Factors to consider before investing in residential property

Investing in residential property is one of the most important decisions that has to be taken during an average person’s lifetime. Hence, it is imperative that caution is employed while deciding on the ideal residential property to invest in. If the prospective buyer has a pre-conceived notion about what his requirements are, then selecting the property of his choice would not be a cumbersome process. On the contrary, it will be an enjoyable one.

There are various aspects that a prospective residential property buyer has to consider while making an ideal investment decision. These are some of the aspects that need to be considered:

·  Ideal time to buy property:

If the prospective buyer is looking to invest in residential property for the long-term, then it would be beneficial if he invests during the launch of the project. During the launch stage, property prices will be at their lowest. Moreover, he can also avail inaugural discounts. However, there are many pitfalls while investing in property during the launch stage of the project. Considering that many residential projects face considerable delays in completion, it would ideally be better to invest in a project that is nearing completion or is ready to move-in. This would negate the possibility of having to wait indefinitely especially if the buyer would like to gain possession of the property immediately.

·  Verification of documents:

Before deciding on a property that is ideal for him, the prospective buyer should verify certain documents that are involved in the sale transaction. Some of the documents that need to be verified are the conveyance of title in favour of the builder, the license, development right and approvals that the builder has obtained as well as the clear and marketable title of the residential project. Besides, it is also essential to ensure that an allotment letter has been executed and a sale agreement has been prepared based on the payments made by the buyer. It should also be ensured that recognised financial institutions have approved the project. The buyer should also make sure that he gets a Completion or Occupation certification from the builder. Moreover, he should also verify the tentative layout plan of the project as well as the plinth area of the building.

·  Deciding between a Freehold and Leasehold property:

Leasehold property is a property in which a lease is involved. The user of a leasehold property has the right to construct, develop and use the said property for a period of years that has been pre-decided. However, during this period, the user cannot claim or actually possess the property. On the other hand a freehold property is a property that is free from any liabilities and can be owned by the buyer permanently.

·  Infrastructure:

Besides the location, connectivity and the return on investment expected in future, the buyers should also take into consideration the present and the upcoming social and physical infrastructure facilities in the area. Social infrastructure facilities include schools, colleges, educational institutions, hospitals, religious institutions, banks, shopping centers, restaurants, entertainment facilities, water bodies, parks etc. Physical infrastructure includes transportation networks such as roads, railways, mass transit systems and airports. It also includes bridges, flyovers, footpaths, drainage and sewage systems, street lighting, water and electricity supply, postal and telecommunications services etc. Hence, it is essential that a buyer considers the present or future availability of such infrastructure facilities while deciding on a property to invest.

·  Liveability factor:

If the buyer has bought the property both as an end-user as well as a long-term investment, then it would be better if he stays in the residential property for a short period initially. This will give him a first-hand experience of the liveability quotient of the residential property. It will enable him to understand the pros and cons of the property based on which he can decide on the suitability of the residence for investment purposes. Moreover, he can make necessary modifications to the residence in case he is planning to rent it out in future, thereby enabling him to get higher returns on his investment.