Should I Buy An Under-Construction Flat or Ready-T0-Move-In Bangalore?

Jul 31,2019 / By Prahalad Singh / No Comment

Why one should buy an under-construction flat over ready-to-move-in Bangalore?

Buying property is an important decision for all. It’s an emotional decision which can be taken very cautiously. You are not going to switch your home in the next few years after buying, rather you will not sell it off except you get a better deal or need a bigger home.

The resale housing market, especially the new, ready-to-move-in section, gives home-buyers a chance to avoid the risks of buying under-construction properties that are likely to extreme delays.

Ready-to-move-in properties reduce the chances of getting cheated, apart from offering other benefits.
Ready-To-Move-In flats are more expensive than an under-construction flat in the same locality. You should have a strong financial position for a ready-to-move-in flat, as you would have to pay the full cost of the property before the builder handovers you the keys. Your home loan should be sanctioned, and EMIs on the full loan amount will start instantly. On the other hand, an under-construction flat has an easier payment method, as you would have to make staggered payments spread over the years.

This is, perhaps, the only positive for an under-construction flat, however. “The price gap between RTM and under-construction apartments has narrowed considerably because of the supply overhang

If you are planning to buy a property, you would get lots of options. But there is an advantage in choosing a ready-to-move-in property. Below we are listing a few of its advantages and disadvantages:

Advantages of Ready to Move in Property:

Immediate Authority on Your Flat Purchase: In case of ready-to-move-in property, you can instantly move into your new house. You will immediately get the possession of your home, what you have paid for whereas for an under-construction property you have to wait for 3-5 years for the flat to be delivered.
Low-Risk Involvement: In a ready-to-move-in property there are no risks of delay possession. While in the case of under-construction property, project delays are much more common and there are many cases where a builder has duped buyers. So, you need to be cautious while choosing a builder for an under-construction property.
Instant Relief from Paying Rent: Once you relocate into your new home, you won’t have to pay any rent. All you have to pay is EMI for your home loan. While in an under-construction property, you will have to carry both EMI and Rent for a number of years.
You will get what you will see: An under-construction property is sold on papers. Sometimes, there can be some discrepancies in the final outcome and what you were promised. On the other hand, in the case of ready-to-move-in property, you will first see and inspect the product and then only you will decide to buy it or not.
Immediate Tax Benefits: In a ready-to-move-in property you can challenge tax exemption on your home loan on both principal and interest repayment instantly while tax benefits on home loan for an under-construction property can be claimed only after you get the flat possession.
Only EMI With No Down Payment: The most helpful thing about ready-to-move-in property is that you will have to pay EMIs on the home loan, and would include no other payments. In case of an under-construction property, EMI normally begins after completion of construction work. Despite this, if there is any delay in the construction, then the EMI will start once the home loan gets dispensed.
Check The Infrastructure And Other Facilities: When you are buying a ready-to-move-in property, you can check the infrastructure and other facilities around the flat before buying the property.
No increased cost: This is another advantage of buying a ready-to-move-in property as you are not supposed to pay the increased cost of the property after paying the booking amount. But in the case of under-construction properties, you have to bear the increased cost of the property.
Buy within Your Budget: In a ready-to-move-in property, you can select a property within your budget. If you have a lower budget, you can buy a home that fits into your budget. Whereas, when you buy an under-construction property if the project got delayed for three or more years the builder asked for increasing the cost of construction which you have to bear and it increases your overall budget.
No GST: Taxes play a crucial role in buying a property. Currently, a buyer does not pay any GST while buying a ready-to-move-in property. An under-construction flat, on the other hand, attract 12% GST. So, if you buy an under-construction flat worth Rs 60 lakh, you will have to pay Rs 720,000 as GST.
Rental income: If the flat you’ve bought as an investment and not for personal use or, if you are planning to move in later, you can rent it out and make some rental income. You can use the rental income to pay your EMIs or keep it as a rental income.
Ease of selling: It is difficult to sell an under-construction property, especially if its possession is delayed or it’s involved in litigation. In many cases, developers do not allow the transfer of apartments until the project is complete.

