Investing in a property is one of the biggest financial decisions of any one's life. Investment in property has always been considered as a safe investment avenue for individuals looking to earn excellent returns on their investment. Over years, investment in property has emerged as one of the most sought after investment opportunity for investors. But now due to the rising real estate prices across India, the amount of money required to purchase a property, whether residential or commercial, has increased manifolds. Even though the returns from investment in property are still one of the highest amongst different investment avenues, the financial resources required have also increased. In many cases, investors have to obtain a loan to be able to execute transaction. Therefore, the returns from the investment should cover the interest cost that you have to bear.
If you are contemplating on investing in a property, you need to check certain aspects related to the property to make sure that the decision is in your best interest. Here is your ultimate checklist that you need to follow before investing in a property: -
1. Location of the property
It is one of the most crucial aspects that you need to check before investing in a property. There are certain location-based aspects that play a significant role in the appreciation of the value of a residential property i.e. proximity to amenities, infrastructure, safety, neighbourhood, proximity to city centre, transportation facilities, roads, highways etc. If the property is located near to these facilities, there are significant chances of its value appreciating quickly. Whereas, if the property is located away from city centre and in an upcoming area, the rate of appreciation in the value of the property will be slower.
If you are investing in a commercial property, you need to look at certain other aspects such as roads, water supply, electricity connection, expressways, markets, transport centre.
2. Title of the property: -
If you are purchasing a plot of land, then you must get a lawyer to verify the title of the property. You should only invest in a property if it enjoys a clear title and is free from any disputes or encumbrances. While purchasing a flat, office or shop from a builder, make sure that the builder has obtained all the necessary permits and clearances from government authorities.
3. Availability of finance: -
Due to the rising pricing of real estate in India, you might require availing a loan from a financial institution to complete the transaction. You must therefore check that which banks and NBFCs are willing to offer loans for purchasing the said property. Moreover, if the banks are willing to offer you a loan against purchase of a property, they must have got its title legally checked, thereby offering you peace of mind.
4. Future development: -
The appreciation in the value of a property is directly linked to the future prospects of development in the region. Properties with upcoming markets, infrastructure projects, highways, schools, hospitals, markets in the vicinity have a higher chance of registering appreciation in their value.
5. Rental Income: -
If you are investing in a property which you are not going to use for your needs, you will certainly expect a steady rental income from the same. So, before you invest in a property make enquiries from local property dealers regarding the rental market in the area and expected rental income that you can generate by renting out the purchased property.
6. Age of the property: -
When you are looking to invest in a property located in an already constructed building, you should check the age of the property as well as the condition of the property. The older is the age of the building; higher would be your costs for renovating and upgrading the interiors. This can mean an additional investment from your side and should definitely be taken into account.
7. Consider the all-inclusive cost: -
Many times, the builder or property dealer will inform you regarding the basic cost only. There are various additional costs involved with a property such as property tax, development fees, maintenance fees, registration charges, parking charges etc. You need to take these into account as well while calculating the total cost of the investment.
Investing your hard-earned money in a property is a significant financial decision and will have an impact on your finances for many years. You must therefore make thorough enquiries and think carefully before finalising a decision.