Realty queries: Things to consider before buying a propertyadmin
Things to consider before buying a property
Gulam Zia, Executive Director, Knight Frank (India) answers the real estate queries from our readers.
I am looking at buying a resale property. What are the specific factors that I must make note of before purchase?
If you are going for a resale property, you must ensure complete clarity with regard to the legal status of the property. You may seek a real estate lawyer’s help to ensure that the title is clean and marketable.
You should then look for outstanding on the property. If the seller has a running mortgage then it must be cleared before you buy that property. Other outstanding like property tax, maintenance dues, electric energy dues, to name a few must also be taken care of. In case the housing society stipulates an NOC (No Objection Certificate) before purchase, the same must be complied with.
Is it advisable to invest in a second home?
If the second home is for leisure or a weekend getaway where one may want to spend every weekend, then a second home definitely makes sense.However, if the larger goal is to make a return on investment on sale at a future date, then a second home is not advisable.
Typically, second homes are in remote locations and the chances of appreciation in these locations would be least compared to the rest of the housing market. Further, chances of you selling this apartment when you need the money will be very low because there will be very few takers at any given point in time.
So if liquidity is on one’s agenda, then a second home should not be relied on. You will be pushed to sell the property at a huge discount, eventually ending up with a loss on your investment.
Do you see revival of real estate industry post demonetisation?
Real estate caters to the very basic need of an individual i.e.housing. This only means that the sagging morale of the industry post demonetization is only a temporary phase. Elimination or reduction of cash economy will force every home buyer to review their finances before they buy that house.
Developers too will have to be cautious about their financial health. However, a silver lining is the long overdue correction in mortgage rates. We already see the home loan rates inching closer to 8%.
This will improve the spending power of every home seeker and will induce a new lease of life in the market, albeit gradually in next few years. So, a revival, even if it takes a bit longer than expected, is only imminent.
Source: Economic Times