Disadvantages of buying a ready-to-move-in property:

High Property Cost: One of the major drawbacks of buying a ready-to-move-in property is the higher cost as compared to an under-construction property. The cost difference could be anywhere between 20-30%.
Construction Quality: It is very easy for an under-construction property to analyze the work progress and thus being aware of the quality of construction in terms of the material used, the strength of the foundations etc. But you can not conduct any such inspection in a completed flat.
Age of The Property: Buying a ready-to-move-in property might not always ensure you a brand new home like an under-construction property. The flat which you have bought might be up for sale for a long time. Therefore, if it has not been maintained properly, it might look old.
Exclusion from RERA: An old ready-to-move-in flats with Occupancy Certificate as on 1st May’ 2016 have not been included under RERA. Thus, its promoters are not accountable to make its information available on a public platform.
The under-construction projects are no less in terms of quality and cost if you do all your due diligence on the project such as price, location, developer, and other related aspects. The under-construction projects offer a higher return than a ready-to-move-in-property.

Advantages of buying an under-construction property:

Cost-effective: The cost of a property for the buyer is one of the most important things. An under-construction property is likely to cost less than ready-to-move-in properties. Buyer will get many options of under-construction properties. It is also true that possession gets delay but cost worth. With RERA in place, developers must deliver on time and if they don’t they are responsible for compensation to buyers. Post RERA, there is an added advantage of booking a unit in an under-construction for the buyers.
Good Appreciation on Investment: Since you are buying your property at a lower cost, the appreciation is expected to be higher. As the construction work in progress, the cost of your property also increases. For good returns on their investment, one should check the location, upcoming infrastructure and employment hubs situated nearby.
Payment Flexibility: While buying a ready-to-move-in property, a buyer has to pay the entire amount one chance. There are stamp duty, registration charges and other miscellaneous expenses as well. But at the initial stage for an under-construction property, you are paying 10-15% as a booking amount for under-construction properties. You pay EMIs to the bank in case the property is financed or else you pay as per the construction plan.
Discount and offers: It is very difficult to get a discount on a ready-to-move-in property. It is a complete house and you need to pay the cost as per the market and even more depending on the amenities. However, if you are buying in an under-construction project, there are several discounts and freebies offer such as gold coin, modular kitchen, air conditioner, gold coin, free car parking among others. You can also negotiate on the final price.

Disadvantages of buying under-construction property:

Under-construction properties are usually in the under-developed parts of the city and therefore, the capability for price appreciation due to future development is always good. However, this is not true in each and every case. Earlier, buyers have stuck in lots of litigation cases after buying under-construction properties. Before buying an under-construction property, one must have to look at the location and coming plans around that area. Apart from that, in an under-construction project, a buyer also has flexibility in payments, with options like construction-linked plans, subvention schemes, flexible payment plans, etc. Below is the list of disadvantages for an under-construction property:
Delay Possession: This is one of the most common issues related to under-construction projects. In most cases, the project got delayed due to various reasons and in this situation, the buyers face the consequences. Generally, the builders projected a maximum of 3 years timeline to complete the project. But in maximum cases, the project got delayed for more than 3-5 years.
The increase in property costs: This is another common problem faced by the people who book an under-construction property. If the project got delayed for even 2-3 years, the builder asks for the increased cost for the property. It is a kind of burden on you as you were expecting a certain amount to be paid once you got the possession of the property, but because of the delay in the construction, you have to bear the increased cost of the property.
Compromise with quality: When the builder shows you the sample flat, it is usually built with all possible facilities and with the best quality products. With time, you make an expectation of getting the same quality of work done within your home, but when you get the real home you find that it is much different from the promised one as the builders don’t use good material in construction. This type of situation arises very rarely and with unprofessional developers. After the implementation of RERA, a builder cannot change the building approval plan once sanctioned and display the same on their website.
False projection & promises: This is one of the most common and biggest issues with under-construction properties. The builders make numbers of promised to the customers related to infrastructure and amenities within the society, but in most cases, you don’t receive what you have been promised. But after implementation of RERA, the builder has to offer what he has promised during the agreement. A builder cannot change the building approval plan once sanctioned and display the same on their website.

