Whether you’re a first-time property buyer or invest in property quite often, it is an exhilarating experience. But it can get overwhelming quickly.
Where do I invest? What is the right budget? Can I afford that much?
All such questions begin to flood through your mind at a million miles an hour. Relax, buying property is one of the most important aspects of our lives. It is normal to get confused. Especially if it is a real estate investment in India for NRIs, who have no clue where to go. This is why we’ve put together this thoroughly researched guide with the help of many expert real estate investors.
Hang on, we’re not listing the best residential properties in India. This post will tell you all about choosing a good residential property in India yourself!
Firstly, there are a few factors to consider before you hop onto the bandwagon and buy a property. Let’s see what they are.
6 Factors to Consider Before Buying a home
Keeping a fixed budget is essential when looking for a home. Remember, this won’t be your final property so there’s no need to go overboard. Keep in mind your expenses and set aside how much you’ll need each month. For example, it is not advised to spend all your money on an apartment in the suburbs if you will go bankrupt after it. Try investing in a property on the outskirts.
Location and Rates
You’ve shortlisted some residential properties, what next?
Now you must carefully look at the locality. Look for a property near prime locations but not in it to avoid spending a lot. The location will also have a great impact on the resale value of a property (which is next on our list). For example, if you are looking for apartments in Whitefield Bangalore, you’ll pay a premium price due to locality as opposed to a location on the outskirts of the city.
If you’re looking to rent a home, knowing the rental rates in the area helps too. Go for an area where the rent is within your budget. On the other hand, if you are looking for a rental property, look for high-rent or populated areas.
The most common mistake buyers make is focusing only on the location and cost of the property. This leaves out a significant element–the resale value.
Although they are both important aspects when buying a property, focus on the resale value too. If you overlook this factor, your future sales price may not be as impressive as it could have been.
Home Loan Eligibility
Make sure you are eligible for the required home loan amount.
To put it simply, your home loan eligibility depends on four things,
- Your repayment capacity
- Your income
- Whether you’re in a debt
- Your age
Now, we have assumed that you are the applicant. All these things are vital when applying for a loan. Lending companies or banks offer online services like eligibility calculators to calculate the borrower’s eligibility, you should also check current home loan interest rates in 2020. Know that the home loan rate that can be sanctioned varies based on the entity you seek the loan from.
If you look for residential apartments with a ton of amenities when your budget is tight, it can add up unnecessary costs without actually adding extra space in your apartment. Look for homes in adjacent areas to minimize spending.
We say this because other costs must be considered too. The stamp duty and registration tax levied by the Government is one such expense. Learn about the rates applicable in your city by contacting the Ready Reckoner. They’ll help you find the charges as per the market value.
Whether constructing, buying or selling property, it is mandatory to get legal advice. Since real estate is a hot selling market, you must be clear about the laws in that zone. You must set up an agreement before making any transactions.
Signing a legal agreement is of utmost importance and we recommend not to go forth with any deal without it. If you receive an agreement, get it thoroughly checked by a lawyer to spot any lapses.
The Bottom Line
Buying a residential property is a big step for most people. However, your first property will seldom be the last you buy. So, make sure to not let your emotions influence your decisions. Keep your mind focused and invest wisely.
Overlooking any of the discussed parameters can have a significant impact. Whether it is the resale value or the legal aspect of the property, buying a property in a rush can have consequences. So, consider all the factors mentioned above and only then move forward with a deal.
Amogh Mundhekar is the co-founder of GlobalHome – US based digital platform for buying & investing in pre-vetted apartments and luxury villas in India.
Last modified: October 14, 2020