Accommodation Times Bureau
By Deep Kantawala, Group CFO & Head Investment Advisory, ICS Group
Buying a home is not only an investment decision but also an emotional experience. It represents stability and permanency. It can be a daunting task for first time buyers and may also seem confusing in the beginning.
For a large section of the society, home buying is a one-time activity and thereby needs due consideration.Though there is no single fool proof plan to buy a home, adherence to the below points could go a long way in making a right and financially efficient decision.
- Developer’s reputation:-It is always best to take a look at the track record of the developer you are considering. A reputed developer is most likely to have the required licenses, agreements and legal documents in place ensuring that the proposed project will not have any undue delays on this account.
- New property or resale property:- A recent paradigm shift seen in first time home buyers psyche is the preference of new property over resale property. As most of the newer buildings are offering modern amenities and better architecture, it has become a preferred option. Another reason is that post buying a resale property, the buyers have to invest in redoing the interiors to suit their own needs. However if you are buying an old property, one must ensure that all the required property documents are present with the owner and he has the necessary clearances from the housing society.
- Amenities:-It is essential to assess your personal needs as that will help you in determining what infrastructure is vital for you. Buying a property in a mixed use development is recommended as then the retail, medical and educational facilities are near your home.The buyer should also make a cost-benefit analysis of the amenities being offered by the developer such as a club house, children’s play area, swimming pool etc.
- Requirements and Scalability:-For most buyers, purchasing a house is amongst theearliest investments in their life. Thereby, it is important to take into account ones current and future requirements. The number of occupants in most families will steadily go up over a period of time and this should be kept in mind while deciding the size of the apartment.
- Product meets expectation:- A number of developers over-promise and under-deliver. As a buyer, one needs to check and confirm that the materials and features advertised are actuallypart of the final delivered home. Further, as a buyer one is also entitled to charge the developer a penal interest for late delivery provided such a clause is recorded in the sale agreement/ MOU signed upfront.
- Budget and payment terms:-For most buyers, their home will always be their single largest investment and thereby it would be sensible to formulate a realistic budget and try not to exceed it. Nowadays, most developers offer a staggered payment mechanism with the majority amount payable at the time of or near possession, such as a 20:80 or 10:90:10 scheme which enables buyers to plan their liquidity and home loans efficiently.
- Taxes:– If one is purchasing a house purely for investment purposes, then it would be prudent to make oneself well-versed of the different tax benefits/ liabilities of owning multiple homes, deductions available if the acquired property is funded via a loan, etc.