Factors to consider before buying a residential property.
1. Define Your Budget: Regardless of your financial status, it is important to allocate a specific budget for your real estate investment. Consider all costs including property cost, taxes, levies, parking fees, society transfer charges, deposits, and brokerage fees. This will help you determine how much you can afford to invest before starting your property search.
2. Determine the Category and Purpose of Investment: Real estate investments can fall into various categories such as residential, commercial, retail, industrial, or second homes. Additionally, you should identify the purpose of your investment, which can be categorized as follows:
a. Investment for Trading: This involves buying and selling properties to achieve desired profits.
b. Earning Rental Income: You can invest in real estate to generate a steady rental income.
c. Long-term Portfolio Building: Some investors book properties during the initial stages of construction, paying installments as the construction progresses. Once the construction is completed, they can either sell it for profit or hold onto it as a long-term asset.
3. Consider the Location: Once you have decided where you want to invest, avoid changing areas simply because your desired property doesn’t fit your budget. Instead, consider downsizing the area you were planning to purchase. For example, if you were looking for an 800 sq ft property, downsize to 600 sq ft, but don’t compromise on the location. Many investors make the mistake of prioritizing size over location. Remember, it’s better to compromise on a smaller area in a good location than to opt for a larger area in a less desirable location.
PROTIP: Always prioritize a good location over size when making real estate investment decisions.
4. Conduct Thorough Research: When investing in the vast city of Mumbai, it’s essential to explore the various options available in each category and different areas. Take the time to research extensively and determine where and in which category you want to invest, taking into consideration your budget and growth prospects. It’s important to base your decision on reliable online data rather than relying on hearsay. By doing your own research, you can make an informed investment decision that ensures both security and growth of your money.
5. Learn about the Developers: Understanding the reputation and credibility of the developers is crucial when considering both under construction and resale properties in Mumbai. Properties constructed by reputable developers tend to command a premium, regardless of the building’s age or location.
6. Ensure Legal Compliance: 6. Ensure Legal Compliance: It’s recommended to hire a proficient lawyer who can help verify the marketable title of the property. While this may involve some expenditure, it can potentially save you from significant financial troubles in the future.
7. Consider Income Tax Implications: If you are a first-time investor planning to trade in invested properties, it’s important to understand the tax implications involved. This understanding will provide you with a clear picture of your net profit and make it easier for you to make a decision when it comes to exiting your investment.
8. Seek Expert Guidance: Engaging with an experienced and reputable real estate broker can provide you with multiple options and guide you through the entire process. Their expertise will greatly assist you in making well-informed decisions.
PROTIP: Prioritize Due Diligence: Always remember that it’s your money, and it’s your responsibility to secure it and ensure reasonable growth. Conduct thorough due diligence before making any investment decisions.
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