What does CommonFloor data say?

As per CommonFloor research and analysis, we have selected four top real estate destination of India and found that Under-construction property rates are cheaper than ready-to-move-in. Why? Our builder is busy constructing the apartment and the locality around this apartment also develops with time. A few years later your apartment is ready and you take possession of it in a posh locality. Under-construction flats give you bargaining power. You can negotiate with the builder for a cheap flat. Here is the list of top 4 localities and its rate as per BSP:

Locality	City	Avg Sale Price (RTM)	Avg Sale Price (UC)
Sarjapur	Bangalore	4,615	4,494
Whitefield	Bangalore	6,556	6,345
Hi-Tech City	Hyderabad	6,015	5,873
Rajarhat	Kolkata	4,923	4,476
Sector 104	Gurgaon	5,671	4,397

Price analysis between Ready-to-move-in Vs Under-construction:

From the above data, we found that the rate of an under-construction property is much cheaper than a ready-to-move-in property.

While buying a ready-to-move-in property, a buyer has to pay the entire amount one chance. There are stamp duty, registration charges and other miscellaneous expenses as well. But at the initial stage for an under-construction property, you are paying 10-15% as a booking amount for under-construction properties. You pay EMIs to the bank in case the property is financed or else you pay as per the construction plan. There is flexibility in terms of payment and you do not need to arrange a huge amount to buy an under-construction property.

The interest burden on loan:

In an under-construction property, a bank dispenses the loan amount partly to the builder. However, you may be required to pay the EMI on the approved loan amount and not the disbursed loan amount.

EMI for under-construction property permits you to make payments through EMIs, in a partially dispensed loan for an under-construction project. The loan amount is partially dispensed and EMI is fixed as per the approved amount. The period of the loan continues moving up with an extra amount being dispensed. The EMI will continue constantly during the tenure of the loan. Save on interest and secure faster payment of the loan. As your EMI starts instantly after the 1st disbursement, your principal repayment also starts together, by that reducing your interest burden and tenure.

Month	Stage	Amount Disbursed	Pre-EMI
1st Jan	On agreement	Rs 10 L (20%)	Rs 8,750
1st July	On completion of foundation and ground floor	Rs 10 L (20%)	Rs 17,500
1st October	On completion of 1st and 2nd floor	Rs 10 L (20%)	Rs 26250
31st December	On completion of 3rd floor and possession	Rs 10 L (20%)	Rs.39935

As explained above, you would pay (8750 x 6) + (17500 x 3) + (26250 x 3) = Rs 2,36,250 as pre-EMI (interest) towards the dispensed loan amount. Your EMI of Rs 39,935 for the leftover 20 years starts from 01-Feb (i.e., a month after final disbursal).

Here are the tax benefits that you can avail when you take a home loan for an under-construction property:

1) As under-construction properties are relatively cheaper, the capitals required for them would be relatively low. Therefore, the EMI payable on the loan amount would also be lesser.

2) As the EMI on the loan is pretty fair, you can increase your monthly instalments to decrease the loan period. This will encourage you to save more on your total interest payment.

3) The person who is taking the home loan can refuse the deduction of the interest amount paid during the pre-construction phase.

4) One can get tax benefits for the stamp duty and registration fee on the property.

5) The interest amount paid earlier to the year of completion is collected and 1/5th of this amount is released as a deduction each year for 5 years from the year of completion. Simply, the interest paid on the home loan during the pre-construction phase can be taken for deduction in these 5 equal instalments.

Recommendation & Suggestion:

You must buy under-construction flats only from builders who have approved from state RERA with a good reputation and established projects. After the implementation of RERA, a builder is responsible to deliver the project on the mentioned time and if they don’t, they are liable to pay compensation to the buyers.

Since you are buying an under-construction property at a lower rate, the appreciation is expected to be higher. As construction progresses, the price of your property also increases.

If you’re planning for under-construction property, estimate your financial position, documents required to purchase and about the developers. It is essential to know your neighbourhood and the available infrastructure around the area such as nearby markets, common public areas and parks, connectivity issues, among others.

