building there. The best way to do this is to do your own research. Find out who the
developers are and what they have to offer. Check out the floor plans and the types
of property that they are constructing. Many of these are available online so this can
be done at your convenience. Once you have shortlisted some properties, do your
own footwork. Check out the projects on-site. Get an expert such as a broker to show
you around. Sometimes what looks good on paper may not feel right when you see it
on the ground.
If the project is new, the choice of builder is a big decision. Check the builder’s track
record, his financial strength, his ability to deliver on time, construction quality and the
payment terms, especially in case of a local builder. Do a background check on
developers and make your assessment about where you would feel safe to make
your investment. One should always check with local real estate brokers the last
transaction price or the price of similar property in that location.
Negotiating Ability: After considering all the above, your negotiating ability is crucial
which means, leveraging the available information and a fair understanding of the
points discussed to strike a good deal.
The ‘area’ concept is very vaguely used in the housing industry. Some builders and
sellers take advantage of this ambiguity.
Carpet area is defined as the precise area within the walls of your home. If you had to
lay out a wall-to-wall carpet in your entire home, the area covered would be the
carpet area.
Built-up area is inclusive of not just the carpet area but also the area being occupied
by the walls of your home.
Super built-up area takes into account all the area under the common spaces which
is the apartments’ proportionate share of the lobby, staircase, elevator and the
corridor outside the apartment.
The confusion over super built-up area arises over what all is exactly included under
this definition according to the judgment of the builder. Some may even include the
terrace, security room, electrical room and/or pump room. The cumulative total of
these ‘extras’ is taken into account and divided by the number of apartments in
proportion to their size.
* If you get a quote for 1,000 sq ft, immediately find out if it is the carpet area or
super built-up area.
*There is no fixed ratio of super built-up to built-up or carpet area. Generally, the
ratios in multi-storey apartments are 75:35 (super built-up area to carpet area).
In a single floor there is very little loading of common areas to the tune of
5-10 per cent.
What to rent?
When you buy a property, the choice of locality is limited to those where properties
are available within your budget. But when you are looking at renting a property, your
canvas is much wider. Since a lessee has the option of seeking property that
matches all his/her requirements, it is always good to make a checklist.
Budget is always a prime consideration. Check your finances and see how much you
can allocate to rent. This should be an amount that you will be able to pay monthon-
month at the same time. Accommodate it within your house rent allowance
package or just a tad over for best results.
Now assess how big your accommodation should be. Remember that you have not
only to take up lodging, but also service it monthly, including the maintenance and
municipal charges which have to be paid by the lessee. The annual property taxes
and asset maintenance are the responsibility of the landlord.
Look that facilities such as public transport, security and daily grocery needs are easily
accessible. They make your stay more comfortable. Transport connectivity with
minimum traffic pressure points makes the daily commute to work less stressful. Look
for a neighbourhood where you have like-minded community so that there is
minimum clash of interests.
are available within your budget. But when you are looking at renting a property, your
canvas is much wider. Since a lessee has the option of seeking property that
matches all his/her requirements, it is always good to make a checklist.
Budget is always a prime consideration. Check your finances and see how much you
can allocate to rent. This should be an amount that you will be able to pay monthon-
month at the same time. Accommodate it within your house rent allowance
package or just a tad over for best results.
Now assess how big your accommodation should be. Remember that you have not
only to take up lodging, but also service it monthly, including the maintenance and
municipal charges which have to be paid by the lessee. The annual property taxes
and asset maintenance are the responsibility of the landlord.
Look that facilities such as public transport, security and daily grocery needs are easily
accessible. They make your stay more comfortable. Transport connectivity with
minimum traffic pressure points makes the daily commute to work less stressful. Look
for a neighbourhood where you have like-minded community so that there is
minimum clash of interests.
When is the best stage to buy?
