Purchasing property needs careful planning and extensive research as it is a significant financial commitment and even a small mistake can prove costly. Here’s a list of factors that you should evaluate before investing in real estate:
❖ Location & Connectivity: A property’s location determines its rental demand, resale value and potential for value appreciation. Its price and demand are also affected by its proximity to schools, hospitals, employment hubs, public transport; road connectivity, and upcoming infrastructure projects and planned commercial developments in its vicinity.
❖ Legal Due Diligence: The property should have a clear and marketable title. The sale deed, the encumbrance certificate, land records, and applicable tax documents need to be checked carefully for disputes, outstanding loans or ownership complications. Check the RERA registration of an under-construction project on the concerned state authority’s website.
❖ Developer’s Reputation: Assess the delivery timelines and construction quality of past projects, financial stability, customer feedback and overall market reputation of the developer - they offer insights into the quality of the property and the likelihood of timely delivery.
❖ Property Condition & Approvals: Check a property’s structural condition, its plumbing, electrical systems, ventilation and how it is maintained. It is important to ensure that it has an approved building plan, a commencement certificate, an occupancy certificate, completion certificate and the required fire safety and environmental approval.
{{/usCountry}}❖ Property Condition & Approvals: Check a property’s structural condition, its plumbing, electrical systems, ventilation and how it is maintained. It is important to ensure that it has an approved building plan, a commencement certificate, an occupancy certificate, completion certificate and the required fire safety and environmental approval.
{{/usCountry}}❖ Total Cost of Investment: Ensure that your calculation of the total cost of investment includes hidden costs such as stamp duty, registration charges, brokerage, maintenance deposits, parking fees, floor rise charges, GST, utility connection fees and even the potential renovation costs. If taking a loan, consider the processing fees and interest payments while calculating the total cost.
❖ Rental Yield & Appreciation Potential: Rental Yield helps determine the income potential of a property and is affected by prevailing rents, tenant demand, vacancy rates and maintenance charges. For estimating long-term appreciation potential, research local price trends, ongoing and upcoming infrastructure development and demand-supply conditions.
❖ Liquidity & Exit Options: Real estate has a long investment horizon and selling it takes considerable time. Check the resale demand, availability of prospective buyers and current market conditions in your chosen micro-market. Also, consider if you can afford to hold the property longer than planned if market conditions are unfeasible for exit.
❖ Investment Goals & Affordability: Invest according to your investment objective - generating rental income, capital appreciation, personal use or portfolio diversification - and budget. Do not stretch your finances - it is important to maintain sufficient liquidity for unexpected expenses.
Investing in property usually requires a substantial amount of capital, extensive due diligence and paperwork and day-to-day property management. Alt DRX, a digital real estate platform, offers investors an alternative - expertly-selected investment opportunities in professionally-managed premium real estate assets across India, starting at Rs. 10,000. It is a comparatively passive investment experience and makes investing in real estate more accessible to everyday investors.
Note to the reader: This article has been produced on behalf of the brand by HT Brand Studio and does not have journalistic/editorial involvement of Hindustan Times.