If the developer is appreciated, then banks will definitely request you to get yourself a loan. Buying a home can be a risky business, but buying after a good research and thinking about the long term return will be profitable.

Buying property Real Estate Real Estate News Smart Residential Living

Top Micro Markets in Bengaluru

Jun 20,2018 / By Priyanka / No Comment

Post the implementation of RERA, GST, the Bangalore Real Estate market has now recovered from the steadiness or Dip in the sector & is now heading strongly to cater the supply & demand effectively. The residential Real Estate market is number two after the MMR (Mumbai Metropolitan Region) with regard to absorption for Q1 2018 and overall supply. Bangalore’s housing market has witnessed good growth arising from positive customer sentiments, heightened commercial activities, and upgrades to infrastructure along with higher job opportunities. Bangalore is a market-driven majorly by end-users according to experts. There is increasing demand from the flourishing IT and ITeS sector and also via the start-up scene in the city which is thriving. Top-class healthcare and educational facilities available in the city along with continual upgrades in terms of physical infrastructure are also one of the major contributors to the rise in Bangalore real estate.

Below are the Top Micro Markets in Bangalore

5. Hebbal: Located in a strategic position and in close proximity to the Bengaluru International Airport, Hebbal forms an intersection point for all the roads that lead to the airport. The marvelous infrastructure is not all that’s in Hebbal; the beautiful Hebbal Lake preserves the locality’s nature quotient. People in and around Bengaluru frequently visit the lake, where one can go boating and rejuvenate themselves for the coming week. Several residential projects are also under development in and around the locality. IT professionals, old and young, typically book these apartments so they can move closer to the technology center.

Factors attracting property seekers & investors & making it as one of the preferred locality for investment are as follows

The Hebbal flyover connects the Outer Ring Road and the Bellary Road, which is a part of the national highway NH-7 leading to Hyderabad. The presence of the Outer Ring Road makes Hebbal accessible to other major localities in Bengaluru too.
The primary BMTC bus stand is below the Hebbal flyover. There are Volvo and regular BMTC buses carrying passengers to other localities in the city. Apart from that, people largely resort to auto-rickshaws to travel short distances. One can hire cabs too if the travel distance is large.
The Bengaluru International Airport is only about 30 km from Hebbal. The BIAL (Bangalore International Airport Limited) buses carry passengers from all across the city to the airport, and Hebbal is an important junction on the way.

4. Electronic City: Electronic city a pioneer in Information Technology Infrastructure Development, situated in Anekal Taluk. Electronic City lies in the southernmost outskirts of Bengaluru. Phase I lies right next to the Hosur Road, sandwiched between Phase II on its east and Phase III on its west. It consists mostly of retail hubs of electronic goods and services, with large land parcels dedicated to IT-SEZs. The development has been so extensive that the IT industry in Electronic City Phase I is completely saturated. Being Country’s largest IT/Industrial Park, Electronic City is one of the most preferred Residential Markets among Home Buyers & Investors.

While the Area offers best Infrastructure set up, below USP’s are major contributors in high demand leading to a spike in Realty prices.

Approximately 200 IT/ITES Companies including Infosys, Wipro, TCS, HCL, Tech Mahindra, Biocon etc. located within the Locality.
Operational Heli Taxi Service between Kempegowda International Airport and Electronic City.
Planned Namma Metro Phase-2 (R V Road – Bommasandra) to be completed by 2022.
The four-lane mixed corridor elevated highway from Silk Board Junction to Electronic City
The NICE Road connects Electronic City to other key areas in the west of Bangaluru like Bannerghatta Road, Mysore Road, Kanakapura Road and Tumkur Road. This is a 63-km 6-lane access controlled tollway.