If you have the required finances, ready-to-move-in is the ideal option for an enduser. This property would be significantly more expensive than at the launch stage but the buyer is protected against time and cost over-runs and also the EMI payment during the period when the house is under construction. For an investor who wants regular rental returns from his property investment, a readyto- move-in property brings in immediate rental income which even helps pay back the loan secured to buy the property.
If you are a new investor with limited finances, look for an under-construction property with a suitable payment plan and keep a horizon of 2-3 years for possession. But make sure you go for a reputed builder.
When you purchase a house at the pre-launch or launch stage, the buyer pays small sums linked to the progress of construction but also has a longer wait period before the asset is liveable or starts paying for itself. This option is good in new and evolving growth areas on the peripheries of cities where infrastructure itself is under development and there is a wait period before it is liveable. Since, both infrastructure
and housing are being developed at the same time, the user gets the advantage of moving in when both are ready. It also comes cheaper as property values are always lower when the infrastructure in the area is under development. The downside of this type of property is that possession will happen only after a minimum of 24-36 months.
During this period you would have to shell out a monthly rental for the place of stay and the EMIs for the new property.
If you are a new investor with limited finances, look for an under-construction property with a suitable payment plan and keep a horizon of 2-3 years for possession. But make sure you go for a reputed builder.
When you purchase a house at the pre-launch or launch stage, the buyer pays small sums linked to the progress of construction but also has a longer wait period before the asset is liveable or starts paying for itself. This option is good in new and evolving growth areas on the peripheries of cities where infrastructure itself is under development and there is a wait period before it is liveable. Since, both infrastructure
and housing are being developed at the same time, the user gets the advantage of moving in when both are ready. It also comes cheaper as property values are always lower when the infrastructure in the area is under development. The downside of this type of property is that possession will happen only after a minimum of 24-36 months.
During this period you would have to shell out a monthly rental for the place of stay and the EMIs for the new property.
Where to buy?
Generally, there is a price differential between different locations which will always be proportionate to its strategic placement which could be linked to accessibility to highways, markets, business districts and overall livability. It is quite possible that a particular area has good infrastructure, access to markets and entertainment means but if it is loaded with existing and upcoming projects, the price rise in that area may
not be dramatic, but a gradual one. One may make an estimate of the number of available and proposed flats in an area through good brokers and ascertain the past price movement in the short term. Things to be kept in mind while finalizing the location for your house:
* The location should be within approved/sanctioned master plan.
* The location should have good connectivity.
* Infrastructure services such as power, water supply, drainage and sewerage should
be present.
* Location should be within an active business activity such as educational
institutions, hospitals, IT parks, entertainment hubs, etc.
* Location should be accessible easily from your workplace.
not be dramatic, but a gradual one. One may make an estimate of the number of available and proposed flats in an area through good brokers and ascertain the past price movement in the short term. Things to be kept in mind while finalizing the location for your house:
* The location should be within approved/sanctioned master plan.
* The location should have good connectivity.
* Infrastructure services such as power, water supply, drainage and sewerage should
be present.
* Location should be within an active business activity such as educational
institutions, hospitals, IT parks, entertainment hubs, etc.
* Location should be accessible easily from your workplace.
Single-floor Units Vs Multi-storey Apartments
A single floor apartment is one where the builder buys a piece of land, often old plots which are up for redevelopment, constructs flats on each floor according to the permissible Floor Area Ratio (FAR)
and building byelaws and sells them as independent units within the same building. The land belongs
proportionately to all the buyers of single floors. Since there are smaller numbers of units than in a multistorey
apartment, these lack economies of scale and so have fewer common facilities such as maintenance and back-ups compared to larger multi-storey apartments. But these are newer apartment units in downtown or preferred areas and come at a price lower than multi-storey units.
