Tuesday, 5 April 2016


Apart from a roof over one’s head, Property is also one of the safest investment options, with steady returns and ‘tangible’ gains . . .  

The average Indian opts for equity, gold or real estate when it comes to asset classes for investment purposes. While a roof over your head is the obvious plus point, other than self-use, investing in real estate is by far one of the most prudent decisions an individual investor could take. This is simply because unlike the stock market or mutual funds, real estate is much simpler to understand and track. Moreover, there is ample information available on the various aspects that drive the decision, from price movements to infrastructure development and rental rates to new projects coming up. In today’s networked world, there are many sources from which one can glean sufficient details to take an informed decision. Often, perspectives of real estate industry experts can also help deepen knowledge about real estate and how consider it as an asset class. These are a few aspects to keep in mind while investing in property:

  • Rules and regulations with respect to real estate differ from state to state. If your property buying is in a different state than where you live, ideally, get the rules and regulations clear by interacting with a legal expert/ lawyer. 
  • The demand for properties will always pick up in emerging or developing areas. Ensure you study the trends and scope for further growth in a location before taking a decision. 
  • Do their homework and ensure the credibility of the developer, his track record, delivery pattern for past projects, features of the buildings and infrastructure, etc. Following a few simple dos and don’t like this can be extremely beneficial to the individual investor; after all it is your hard earned money that is being invested! 
  • Study growth patterns in surrounding areas and try to figure out if the location you are considering would benefit directly or indirectly in any way. From Special Economic Zones to IT hubs, a cluster of management or engineering colleges and other key educational options, any or all these can influence demand at your chosen location if it is well positioned to take advantage of those developments.  
  • Malls are a key growth driver. With shopping, entertainment and leisure facilities available at a single venue, they ensure the location will gain a higher profile and command higher prices. Upcoming malls are a great indicator for investors. 
  • Property selection is another key aspect. If you are expecting your investment to appreciate in value, ensure that the project is of minimum quality standards. Otherwise, a shabby building may not appreciate in value even at a prime location. 
  • Leasing capability is equally important. Most people prefer to lease a two-bedroom apartment or one with a larger configuration. One-bedroom flats and studio apartments are mostly for self-use.  
  • Seeking prospective tenants is much easier if the project is located in the vicinity of a business hub or entertainment industry facilities like studios. Proximity to companies from the BPO or ITES sectors is also a good option. 
  • Budgeting is quite important. Ensure you provide sufficient funds for furniture and furnishings in addition to your basic purchase. Again, it’s much easier to lease out an investment property if it is well furnished and has a subtle but classy interior décor scheme.   
  • Real Estate can be quite a lucrative investment option. The smart thing is to keep rolling over your investment at periodic intervals. When an investment has appreciated sufficiently in value and the property prices in that location have almost peaked, there is limited scope for further capital appreciation. In such cases, consider booking your profits and exiting that project. 
  • If you are looking at substantial capital appreciation, real estate provides precisely that opportunity. By the time you book your profits and exit one particular project, your capital will have grown to the point that you can reinvest it in a larger apartment. 
  • If you have limited capital but still want to invest in real estate, don’t despair. Book an under construction property with a home loan. The tax benefits will help through the initial period and once you get possession and lease out the premises, most of your repayment will be taken care of by the lease rent and tax benefits together. Your own contribution would be quite limited in percentage terms. 
  • Management and maintenance are two key aspects to keep in mind. If you want your investment to retain its attractiveness and appreciate in value, ensure you keep the interiors in good shape. The ambience of your investment should be of a level that makes it easy to lease out. 
  • Also, in townships, ensure that the project itself is well maintained and managed. 
  • And finally: spending a little on professionals will ensure long-term returns. 

1 comment:

  1. This was a really great read, appreciation for taking the time to put it together! Touched on some very good... villas for sale in bangalore|villas in whitefield - Real Estate