3. Marathahalli: Located in southeastern part of Bangalore, Marathahalli lies adjacent to the old airport on HAL. It has Doddenakundi to its north, Kundalahalli, and Brookefield to its east and Kadubeesanahalli on the south. From a far-off suburb in the east of Bangalore to one of the well-established Retail Zone & Realty Hub, Marathahalli has witnessed a huge change over time. As an outcome of IT Boom & proximity to Commercial Hubs such as Whitefield, Electronic City, HAL Airport, Retail Development & Affordable pricing have been the key contributors to its growth. Residential project-wise, the real estate market in Marathahalli is booming. Because of its proximity to the IT hubs like ITPL, Sarjapur-ORR, and Whitefield, many IT professionals working in these places choose the locality of Marathahalli to rent or buy apartments. Average capital prices in Marathahalli ranges between Rs. 4473 to 5129.5 per Sq ft., making it a hot option to invest for the end users & investors.

With its emergence as a self-sufficient township, a large number of flats and IT companies have also come up in the area.
Some important shopping centers are Kalmandir, Nalli, Max Fashion, Puma, The first multiplex in Bengaluru, Innovative Multiplex is located here
Easy accessibility to Whitefield, Silk Board, Bellandur, Electronic City & HAL.

2. Hosur Road: Hosur Road is a lengthy and efficacious four to eight-lane highway running through the National Highway 7. Beginning at the Vellara Junction on Richmond Road, it winds through Koramangala and Silk Board and runs all the way up to the border town of Attibele in the Krishnagiri district of Tamil Nadu. The ‘villages’ of Bommanahalli, Hebbagodi, Singasandra, Chandapura, and Attibele which once held the status of out-skirt suburbs, now fall within the developing belt of Hosur Road, bringing in growth, movement, and progress to these areas. The growth of Electronic City as a large IT hub within the city led to the development of Hosur Road as well, creating a brand new and highly equipped residential and commercial market. Although this area initially targeted professionals working in the IT/ITeS industry, its affordable property rates, continued development of infrastructure, and great connectivity has attracted hordes of people from a multitude of professions

Connectivity and Transit Points

Hosur Road lies close to Baiyappanahalli, the terminal point on the east-west corridor of the Namma Metro, allowing for arrival at prime destinations like Indira Nagar and M.G. Road within minutes.
Bangalore City Junction, the main railway station in Bangalore, lies 9 km away and is accessible via auto rickshaw or taxi services.
The Kempegowda International Airport is approximately 40 km away from Hosur Road (Vellara Junction), and is easily accessible via KIA buses, with the frequency of half an hour.

1. Sarjapur Road: Sarjapur Road is situated strategically in southeastern Bangalore and links to Madivala from Sarjapur. This locality has witnessed considerable development and has found favor with IT professionals working in major zones like Electronic City, Whitefield, and Marathahalli. The area is home to the Market Square Mall along with several hypermarkets and supermarkets like the More Supermarket, Spencer’s Hypermarket and Families Hypermarket. There are several stores here including Looking Good Furniture, MegaMart, and Adidas. Several reputed educational institutions including the Delhi Public School, Indus International School, Swiss Graduate School of Management, Bangalore Technological Institute and the ISME-International School of Management Excellence are located in Sarjapur Road Locality.

Connectivity and Transit Points

The Sarjapur Road offers great connectivity to places like Whitefield, Koramangala, Electronic City, Marathahalli, Outer Ring Road and Silk Board. The Hosur/Haralur/Chandapura Roads offer great connectivity to the Electronic City IT hub.
The Kempegowda International Airport is located 52 kilometers away and can be accessed via the Outer Ring Road and also the Hyderabad-Bangalore Highway.
The nearest railway station is located only a kilometer away and is the Carmelaram railway station.

*Ave. SBA Price represents Average Super Built-up Area Price i.e. Rs. Per Sq. Ft.

Some of the Newly Launched Projects in Bangalore are ATZ Areva, V Venture Abode, Aswani Vamani, Sowparnika Pranathi, Arvind Oasis, Purvi Khosala, Ambiant The Infiniti

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Is it a right choice to buy a property this Akshaya Tritiya?

Apr 18,2018 / By Priyanka / No Comment

We all know that Akshaya Tritiya is an auspicious occasion for buying gold and making such other investments. This day is considered auspicious for both donations and investment, Akshaya Tritiya is one of the three most religiously significant days in the Hindu calendar.

