Factors to Consider Before Buying Property in India

The growing real estate market in India is going through a phase of diversity and profitability. The experience of investing in a home can be an overwhelming and tedious one. Buying property is a long-term commitment. The capital being invested is not a small one, and in many cases involves taking on the added liability of a loan. Weather the property being bought is a residential one or a commercial one, or weather it is meant for to live in or as an investment, the process is a long and detailed one. Thus, one must make such an investment only after extensive consideration and due diligence.

Of the numerous factors one must look into before some of the most essential ones are elaborated below.

Buying a home or investing?

The first consideration is to evaluate the purpose of your investment. Weather it is one meant pure long-term gains or to live in should be considered. For investments, one can be flexible in the location of investment. A remote or lesser-developed location has led to tremendous returns over time. Buying property means security. It is one of the few long-term investments meant for practical utility. But the fact that such an investment requires time to pay off good returns should always be borne in ones mind.

For a house that has been purchased to lived in, such a location might not be practical. In the latter case, one must consider proximity to workplace, commercial establishments, schools, hospitals, transportation, recreational establishments etc. A home should be in a safe and bankable area, with ample signs of development.

Does your intended type of property meet your budget?

The type of property that meets your needs could vary from a well furbished affordable 1 BHK flat in Mumbai with the right amenities to a villa with a garden in a gated community in Gurgaon with security and other world class comforts.  The availability of such properties in your desired location, while still being affordable and within your budget is to be carefully considered.

Location also matters while considering the budget. One must not only look at the cost of the property but also additional costs like the registration charges, brokerage fees (where applicable), stamp duty charges, building maintenance charges and subsequent renovation charges (if needed), additional parking costs etc. There are also possibilities of additional hidden costs.

Payment Plans?

There are multiple payment options available for property. Most cases require an initial down payment of about 85% of the total cost, followed by subsequent instalments. There are also a number of flexible plans available for the buyer.

Home loans are usually advised in property investments due to the amount of capital involved, as well as, the tax benefits and exemptions available. But one must consider taking a loan only after considering ones stable take home income.

What is the Return on Investment one is considering?

All sorts of property should result in price appreciation and increasing value, even if there is no plan to sell the property. The right location along with the right surrounding infrastructure will always provide good returns. One must always keep a close watch on the price trends, possible emerging micro markets and an insight into the future of market should be considered while making a decision to invest.

Future Considerations?

One must keep in mind one’s plans for the future while considering the time for investment. Weather changing careers, taking a sabbatical, planning to take on extensive travel, family planning or adding another educational degree, all the aspects should be taken into account before making the decision to invest.

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