A multi-storey remains the most preferred housing unit in metros and large cities today. It is a cluster of apartments in a high-rise building developed in a plot with all amenities available within a gated community. These units can be aggregated and constructed by developers or in the cooperative mode as Cooperative Group Housing Societies (CGHS). These need good common facilities management to take care of aggregating services and providing them to individual units for a fee. This fee is levied as monthly maintenance charges. They cover water and power supply, including back-ups, lift and common area maintenance and landscaping. Many developments also provide plumbing and electrical services for a fee.
and building byelaws and sells them as independent units within the same building. The land belongs
proportionately to all the buyers of single floors. Since there are smaller numbers of units than in a multistorey
apartment, these lack economies of scale and so have fewer common facilities such as maintenance and back-ups compared to larger multi-storey apartments. But these are newer apartment units in downtown or preferred areas and come at a price lower than multi-storey units.
A multi-storey remains the most preferred housing unit in metros and large cities today. It is a cluster of apartments in a high-rise building developed in a plot with all amenities available within a gated community. These units can be aggregated and constructed by developers or in the cooperative mode as Cooperative Group Housing Societies (CGHS). These need good common facilities management to take care of aggregating services and providing them to individual units for a fee. This fee is levied as monthly maintenance charges. They cover water and power supply, including back-ups, lift and common area maintenance and landscaping. Many developments also provide plumbing and electrical services for a fee.
Independent plot or apartment within a gated community?
Gated Community is a form of residential complex, sometimes characterised by high walls and fences. It boasts of controlled entrances, surveillance of those entering the premises, clean surroundings and amenities. These communities offer freedom from the hassles of everyday civic problems, ranging from water cuts and pebble-strewn streets to living with the stench of unpicked garbage cans. An apartment in a gated
community by a reputed developer is normally a safe bet.
An independent house, on the other hand, is normally customised to the buyer’s requirements. The advantage of having an independent house is that it provides ample open space and clutter-free living. Whatever the choice, make sure you pre-determine who is to look after the common facilities such as roads, water and power supply and back-ups etc. There are some developments where villas or townhouses are
provided within the gated complex with all the advantages that normally come with apartments. These are more expensive but safer and hassle free. You should however, be prepared to pay enhanced maintenance charges for these facilities.
community by a reputed developer is normally a safe bet.
An independent house, on the other hand, is normally customised to the buyer’s requirements. The advantage of having an independent house is that it provides ample open space and clutter-free living. Whatever the choice, make sure you pre-determine who is to look after the common facilities such as roads, water and power supply and back-ups etc. There are some developments where villas or townhouses are
provided within the gated complex with all the advantages that normally come with apartments. These are more expensive but safer and hassle free. You should however, be prepared to pay enhanced maintenance charges for these facilities.
Plot Vs Multi-storey?
In India, plots are much in demand. Even today most small cities are witnessing more demand for plots than for apartments. Multi-storey apartments are becoming the norm in established urban areas where cost of and and the convenience and security that apartments offer have pushed demand from the younger generation. also, as family sizes become smaller, many are selling large plotted developments in established city areas for smaller more compact apartments with centrally managed facilities, normally in gated communities in the suburbs.
Real Estate : What to buy?
What to buy?
There are many residential formats to choose from - Residential plot, apartments,
single floors, independent houses and multi-storey flats. Given below is a
representation of how each type of property is represented city-wise on the
online portals. This is a representation of property in the top six cities.
Each type of property has its own advantages and disadvantages. Given below are
some comparisons made by experts on Open House, the consumers’ forum on
online Portals
There are many residential formats to choose from - Residential plot, apartments,
single floors, independent houses and multi-storey flats. Given below is a
representation of how each type of property is represented city-wise on the
online portals. This is a representation of property in the top six cities.
Each type of property has its own advantages and disadvantages. Given below are
some comparisons made by experts on Open House, the consumers’ forum on
online Portals
What makes more sense — Rent or Buy?
