Apartment or House -Property search

You have learned a lot about real estate investment and home loans in the previous blogs. the next step is how to purchase a home or flat.

Some employees must decide whether to rent or buy a flat in cities with large IT and manufacturing centres. Many people are in a dilemma about whether to rent or buy a flat.

Which is more profitable: Renting or Buying?

BUY or sell calculators can solve this question. These calculators are available on many property selling websites such as magicbricks.com. Even the most sophisticated calculators can’t give you the personal advice you need to solve such a problem. It is best to think through your problem carefully.

Everybody wants to own a home. However, keep in mind that you cannot buy in any city or area that is not within your budget. You may not want to buy if you need the convenience of living near your work or in a close place to family and friends. If the property prices are high in the area, purchasing may not be the best option. Rent is the best way to live.

SWOT analysis

Do a SWOT (Strength, Weakness and Opportunity) analysis to begin. First, location identification is a must and the type of house you desire. Next, determine the monthly payment you are comfortable making. Find a house you like, and that is within your budget.

One rule of thumb is that your monthly repayment/EMI should not exceed a third or more of your family’s income. This will ensure that you can pay it back. After all, you need enough money to cover your basic needs and to be able to save some while still maintaining your lifestyle. You should also have enough margin money to pay off your home loan if you buy. Before you decide to buy, address all the issues. Rent a house and save money for the down payment.

Let me show you an example. Let’s assume that you rent a flat for 10,000 per month. You can find a suitable flat for your needs, and the EMI will be approximately 25% more than your rental amount, i.e. You can afford to pay 2500 per month more for a suitable flat for your needs, and the EMI would be about 25% higher than your rental value.

 To be able to pay the initial outflow, you will need to change your lifestyle. This 25 per cent extra will become less of an issue over time due to annual salary increases. Remember that you will own the flat on making this decision.

How do you buy a property?

Follow the steps below to achieve this.

1. where should you buy/location selection

2 Shortlist property/selection house or flat.

3. Developers offer property purchasing plans.

4. Consider the impact of different taxes on Real Estate on your budget.

5. Bargaining in Real Estate.

6. Sale agreement

7. Register and possession. 

Note: A bank will never approve a loan for a home because they do all the due diligence on the seller and property before sanctioning. This helps to prevent fraud.

Location Identification

Price is an important starting point when you are looking to purchase a property. This is where your budget comes in. Your budget includes the amount of loan you take out from the bank and cash in hand (margin).
Begin with your budget and go to a website like Magicbricks.com or 99acres.com. You can enter your details in the search box to see various properties that meet your needs. You can choose the size and number of bedrooms you require, as well as the amenities that you desire, to see which areas are most suitable for your needs. Find out what you can afford. Next, find the best location for you within your budget. Premium locations in the downtown area will be more costly, so you’ll need to settle for smaller units that fit your budget. You will find larger units the further you go.

Price points

The price differential between locations will always be proportional to their strategic location. If the unit is near a bus stop/metro station or flyover, it will be more expensive than farther away. Good water quality, regular power supply, and easy access to transport services/ schools/hospitals/ malls/ entertainment centres influence the values of a property.
Although an area can have good infrastructure and easy access to markets, the price of a home in this area could rise gradually if there are many upcoming and existing residential projects. The gap between supply and demand will determine the price. There will be better chances of getting a deal if the supply is greater than the demand. If there is more demand than inventory, then it will be a seller’s marketplace. Sellers tend to hold value, and there is less scope for negotiation.

Role of  PROPERTY Agent

A good property agent can help you estimate the area’s number of houses/flats and the price movements in the near future. To assess the availability of properties for sale in your area, you can also go online to property portals. These are pointers to bear in mind when finalizing the location for your property.
Get a provisional letter from the bank to sanction your budget before you finalize it.
The master plan approved or sanctioned by the local development authorities should direct the location.
It must have excellent connectivity. There shouldn’t be any chronic problems like traffic jams within the micro-location or waterlogging during rains. Is the area well connected to major roads, metro stations/bus stops, highways and flyovers? You may lose value if your location is close to a station, but you are far from it by a busy U-turn. It would help if you considered the travel time to get to work and to the essential areas like schools, hospitals and markets. This is also important when purchasing a house.
It is important to have infrastructures such as power, water supply and drainage.