Homebuyers, looking for property, can make a purchase on this day and those, who have already bought a property, can do the Griha Pravesh ceremony on this day.

Reasons to buy a home during Akshaya Tritiya

Free goodies: Some developers are offering discounts on the base price. Some builders are offering freebies such as modular kitchen, electrical appliances, woodwork furnishing, gold coin, vehicle, etc., depending on the ticket size. Homebuyers can select these freebies to bring down the total cost of buying a property.

Lower interest rates: With low-interest rates given by the financial institutions, developers turn up with new schemes in housing projects making it an open wide road for homebuyers with low interest and more alternatives in housing plans.

Less risk-ratio: The property prices in most of the places in India have gone down for certain reasons rather growing. This reason makes it promising for home buyers who are a few steps away from having a property to buy one this year.

It also makes the properties affordable compared to the prices a few years back. The real estate market is now steady with reasonable property prices, so this is the right time to buy a property of your own.

Cities you can invest in this Akshaya Tritiya
Buyers should consider options, based on their investment, expected returns and risk capacity. Big cities and metropolitan regions involve large investment and the returns are comparatively lesser, in comparison to emerging cities, where the investment amount required is low, and the returns are quite higher.

The most attractive cities for investment in property are Pune, NCR, Vadodara, Jaipur, outskirts of Mumbai and all the developing localities where infrastructural development is making a big impact.

Above mention, cities are also attractive because of the rapid acceptance of commercial real estate in these markets. This gives clear signs for setting up of demand for the residential real estate, which normally lags the commercial segment by around one to two years.

Buying property Real Estate Real Estate News Smart Residential Living

Important Things to Consider Before Buying a House

Jan 23,2018 / By Priyanka / No Comment

Buying a home is a crucial decision in your life as you are going to invest your hard-earned money. It is a wonderful feeling to have a place of your own that you can refurbish as you wish to. If you are just planning to start a family, then you are possibly looking for a place that your children can grow up in and call home.

Looking for a home involves of more than just going through real estate portals and realty websites, going through classified advertising, taking a suggestion from people, driving through neighborhoods to spot for sale signs posted on the front lawn, and visiting open houses.

There are countless other things that you look for other than the look of the house and an investigation of the neighborhood. Here are few ideas on how to dig a little deeper before you come to the conclusion that whether you have found the right house even if the appearance and the price appear right.

Financial Situation: Buying a property for the first home is exciting, but your bank account might not be as enthusiastic as you are. Know how much of your savings you are eager to spend before you get in over your head. Instigate by grounding yourself in actuality and determine the “true costs.”

When the time comes to look for a home, it is advisable to hire a realtor and incur the fees that come with them. Realtors not only know which homes are available in your price range, but they can also help you with the agreements and authenticities.

Once you have purchased the home, you will have more costs you didn’t have when renting one, some of which could comprise of property taxes, HOA fees, and private mortgage insurance, as well as any home maintenance costs that come up unpredictably.

To purchase your home, you may also be considering a mortgage loan. Think of, banks will often be willing to lend you more than you can manage to pay for, so make sure you stick to your budget. Match the expenditures you will be making to your income and you will avoid sinking into debt or possibly losing your home.

Location: Location plays an important role when you are planning to buy an apartment. Whether you have plans to live in a noiseless suburb or a bustling city, deciding where to live is key to being a cheerful property owner.

Talk with those who live nearby and get their judgment of the area. Find out the base home values where you are looking—what is the starting cost for most houses? If you have children you should put more emphasis on the quality of the school they will be joining. You will also have to check how the connectivity to your office is and if it fits your standard of living.

Size of the apartment: Do not invest your money in a smaller unit thinking that you can always purchase a bigger one later. Remove such thought from your mind forever. If you can’t afford a bigger house now, you won’t be able to do so after five years either. Property rates are doubling every year whereas the salary is not (which is a true fact, except it). And once you get stable in a house, it is almost intolerable to shift again.

