Real estate is one of the most sought-after investment options for most people in India. Property buying can be a very exciting affair yet sometimes the experience can be nerve wrecking. Unlike other alternate investment portfolios, there is high capital value involved in purchasing it so one has to be very cautious before taking the plunge in real estate.
In our efforts to help the customers make an informed decision,Team Pushpganga identifies the six most important points to consider before buying a property in 2014.

Impact of the New Land Bill 

The much-touted Land Bill has finally come into force this New Year. Many ongoing projects including housing and industries will brace for an escalation in costs with this new law. The cost of land acquisition will increase by 3-3.5 times. For developers, the cost of land is going to increase significantly, impacting their project costs and therefore margins. However, in order to preserve their profits, we will see more joint development projects happening wherein the profits as well as the resources and the risks will be shared. Already in many Tier-1 cities joint development route is followed by developers. Going forward, this practice will spread all over.
Moreover, it is advisable to keep a close watch on the title of the property on which construction is taking place or has taken place (to ensure that it is free from any encumbrances and litigations), whether all statutory permissions have been obtained, in case of a ready property – i.e. newly constructed or a resale property, has a society being formed, is the builder listed or recognised by the housing finance company (in case one wants to avail a home loan facility) etc.
Therefore, in 2014, customers need to very watchful of the legal aspects of properties besides taking note about their affordability while buying any property.

Affordability

It goes without saying that budget is the key point to consider while buying any property. Every buyer has his/her budget fixed for investment which may vary at times. Grim economic scenario, rising inflation coupled with depreciating rupee in 2013 has in some-way affected several buyers affordability quotient in property investment.
Hence, it would be advisable in 2014 to go in for properties that offer affordability be it in terms of location or price. Our research points out that builders are today cashing on this hype of ‘affordability’ and are significantly launching projects in more affordable locations with lower ticket price. Local government authorities are also, in a way, trying to promote development on the outskirts or the peripheries of cities where property is still cheaper and, above all, affordable for many. Pushpganga advises people this year to be careful while buying property in few far-flung areas as these may seem attractive due to low prices but may not be liveable because of lack of basic infrastructure.

Choose the right Location for Higher Gains

Selecting the right property at the right location is one of the most crucial and difficult aspect of property investments. Unlike earlier, today’s customer is spoilt for choices. There is ample supply in the market along with a wide spectrum of choices making the conditions extremely favourable for buyers. But, too many options at times leads to confusion. Team Pushpganga points out factors that one must consider before zeroing in on a property.

Infrastructure Development: Location of the property is of prime importance in property buying. But to select the right location one must consider the physical and social infrastructure present in any given area as it will play a significant role in determining the property prices. One must carefully look for various infrastructure development projects in any given area as it will accelerate the property prices. A location with good infrastructure projects in close vicinity will yield better and higher returns. Presence of physical infrastructure like fly-overs, industries, roads, railways, airport, defence investments, water, electricity, sewage etc. will give better returns. Social infrastructure like education, healthcare or entertainment also accelerates prices. For instance in Pune, localities close to metro stations will yield better returns. Various Phases of Metro project are nearing completion.
To conclude, it is advisable that in 2014 customers opt for locations where they can at least see some physical infrastructure activity happening. People must shy away from areas where infrastructure development is simply proposed and no activity has yet started.

Good Builder: After selecting the right location, based on ones budget, one must choose the right builder for property investments. One must analyse the builders previous track record, whether he completed his past projects as per schedule, construction quality etc. One may also visit other sites developed by the same builder in order to check whether he has fulfilled all promises made. Above all, completion of the property at the right time is of prime importance and one must keep a check on it. Hence, in 2014, property buyers must go in with good builders who can complete the project on time.

Marketing Gimmicks: Another point to consider is that one must be careful of the several marketing gimmicks adopted by builders today. Audi's and Mercedes are being offered with apartments. Buyers must analyse and study the property in detail.

Where to park your money – Land or apartments?

Residential real estate today comprises of more than just plots and apartments. There are villas, villaments, row houses etc. But if we look on a broader spectrum then one is often confused between a piece of land or an apartment. For investment in 2014, Team Pushpganga advises people to opt for apartments within the city limits over land on the outskirts. In the present scenario, land within the city limits is very expensive and unaffordable for many. In a specific budget one can get a decent apartment within the city limit while if he opts for land then he will have to move towards the outskirts. Moreover, apartments will fetch a decent rental income provided it is in a good location. Needless to say, there will be no rental income in case of a plot. Additionally, apartments give dividends as well as capital gains while plots only give capital gains. If someone wants to offset some of the EMI burden then too apartments should be the choice. However, appreciation in plots is much more than apartments over a long term. Today, there are even newer developments like studio apartments, villa apartments etc. that address various needs and budgets as well.

Property Finance

Financing is the most critical aspect of buying a property. While some opt for self-finance, a majority of buyers today opt for home loans. The hike in repo rate by the RBI in 2013 had its direct impact on the home loan rates. High home loan interest rates were a deterrent to many buyers and in a way weakened their sentiments. However in 2014, it will be interesting to watch the policies of RBI and its impact on the sector.
Team Pushpganga advises property seekers in 2014 to keep away from improper practices followed by builders. Unlike most Grade A builders, smaller ones may ask buyers to pay a part of their total purchase in cash but one must refrain from it. This will not only help one to register property purchase at the value they actually paid but will also let one optimize tax benefits offered. This apart, the source of finance also matters for availing tax benefits. For example, repayment of principal would be allowed as a deduction from taxable income only if the loan is taken from notified institutions and banks. Further, whenever possible applying for loan and buying property in joint name may allow you to optimize tax benefits.

Right Time to Buy Property

Year 2013 was one of mixed emotions wherein some people went ahead with their decisions and invested in property. While, on the other hand, many thought to wait and watch. In some sense, India’s real estate market will continue to be slightly muted during early 2014 as home buyers and office occupiers will stay cautious due to the economic uncertainties. But there will be a gradual revival in demand in the second half of 2014 following the general elections due by May.
Moreover, Team Pushpganga advises home buyers, who are buying a house for end-use, to go ahead with their decision without waiting any further because all through 2014 time will be good to invest (assuming that one has assessed his affordability). However, it is known that real estate is a mid to long term investment. For those who are buying with the hope to get back good returns in a short span (of about 1-2 years) it doesn't really matter investing in real estate in the present scenario. For those who are looking at returns over mid to longer time period must go ahead with their decision to invest this year.
For long-term investors there is high risk in pre-launch properties. But if one wants to opt for it in order to get higher profit margins then he must look for good builders with a good track record. For end-users ready-to-move-in properties or soon-to-be-ready properties should be the preferred choice in 2014.