There is a simple way of judging whether to buy a property or whether you should
lease one. If you find a house that you would like to stay in, that is close to your
workplace or easily accessible from there, then buy it. But remember that the
Equated Monthly Instalment (EMI) on your property should not be over 40 per cent of
your monthly salary. That way you would be comfortable paying it back. You need
10-15 per cent of the cost as your personal contribution to the purchase, as banks do
not lend 100 per cent.
If you are paying a monthly rent that would constitute over 75 per cent of your EMI
please think in terms of buying. (Check out the MB Buy Vs Sell Calculator which can
serve as a broad indicator on whether you should lease or buy).
lease one. If you find a house that you would like to stay in, that is close to your
workplace or easily accessible from there, then buy it. But remember that the
Equated Monthly Instalment (EMI) on your property should not be over 40 per cent of
your monthly salary. That way you would be comfortable paying it back. You need
10-15 per cent of the cost as your personal contribution to the purchase, as banks do
not lend 100 per cent.
If you are paying a monthly rent that would constitute over 75 per cent of your EMI
please think in terms of buying. (Check out the MB Buy Vs Sell Calculator which can
serve as a broad indicator on whether you should lease or buy).
Real Estate : When to Buy?
Realty Check : The Need To Buy Property
The common dilemma that the consumer at our Open House forum poses is what is
the right time to buy? The ‘right’ time to buy your house is when you feel that you are
ready for the responsibility that comes along with buying a house. It is important to
consider the objectives of buying a house. Ask yourself why you want that house?
What really is the motivating factor when it comes to your decision to buy that house?
Do you want to buy it because you want to live in it with your family or do you look for
an extra income that the house will bring in the form of rent? Or, are you simply
buying it for long-term value leverage? The more you know about why you should buy
a home, the more focused your search will be and the better you will be able to
select one that meets your requirements.
The common dilemma that the consumer at our Open House forum poses is what is
the right time to buy? The ‘right’ time to buy your house is when you feel that you are
ready for the responsibility that comes along with buying a house. It is important to
consider the objectives of buying a house. Ask yourself why you want that house?
What really is the motivating factor when it comes to your decision to buy that house?
Do you want to buy it because you want to live in it with your family or do you look for
an extra income that the house will bring in the form of rent? Or, are you simply
buying it for long-term value leverage? The more you know about why you should buy
a home, the more focused your search will be and the better you will be able to
select one that meets your requirements.
While buying a house the top questions
While buying a house the top questions to keep in mind are:
* When to Buy?
* What to Buy?
* Where to Buy?
* How to Buy?
* How much to pay for it?
* Which locality to buy in?
* What type of property to buy?
* How to extract maximum return from your property investment?
* When to Buy?
* What to Buy?
* Where to Buy?
* How to Buy?
* How much to pay for it?
* Which locality to buy in?
* What type of property to buy?
* How to extract maximum return from your property investment?
What are the things to actually look for : Real Estate
when zeroing-in on a house?
Budget, location, type of property, objective of buying and choice of property are the determining factors for purchase of property from an end user’s perspective. Real estate values are governed by demand and supply. This may vary on a project to project basis. The projects which see good demand normally do not see a price correction.
Budget, location, type of property, objective of buying and choice of property are the determining factors for purchase of property from an end user’s perspective. Real estate values are governed by demand and supply. This may vary on a project to project basis. The projects which see good demand normally do not see a price correction.
Developers : Realestate
Developers
If you have strong preference for which developer you would like to go with, track the projects he has come up with in different locations and choose the one best for you.
If you have strong preference for which developer you would like to go with, track the projects he has come up with in different locations and choose the one best for you.
Brokers: Realestate
Brokers:
Many cities are broker dominated. They work as agents for specific developers or projects or both and are able to suggest options across different corridors. They also offer 1-4 per cent discount which they
aggregate from developers as part of the agent activity. They are also able to suggest second-sale options in areas of your choice and your budget. However, India does not have a system of registration and rating of brokers and it is best to use a broker who has earlier given good service to someone known to you. You can also use online services of portals to find the brokers operating in that locality or neighbourhood.
