Property investment is regarded as one of the most secure and profitable investment option. Properties such as land, buildings and homes are limited commodities and their value always keeps appreciating. You can also earn rental income from your property. However, before you rush to invest in property, it’s necessary that you analyze each and every aspect of your decision. This is especially true if you are investing in property for the first time. To help you get a good deal, here are the 10 best tips for property investment for beginners.
Choose the right location: You need to buy property in an area that can give you good returns in the next 5-10 years. Property boom in cities generally occurs in areas neighboring the city’s key business district. Properties are also in huge demand around SEZ, IT Parks and other commercial hubs. Locations that have been selected under the Smart Cities Mission or locations near to metro stations and new/upcoming airports can also be considered for property investment.
Choose the right project/builder: Even though property buyers are now protected by RERA, it would be good to choose a reputable builder. There are always loopholes that can be exploited by unscrupulous builders. For example, the builder might use substandard material, which would affect the quality of construction. Your property may work for the time of warranty, but if the quality is not good, you will find it difficult to sell it.
Don’t be fixated on the sample flat: It’s true that a sample flat gives a good idea of how the property will come up. However, you need not take the decision based entirely on how the sample flat looks. It is possible that the sample flat may have been furnished in a way to make it look more attractive. You should focus more on other things such as carpet area, placement of rooms, design, etc.
Negotiate: Whichever project you are visiting, always ensure that you bargain for some discounts. In most projects, there’s always the possibility of getting discounts of up to 10 percent. If needed, talk about the offers being made by other builders in the area. This will put additional pressure on the salesperson and they may give you a good deal.
Verify project approvals: Ensure that the project has all the approvals. Don’t just believe what the salesperson might say; rather, ask them to provide copies of all the approvals. You will need these anyways when applying for your home loan. Your home loan provider will also check the authenticity of the approval documents. This way, the chances of misrepresentation or misinformation will be reduced significantly.
Don’t invest your savings: Excluding the down payment and other initial expenses, you should not invest your savings to buy a property. It’s always better to take a home loan, as it reduces your investment risk. You should give preference to loans that will not require you to pay EMIs until the project is completed.
Check your finances: Property investment can be profitable, but you should not invest beyond your means. It should not be like you and your family isstruggling to meet your monthly expenses. Check your finances before you invest in property. Make sure you have adequate funds for your home loan EMI, down payment, monthly expenses and emergency needs.
Consider buying property in your wife’s name: Many states offer a discount on stamp duty if the property is registered in wife’s name. Banks also offer a lower interest rate on home loans if the property is registered in wife’s name. If you register your property in your wife’s name, you could avail these benefits and reduce your overall investment burden.
Thoroughly check the property agreement: Before you sign the property agreement, you need to check it thoroughly to ensure that there are no loopholes. The property agreement can run into several pages, so you can ask for a copy and read it carefully when you have time. If you are not sure about legal implications, you can hire a lawyer to vet the agreement for you.
Be patient: There may be times when the value or rental yield of your property may stagnate. However, this should not make you anxious, as price fluctuations are normal in property markets. You should keep invested and aim for long-term gains. Taking a hasty decision to sell your property is not recommended. Be patient and wait for the right exit opportunity to secure optimal returns on your property investment.
When investing in property, always take your time to evaluate the various factors that can impact your investment. Explore the projects that you have shortlisted and have a look at the neighboring areas. Check the development projects being planned in the area and the presence of negative factorssuch as slums, polluting industries, unauthorized constructions, etc. These will give you a fair idea about how the locality will take shape in the next 5-10 years. If things look good and there are no negative factors, you can go ahead and book your property.