Property investment in India is popularly thought to be a safe and profitable long-term investment option. It has always been more reliable than investing in stocks. However, the market does face liquidity and other risks from time to time.
To avoid such risks involved in the property market as an investment, one must remember the following tips before finalising on any property:
Selection of property
- For a property investment in India selecting the right property at the right place as per the budget is very crucial.
- There is a surplus of choices available in the market, so one must decide as per his/her requirement rather than get swayed by any market gimmicks. Pick a property that is according to the budget and in a preferred location.
- Researching and reading well on the means of buying is equally essential. Researching is important because it will eventually lead one to his/her desired property, and while researching, consulting a broker, online or directly through the builder before finalising the purchase makes the deal even better.
- Before shortlisting the property one wants to opt for, a thorough check on the builder’s track record/his credibility is also a must. It can be done through reviews on real estate portals or talking to friends and relatives who have invested before and via actual site visits.
Financial considerations while investing in property in India
- If one is taking a loan, then one must get the loan eligibility checked from the respective bank even before searching for a property in India. This is important to get the required loan amount sanctioned. It will also ease the process of approval and will give the confidence about one’s worthiness in the market.
- While investing in property in India, it is suggested to the investors that they get their credit report extracted from Credit Information Bureau (India) Ltd. It is a necessary procedure especially when one is applying for a home loan. A good CIBIL score helps in arranging for better interest rates for the loan sought. It would also help in saving other charges levied by the banks and even get a speedy sanction of the loan, saving a lot of hassles, paperwork and time.
- Other than your eligibility for a loan, one must check for internal and external quality of construction of the Property, all legal paperwork from the builder and layout plan of the project. Carefully reading the Booking form and Sale Agreement before signing is a must as some of the clauses could be in favour of the builder.
- Investment in property in India is unlike investing in share market or equities or mutual funds wherein one can spend a short time and accumulate profits. Investing in estate requires an investment of at least five years as the rates of property rise or drop due to the social, civic and road development in the neighbouring area factors.
- Lastly consulting a lawyer or professional for the Agreement of a sale plays an important role. One must take help from a chartered accountant or lawyer.
- Unless one is an expert, the nuances or clauses mentioned in the Sale Agreement might get missed. A lawyer or CA can explain the needs and importance of documents needed to cross check before closing the deal.
- Legal intervention is thus necessary in case the other party is not abiding by the laws or trying to fool you.
- A lawyer also helps the consumer understand the nitty and gritty of various terms and market concepts along with the risks.
- Property investment in India is still an unorganised sector, and many consumers might be helped to a great extent if they do thorough research before buying a property.