How can buyers negotiate with builders for good terms?
Two things will help you land a favourable deal. If you can make large payments upfront, developers are willing to give you discounts.
Due to the nature of the business, most of them face cash issues. Also, compared to central locations, you can get better deals in peripheral areas that are not as well established as residential localities.
Many builders are offering extras now. How can one evaluate these offers?
You have to be clear on what your priorities are. Do not compromise on vital parameters such as location, developer record, title or layout.
Beyond that, if frills are thrown in, it is good. In some cases, you will find that the extras are not adding any value. Say, if the builder is giving a wardrobe and you already have one, there is no value.
What are common mistakes home buyers make?
Home purchase decisions tend to be a lot more impulsive, rather than arrived at based on analysis. For instance, there must be clarity on whether the home is for self use or investment.
Many a time, people buy because a friend or relative, who is savvy in purchases, had bought a property.
What may be suitable for him may not apply to you; so do your own homework. And if there is one issue bothering a home buyer now, say car parking, emphasis is placed only on solving that issue.
Do not be overly focused on one aspect; evaluate all features. One more aspect that is often overlooked is the long-term maintenance plan. A well-maintained complex retains value and fetches better rents; so pay attention to this.
What extra checks should first-time home buyers do?
First, know your loan eligibility and look for projects in your budget. This will save you the agony of getting into a commitment that is too financially stressful.
Getting faster possession is important, as you can start saving on rent by moving into your home.
Check the payment terms to ensure that they are not front-heavy. The total cost of possession includes the interest you pay. Also, you need to do apples to apples comparison of price and the features you get.
For example, a property on the main road would be more expensive than one that is a little way off. There are also differences in the loading factor, which decides how much of the super built-up area is useable.
Do a side-by-side comparison of two or three properties to see if there are any hidden costs before deciding.
For someone with, say, a 10-year horizon, what would you recommend they invest in?
Personally, I buy land with a long-term view of over 20 years. The value of a flat purchased may increase, but after 15 years or so, based on how it is maintained, tends to flatten or even fall. You also have to worry about renting it and maintaining it properly, especially if the property is far away. Land does not have these issues.
What are the property investments you are optimistic about?
City localities in the metro rail belt are a good short-to-medium term bet in my opinion.
We will certainly see residential market pick up as connectivity improves. It is better to rely on metros, tier-2/3 cities, which have diversified and broad-based industries, rather than on a single sector.
I am optimistic about affordable and mid-size homes. Retirement communities, where you get service assistance, are also seeing good demand from those in the 40-50 year age group who are planning their senior life.
Source-the hindu business line