Looking into the future, you would have kids who would need a room of their own. Your parents might come down to stay with you sometime. You might acquire a ton of household stuff which you would have to put somewhere. So buy a bigger house you can manage to pay for. Look for one with at least 3 bedrooms with a total area of about 2000 sqft. It might pinch a little in your budget now but will surely come in handy later.

Check the site: The layout in the brochure could be altered from the reality. So, do a detailed site visit before booking the property. Interact with persons in the neighborhood as they may know about the illegal occupation or other legal disputes related to the property.

Premiums: Some builders, or rather all of them, ask for a premium for corner units or upper floors. In other cities, lower level floors charge more than the higher ones but in Bengaluru, it is the other way around. This premium rate is normally 20/- to 50/- per sqft per floor. There is no problem in paying the premium charges except that it is not shown in any of the documents. Your house would still be registered at a rate per square feet they have quoted for you. See if your builder can remove it off or reduce it; most do.

Built-up area: The area of the apartment mentioned by the builder is called super built-up area. This is the area for which you are paying the money. This super built-up area includes the area reserved for corridors, lift, gardens and playground etc. The area in which you really get to live in is called built-up area which is typically 80% of the super built-up area. For instance, if you are buying a 2000 sqft apartment, you get only 1600 sqft out of that. Some builders claim to give 85% but that is the limit.

Amenities: Some developers may list a collection of amenities to attract prominent buyers but it is your responsibility to look at the bigger picture. What are the basic facilities essential while staying at an apartment? What is the luxury features the builder is offering? Everything needs to be kept in mind while choosing the right apartment for yourself.

Builder Reputation: Before zeroing in on the purchase, do a bit of homework on the builder’s reputation or track record. Check out their completed projects and go through the customer reviews to get a better understanding of the people you are dealing with. In a metropolitan city like Bengaluru, there are few developers who try to fraud innocent homebuyers and make waver from their promises. If you are thinking of buying an apartment in an under-construction project, be sure that they provide the apartment at the promised possession date, along with the required documents.

Security: Your home should be a safe shelter for your family. Once you have established the safety of the area, one of the first things you will want to do is take your security one step further by fixing a monitored security system in your new home. This not only helps you protect your new investment but it also provides you with peace of mind. Each house is exceptional, just like your standard of living, so find a security system that matches your needs.

Loan: Home loan is the one thing that causes most nervousness to new homebuyers. There are many things to be taken care of while taking a loan.

1. Pre-EMI: In a usual payment schedule, the bank freedoms a part of the loan, say 10%, at each stage of construction. By the time you take ownership, the bank would have paid the entire loan amount to the developer. If the construction takes 20 months, you have to pay the interest for 20 months on the money the bank has released. As and when the bank discharges money, the amount of which you have to pay interest increases. This interest amount is called Pre-EMI.

The substitute to Pre-EMI is to ask the bank to issue the full loan to the developer in the starting itself. Then you can start paying full EMIs to the bank instead of paying Pre-EMIs.

Even though repaying full EMIs sounds bad when you can get away with paying much less Pre-EMIs, it is actually better and will save you as much as 5 lakhs!

When you pay full money to the builder in advance, you get a discount of 4-5%. This works out to be 1.5-2 lakhs, depending upon the price of the apartment.

The Pre-EMIs that you pay do not count towards your loan, do not bring down your loan. You are just paying a convenience fee to the bank. Most of the homebuyers go for this option ’cause they cannot pay full EMI and the rent at the same time.

2. Interest rate: You can go for either floating or fixed rate of interest. Floating rates generally change every quarter but it is up to the bank. Fixed rates are of two types – fixed for a term and fixed for full tenure.

The fixed term is normally for three years after which there is an alteration to the rate, depending on the market condition at that time. There are very few banks which offer a fixed rate for full tenure. ICICI is one such bank. Some banks like Kotak Mahindra Bank offer a loan with interest rate linked to the Fixed Deposit rate.

You can change your loan from fixed to floating rate later and vice-versa but banks normally charge 0.5% of outstanding principle amount for this. There is one hidden cost though here. Your interest and principle components for EMI would be counted again and you might end up paying more.