Many cities are broker dominated. They work as agents for specific developers or projects or both and are able to suggest options across different corridors. They also offer 1-4 per cent discount which they
aggregate from developers as part of the agent activity. They are also able to suggest second-sale options in areas of your choice and your budget. However, India does not have a system of registration and rating of brokers and it is best to use a broker who has earlier given good service to someone known to you. You can also use online services of portals to find the brokers operating in that locality or neighbourhood.
Newspaper Supplements: Real Estate
These give property related information and also carry advertisements of property
launches. Once you have made up your mind to buy property, it is useful to regularly check out
advertisements. This helps you understand which locations offer new properties, what are the amenities
offered and also future infrastructure such as metro links, new transport corridors etc.
launches. Once you have made up your mind to buy property, it is useful to regularly check out
advertisements. This helps you understand which locations offer new properties, what are the amenities
offered and also future infrastructure such as metro links, new transport corridors etc.
Online Options : Real Estate
Online Options: Statistics show that over 80 per cent of property searches today begin online even if actual
transactions conclude offline. The advantage of looking online is that property portals aggregate the range of properties in the market and allow you to search for options on the basis of city, location, developer or even price brackets. Use the search box to fill in the details of your requirements. You get a drop-down of the properties that are actively available in your range. It also gives you contact details of those who have posted the properties.
Online searches also allow you to compare different properties on different parameters. This makes it easier to shortlist the properties. Also, check out floor plans, building schedules as well as walk throughs so that you only need to physically visit those properties that meet your criteria.
Online Portals also allows you to post queries on Open House and get them answered by experts. This
gives you access to experts that you would otherwise not have. Check out the property advice section which
offers advice on various issues from a number of experts.
transactions conclude offline. The advantage of looking online is that property portals aggregate the range of properties in the market and allow you to search for options on the basis of city, location, developer or even price brackets. Use the search box to fill in the details of your requirements. You get a drop-down of the properties that are actively available in your range. It also gives you contact details of those who have posted the properties.
Online searches also allow you to compare different properties on different parameters. This makes it easier to shortlist the properties. Also, check out floor plans, building schedules as well as walk throughs so that you only need to physically visit those properties that meet your criteria.
Online Portals also allows you to post queries on Open House and get them answered by experts. This
gives you access to experts that you would otherwise not have. Check out the property advice section which
offers advice on various issues from a number of experts.
Looking for the right property
Looking for the right property
There are many ways of looking for a property. This includes:
* Checking out the options available online in property portals
* Check out print ads that appear in newspapers and magazines.
* Use brokers in the neighbourhood who will be able to advise you on various options.
* Choose a developer and see what he has to offer.
There are many ways of looking for a property. This includes:
* Checking out the options available online in property portals
* Check out print ads that appear in newspapers and magazines.
* Use brokers in the neighbourhood who will be able to advise you on various options.
* Choose a developer and see what he has to offer.
Real Estate : Investors
Real Estate Investors:
This category of buyer purchases property primarily as a means to grow money. Here too, there are
multiple options:
property that is 24-36 months away from possession but you get the best rates for this. Going by the track record of the past few years, the risk is that your project may be delayed and possession comes after another year or two. This makes a difference to those who wish to remain invested to the end and exit the project only once possession is taken and property values have correspondingly risen. There are some investors who purchase by paying a 10 per cent value and then pay a subsequent second and
third instalment and then encash the differential. This money can then be invested in another project that has
been launched and so on. This type of investor books short-term profits. This is a high-risk-high-return game and the buyer needs to be very aware of the progress of the project and the market values. Currently, there are no formal sources of monitoring the value of property on a weekly basis. Local brokers are the best source.
but the flip side is that you will be sure when you get possession.
values are at least 25 per cent higher than while it is under construction but there is no risk as the property is
ready-to-move-into or for fit-outs.
