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Buying a House in India? Keep This in Mind

Perhaps you’re reading this because you’re finally on the verge of buying or investing in property, and you’re probably a millennial lost in the hubbub of a very unorganized Indian real estate market. However, property has been a top choice for investment and asset-creation since olden days, and is definitely still relevant today for all the right reasons.
According to IBEF, by 2040, the real estate market will grow to USD 9.3 billion from the current USD 1.2 billion. A 9-fold growth in the span of 2 decades is massive – especially in one of the most prosperous industries of India. By 2025, the market will contribute to 13% of India’s GDP. This means a few things for millennial and Gen Z buyers planning to buy a home.

What Buying a House Would Mean For You

In the upcoming decades, India’s population is speculated to explode. By 2030, we would have overtaken China to be the world’s most populated nation. And while labor-intensive resources would probably surge and contribute to GDP growth, certain resources – such as land and property – will remain finite.
This means that the demand-supply ratio of people to land will flip against us. Property rates are going to sore phenomenally, and the incoming innovations in the prop-tech sector will contribute to this further. People who possess land, houses, and property as assets will witness the returns on their investment grow multifold. This is one of the primary reasons why experts suggest that a key contributor for a person’s overall wealth will be inheritance, and in India, inheritance is usually passed down through property.

Tips For Buying a House

Needless to say, if you have the math for your property purchase and/or investment right, no time is too bad (then again, this is true of all assets). Consider the following tips while buying a house in India for a seamless experience:

Tip 1: Be Mindful of RERA Compliance

The Real Estate Regulatory Authority (RERA) came into effect when Real Estate (Regulation and Development) Act 2016 was launched. The aim of the act is to protect home-buyers from getting scammed, and to boost investments in the real estate industry. When you decide to buy a house or buy any other property, make sure that it is part of a RERA registered project.

Tip 2: RERA Verification

Verify the RERA number and details of approvals of the project on RERA portals. You can log into state-specific RERA sites for more information about the same.

Tip 3: Choose Property Based on Your Budget

Some financial planning before selecting the right property wouldn’t hurt when it comes to getting possession of your property. A fully constructed, finished project costs much more than a project under-construction does. This is because, with time, the cost of property increases – a house is an incrementing asset. So, a project that is speculated to be completed 4 years after your booking date for a house would cost much cheaper than what it would cost 3 or 4 years later.

Tip 4: Track Property Status

If you decide to go ahead with an under-construction project, track its progress consistently now and then. For this, you can have a dedicated date of every month – say the 1st of every month – to connect with the project team. You can visit the site time and again as well. This is an essential practice to avoid getting scammed. (Read about how Saif Ali Khan lost 70% of his earnings in a property scam in Mumbai).

Tip 5: Check Costs and Benefits

A lot falls under this gambit. If you’re buying a house in a township, you could have a number of added benefits, such as security perimeters, internal schools, and clubhouse memberships. You should look out for such perks since better access to amenities results in a more enriched quality of life.

Step-By-Step Guide For Buying Property

Step 1: Determine Your Budget

The core practice of budgeting states: find out unavoidable expenses first, then determine how much you would like to save, then decide if you can spend the remaining money. Buying a house is a heavy strain on your pocket. Therefore, it is important that you consider your current earnings (singularly and as a family unit), your current savings, and what future expenses may arise (such as schooling of an offspring). This would also help you decide whether or not you should take out a home loan and at what rates.

Step 2: Location and Type

Next, you have to zero down on any particular area you wish to live in. Suppose you plan on moving to Delhi, and you’re looking for a home around your workplace. Rates for different areas in Delhi vary dramatically. This is bound to have an impact on which location you decide on as well.

Step 3: Resale Value

Budget and location may be the top priorities for anyone buying a house, but never forget that property is an asset. This means that its value would appreciate with time. Since the future is always uncertain and can lead to any unforeseen contingency, you should try to evaluate what the resale value of your property is. This is applicable to all high-value goods you purchase.

Step 4: Land Use Documents

Be it an empty space of land, a fully constructed bungalow, or a flat in a residential apartment building – land documents are essential. This is because different types of land in different cities and states of India are governed by different laws. This is precisely why when some scammy project developers build residential complexes on land not meant for residential or commercial use, their projects are demolished. This turns into an exhausting years-long crusade for everyone who invested money unknowingly in that property, as they try to get their money back. In addition to that, you should definitely get the documents vetted by a legal rep or professional. This is because forging papers is becoming easier by the day, and laymen can hardly ever tell the difference. In fact, they don’t even know what the differentiating factors are when it comes to legitimate and forged documents.

Step 5: Seller and Property Verifications

If you have the luxury of visiting the property before paying the full amount upfront, definitely choose to do that. If possible, connect with the seller and verify some crucial documents as well. The verification process for buying a house in India is combined of two parts: title verification and seller verification.
In title verification, you ought to scrutinize all property-ownership documents provided by the seller for at least the last 12 to 30 years. In seller verification, you ought to verify the Aadhaar, PAN, bank statements, and other KYC documents of the seller to confirm his/her/their identity.

Step 6: Deal and Loan

Once your purchase or investment plan starts to take shape, you have to figure out how you’ll finance the purchase. Compare different types of loans on sites like Paizabazaar.com to find your ideal fit. Make sure that once you’ve deposited a token amount with the seller to book your future home, you get a written acknowledgement with all necessary information highlighted. This info would be the amount paid, date, stamp duty, signature, handover date etc.

Comment your thoughts down below and share with us what you think! You can also mention any particular fintech topics you would like us to cover in our upcoming blogs.

Read More: How To Start a Successful Online Business

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