3. Pre-closure: Most loans last for about 6-7 years even though they were initially taken for 15-20 years. If you get some extra money and want to close off your loan, banks normally charge you 2% of the remaining loan amount. Some banks do not allow you to do this at all.

In ICICI, you don’t have to pay any penalty for this if you leave 12 EMIs. Also, check if you can pay more than your EMI once in a while. Banks typically allow you to make excess payments once in three months or once in six months.

4. Insurance: Banks usually fund up to 85% of the apartment cost. Some banks fund up to 90% if you take loan insurance but 90% is the upper limit. The loan insurance premium is normally 8-10k per year. It covers things like unemployment, disability, death, or loss of property due to fire and theft etc. Unlike life insurance, you won’t get anything back at the end of coverage term. It is better to take simple life insurance if you are not worried about job security etc.

5. Tax exemption: You get tax benefits on pre-EMI and EMI only in the year in which you are taking the ownership of your house.

6. Loan disbursement: All the developers or builders have home loan tie-ups with several banks and they also have loan agents who deal with those specific financial institutions. After your loan has been approved, it takes a lot of coordination between the builder and the financial institutions to pay out the money. All this becomes much stress-free if you take the loan through these builder selected agents.

Is it the right time?

The right time to buy a house is when you have enough cash flow to make the down payment, when you can contentedly afford the scheduled mortgage, and when you have a good credit score. In addition, try to get some understanding of the real estate market at the time you are thinking of purchasing a house.

Sometimes prices escalate and sometimes they decrease. You should avoid buying a house when the real estate market is on the rise. Instead, the best time to buy is when the market is close to the bottom line. You can avoid overpaying for a house whose price value has mounted due to inflationary trends.

According to experts, the best time to buy a house is during the pre-launch offer. Real estate builders run many offers to attract potential homebuyers. As soon as the developer gets the plans approved by the concerned government authorities (and the project is officially launched), the cost of properties shoots up (and keep on shooting up). The number of units on offer during pre-launch is very less though.

Another thing to note is that builders do not release (put up for sale) all the units once they launch the project. They keep some units from selling them later at a higher cost.

Buying property Real Estate Real Estate News

Have plans to invest in Real Estate Market 2018?

Jan 17,2018 / By Priyanka / No Comment

Home buyers, home sellers, and real estate investors all want to know what 2018 looks like so they can get the most out of their property. The real estate market forecast for 2018 is seeing an upward trend, so this is the time to start investing in real estate market?

Want to flip a home?

If you are planning to flip a home to make a quick profit, this is a great time to get started while the property price continues to rise. A normal house flipping procedure takes around three to six months to complete. Which means you have to find the correct method and the means to recover a home so that it is interesting to home buyers.

According to some reports, there has been an increase by 3 percent of houses that were flipped and the housing market forecast for 2018 does not show any signs of this slowing down. With the cost of houses continuing to rise, this means real estate investors have a good possibility of making some quick cash by buying, fixing up, and selling a home.

Who Are You Selling Your House To?

There are cities across the country that are doing just fine in the real estate industry. However, there are some cities that are still battling to bring in new home buyers. So who are you selling your property to? Millennials are coming of age, beginning families, and they are now considering for a home to settle down in.

Think Long-Term

The troublesome part about flipping homes is the question of whether or not you will find a customer. But don’t give up just like that. Home buyers who are planning to settle down but may not have the credit or financial stability to make the down payment to buy a house may be more than happy to rent a house, making it possible for you to find a home that needs fixing. Because rental prices are increasing rapidly, you have plenty of chances to fix up a property and rent it out, making a profit for a long period of time.

If you want to skip the hard work of flipping a home, there is still a chance in the wholesaling business. With the right property, the right contract and the good fortune of the housing market forecast for 2018, you can find a real estate investor who does want to put the work into the home. The potential for big incomes may not be quite the same, but remember, you are not putting in the hard work and there is an opportunity for numerous deals at a time.

There are always jeopardies in the real estate market, but knowing the market will give you some peace of mind. The housing market forecast for 2018 is looking strong when comparing 2016 and the majority of 2017. If you find the right property, at the right rate, you can sell it and move on to the next opportunity.

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