Buying a property is one of the wisest decisions that can be taken in the current years as the Indian realty sector is on a path to revival and why not, you can also save a huge amount of tax depending on the type of property you have bought. There are hundreds of real estate builders (both large-scale and small-scale) who build apartments, villas, gated communities, penthouses, studio flats and more for customers depending on their financial caliber. Besides the financial status, there are also many other factors that a buyer needs to consider before making investment in a property.
If considered all the factors wisely and chosen smartly, buying a property can be a good expense and a great investment. On a regular basis, we buy a lot of stuff, but it is one of the most difficult choices when we consider buying a property. There are many factors and components that must be considered and measured cleverly before we buy a house. When you are buying a new house, it can be exciting and overwhelming at the same time. For a novice buyer, it is common to get caught up in the anticipation of a new home, but with a huge investment (which might involve a chunk of your savings), you don’t want to miss out on many factor and fine details.
Here is a checklist of factors that will determine your right property purchase.
Measure your finances
Considering your finances is very important when you are thinking to invest in a property.
Is your income stable?
Are you working as a full-time salaried employer? Or do you have a business? Is your company paying you well enough? Do you have some perks like earning extra commissions and bonuses? How is your business doing? Is it stable enough? Are you making lots of money? Are you planning to expand your business or is your business promising enough that it will earn some extra profit in the next six months? Do you think that you will be promoted with a better pay that will be enough to pay off the monthly EMIs? If the answer to all these questions is ‘YES’ based on what your mode of income is, then you may be in a position to invest in a property. But if you are unsure of how your income is going to fare in the recent future years, then taking up a mortgage is definitely not a very bright idea. Wait for a few months, calculate your earnings, make ways for a stable income or build up your savings a bit more that you are sure that you can pay off your mortgage.
What’s your credit score?
The Credit Score, also known as the CIBIL score in India is a very important factor that you must keep in mind if you are considering taking a home loan to payoff for your property. You must always be up-to-date with your credit payments to maintain your score of 700 or above and qualify for a home loan. A CIBIL score ranges between 300-900 and the closer your score is towards 900, the easier it is for you to get your loan approved. However 700 is considered a benchmark by any financial institution as a preferred CIBIL score. Therefore maintaining a high CIBIL score is important for hassle-free approval of home loan.
Debt : Income
This percentage measures how your monthly income will be divided by your fixed monthly expenses like home loan EMI, car loan EMI, monthly bills, mutual funds or other investments. This also calculates how much amount you will be left with after you may paid you fixed monthly expenses (as per bank standards, the maximum limit is 40% – 50% of your salary).
Set your budget right
Don’t miscalculate your budget. After the price of the apartment with the amenities added, you must add another extra 10 – 15 lakhs for registration fee, service tax, stamp duty, maintenance, etc. which may not be covered by your home loan and you have to shell out these incurring costs from your pocket.
Another very important factor when you are considering buying a house is checking the location and the neighbourhood. These days most residential projects have a walk-to-work concept which means that the property is located in close vicinity to IT parks and offices. However, location of the property is not just important for easy commuting access to offices, schools, hospitals or shopping malls; but a prime location closer to any major infrastructural development or commercial projects will appreciate the price of the property with time. You can therefore earn a good amount of profit on resale.
Is the project RERA-approved?
This is an important thing to consider when you are buying a property. So you must be mindful of the fact that the project you are buying is RERA-approved (if the builder has taken the approval after Jan 2017).
The RERA is implemented towards the benefit of the consumers:
- Ensures transparency and prevents fraud and delays
- Ensures accountability and interest of buyers
- Imposing some responsibilities on both the sellers and the buyers
- Establish a symmetry of information between sellers and buyers
- Promote a good governance in the real estate sector that will improve the confidence and trust of the investors
As per RERA, you will also be able to demand a compensation if your builder is unable to transfer ownership/proprietorship of the apartment within the stipulated time.
RERA Act is fully functional in Telangana and the real estate buildings and projects approved from January 1, 2017 must be registered with RERA. Be aware of such registrations and permissions that has been implemented and might be implemented in the future.
You definitely don’t want to invest in a house that is going to come crashing down in 10-15 years. These days, most of the real estate builders are quite transparent about the building materials used in the project. Also if the builder is a reputed one, then you have nothing to worry about. Consider it all taken care of. In addition to these, you can also check customer reviews on social media or reviews of existing customers if the particular builder has worked on any past projects. These will help you choose your property wisely.
Area of the apartment
Now when you are going to buy an apartment, you might have heard the sales executive use words like carpet-area, built-up area and super built-up area. What you need to consider is the actual area of your apartment.
Carpet Area – This is the actual area of your apartment that is enclosed within the four walls
Built-up Area – This includes the carpet area in addition to the thickness of the outer walls (apartment walls) and the balcony
Super Built-up Area – This is the sum of the carpet area + built-up area + proportionate of the common areas of the residential complex like the swimming pool, the lift shaft and the stairs.
But the price that is mentioned depends on the super built-up area.
Read More: Advantages of living in a Gated Community
Green open space
The concept of open space in present day apartments is considered a luxury amenity and a much needed respite after a day at work. Nowadays, most gated community apartment projects are built over sprawling acres of land with a limited area dedicated to living while the rest of the pace is kept open with landscaped gardens, swimming pool, club house, walking paths and other recreational amenities. An open environment also allows kids to socialise and promote an active lifestyle.