This category of buyer purchases property primarily as a means to grow money. Here too, there are
multiple options:
At launch:
You get the best values and even an inaugural discount in many cases. You are investing in aproperty that is 24-36 months away from possession but you get the best rates for this. Going by the track record of the past few years, the risk is that your project may be delayed and possession comes after another year or two. This makes a difference to those who wish to remain invested to the end and exit the project only once possession is taken and property values have correspondingly risen. There are some investors who purchase by paying a 10 per cent value and then pay a subsequent second and
third instalment and then encash the differential. This money can then be invested in another project that has
been launched and so on. This type of investor books short-term profits. This is a high-risk-high-return game and the buyer needs to be very aware of the progress of the project and the market values. Currently, there are no formal sources of monitoring the value of property on a weekly basis. Local brokers are the best source.
Semi-Constructed:
Buy a semi-constructed property in a locality that you want to stay in. This will shorten the lifecycle of twin payments (rental and EMI). You have to pay a slightly higher value than if you pick up at launchbut the flip side is that you will be sure when you get possession.
At Possession:
Alternatively, you may want to opt for one that has already reached the possession stage. Here, thevalues are at least 25 per cent higher than while it is under construction but there is no risk as the property is
ready-to-move-into or for fit-outs.
Real Estate : End Users
End Users:
Check out MagicBricks Neighbourhoods.
time, whether the past users are happy with the quality of construction and services, who will manage the property in the long term and whether the developer is part of a network such as CREDAI which brings in a little more accountability to his profile.
it difficult to meet the EMIs. (Check out our chapter on Managing Finance).
Locality profile:
If you are buying for self use, it has to be where you would like to stay in the long term. The profile of other buyers and the neighbourhood, facilities and amenities that come with it, future infrastructure projects in the area, transport connectivity and state of roads are all issues you would want to find out before you buy. Each of these affect the quality of your stay and also determines the price that you have to pay. If you are buying for future use, you will be able to compute the profile of the neighbourhood into the future.Check out MagicBricks Neighbourhoods.
Stage of construction:
A new property can be purchased at three stages – At launch, mid-way through construction and at the possession stage. Old properties can be purchased either in as-is condition, requiring maintenance and repair before use or renovated or redeveloped and ready-to-use. If you are currently staying in a rented accommodation, you may want to invest in a property that is ready for possession soon or you will have the burden of the rental outflow as well as the EMI on your housing loan.Buying closer to possession entails a higher value than at launch but being an end user balance the pros and cons.
Developer:
You need to check out the past track record of the developer. If he has been giving possession ontime, whether the past users are happy with the quality of construction and services, who will manage the property in the long term and whether the developer is part of a network such as CREDAI which brings in a little more accountability to his profile.
Price Bracket:
Your monthly EMI should not exceed 40 per cent of your monthly pay packet or you will findit difficult to meet the EMIs. (Check out our chapter on Managing Finance).
Introduction : Searching/Short listing a house
Buying a house can be tedious or pleasurable according to how you go about it. Here are a few tips to make it a pleasurable activity. To make sure you find the right property at the right price in the right location, there is no getting away from the fact that you need lots of information at your fingertips and a lot of options to choose from as well.
Firstly, make sure you know why you are buying. Normally property buyers fall into two major categories:
1 End Users
2 Investors
Being sure why you are buying also influences various choices you make. This includes choosing:
*The location
*The stage of construction
*The developer
*The price bracket
There are no right and wrong decisions – whatever your reason for buying a house, it is the right one. But there can be right and wrong ways of going about it.
Firstly, make sure you know why you are buying. Normally property buyers fall into two major categories:
1 End Users
2 Investors
Being sure why you are buying also influences various choices you make. This includes choosing:
*The location
*The stage of construction
*The developer
*The price bracket
There are no right and wrong decisions – whatever your reason for buying a house, it is the right one. But there can be right and wrong ways of going about it.
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