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- Cautions about buying in haste
Dussehra and Diwali aren’t just the season for Durga pooja, laddoos, and Ram Lila. Its also the time when the maximum number of new real estate projects get launched.
Developers use this season to their advantage because they know that you will be most keen to make a real estate investment during these auspicious days.
But don’t rush in blindly just because you want to buy something before this holy time period finishes. Here are 5 tips that you must keep in mind before you buy property this festive season.
But first, here is a preface to the current environment in real estate. Many developers are still in a financially weak condition. The situation in the market is still a little fragile.
Just because the stock market is going up does not mean that normal conditions have returned to the real estate sector as well. So, please keep this background in mind as you think about the following 5 tips.
1) Choose your builder wisely: The real estate sector, globally and in India, is notorious for developers who take investors’ money and then run away. Make sure that you go with a reputed builder who has been developing properties for a while and has had an operating history.
Don’t just go with any builder, it might be worth paying a premium to go with someone who has built their reputation over a few decades.
If you have not heard of your developer, always ask your developer what properties they have developed, and if possible speak to customers who bought properties at these developments to learn from their experience.
2) Ask for a construction-linked payment plan: As discussed, the financial conditions of various developers are still not totally safe. So, rather than give them money at their will, ask for a construction-linked payment plan.
This way you know that your installments are actually going towards financing the development, rather than being used for other unknown purposes. Beware of time-linked payment plans, and if you have the option stay away from such plans.
3) Penalties for delays: As it happens, many if not most of the projects launched last Diwali have not even seen construction begin. Yet, many customers have paid their installments on time with nothing to show for.
Understand what rights you have in case of delays. Ask for a definitive date for when construction should begin.
If you are dealing with a small builder, that does not have a long operating history, make sure that the contract gives you adequate protection against the builder just sitting on your money and delaying the project’s completion.
4) Location: Don’t be in a rush to buy property just because the price looks tempting, and its an auspicious time to buy property during the festive season. Recognize that the single most important factor in buying real estate is usually the location of the property.
Can you see yourself living there, or someone renting this property? Is it close to civic amenities and is the planned connectivity convenient?
5) Don’t buy to flip: Don’t assume that you will easily be able to flip your property to another buyer for a premium just on the back of paying your booking amount and some installments.
In the near-term, there could be an over supply of apartments. Also, keep in mind that there are 1000s of other people who are already sitting on apartments where they want to sell them.
Buy a property if it makes economic sense for you as an investment, or as a residential home. Don’t gamble.CommentQuote0Flag
- Buy a own house
Buy a own house if you are living in a rented house.
For a gross salary of Rs.10 Lacs per annum a Home of Rs.40 Lacs is very affordable. Rs.40 Lac homes and apartments are available in OMR, GST, Ambattur etc where most of the jobs are shifting.
By the time your gross salary increases to Rs.15 lacs per annum, even price of same property will rise to Rs.60 lacs.
So why wait, buying now is better then paying higher EMIs later.CommentQuote0Flag