Home Buying Woes and their solutions

Dec 20 2018

Deciding to buy a home soon? You might want to read this article until the end!

Home buyers in India are faced with several hurdles that if not skipped in time can cause the home possession really messed up. If you are going to make your first real estate purchase, these are some points of note, you must bear in mind, to make the transfer as smooth as possible.

You should also take care of the fact that between the time of you making the payment and getting the house registered to your name, there are several laws that operate separately for you, the buyer, the seller and the lender. Hence, prerequisite knowledge is a must.

1. Loan it Right

We feel this is a mentionable point as most of the home buying transactions in India involve some amount of loaned money. If your loan amount makes up 25% or more of the total property value, you must choose the loan scheme very carefully.

It is advisable to consult a property broker or a loan officer who can guide you through various loan products available in the market.

In India, about a significant majority chooses the wrong loan plan for them. In some cases, people settle for the initial low rate of interest and sometimes they take the loan for too long a tenure. All of these mistakes can land you in wastage of money in future and can make it hard for you to pay off the loan as you plan to.

2. Inspect the house comprehensively

This might feel like an obvious fact but it is egregiously important to inspect the house once before finalizing it. In many cases, people try to pace up the transfer process in order to discourage you from inspecting the house thoroughly.

This can leave you in discomfort later on. If there is a fault with house’s roof, electrical wiring or drainage, it will continue to haunt you for a long because these are hard-to-fix problems.

So, make sure you inspect the house thoroughly. You may hire an inspector as well, who will make it a lot easier for you to peacefully finalize on your favorite home.

3. Don’t Under-estimate your budget

This is a big woe that comes in the shape of merry news. Sometimes, loan lenders or financers give you a green flag for properties that are evaluated at a much higher price than your ITR depicts.

You are bound to rejoice this situation and quickly sign-up in haste. But stop right there. Don’t underestimate your budget just because you are getting a bigger amount sanctioned. Calculate your income capacity accurately and settle for the EMI amount that doesn’t get in the way of your income.

4. Avoiding a Real Estate Realtor

For many people, the teeny bit of realtor’s fees seems like the most avoidable thing in the world, but it may become a loss of lakhs of rupees.

If you are a new to home buying, the realtor is your best friend. Realty firms help you at several stages of the deal. You being the buying party can’t rely only on the seller’s agent.

No matter what, at the end of the day, the seller’s agent will act for his client’s profit, which is why having a consultant at your end will help you dodge any petty trick being played on you from the seller’s side. This happens a lot in the real world and you must prepare for it nicely.


Pros and Cons of buying a home in Mumbai!

Dec 18 2018

“Mumbai is infectious. Once you start living in Mumbai, working in Mumbai, I don’t think you can live anywhere else.” -Yash Chopra.

I find this quote very true!

It connects to all the Mumbaikars out there.

From being the habitat of the most expensive residential property of the world, Antilia, to being the hub of unbelievably cozy places, Mumbai has it all.

Well, I would say living in Mumbai is adventurous and transforming.

Trust me, Mumbai is sorcerous.

Getting to the point here,

This article is targeted for the people who are looking forward to investing in Mumbai’s real estate anytime in the future.

And, even if you haven’t thought about it, you still can evaluate the pros and cons.

So, here we go…

Pros:

1. Amazing Return on Investment:

Mumbai is one place which still has a huge influx of people from across the country. Hence, prices increase constantly every year.
Not so much. But, still.
Therefore, if you plan to make an investment, do that in Mumbai.
The rental rates are high, plus, after 3 years you can sell the property of and get great benefits.
Mumbai is the best city in India for commercial real estate investment, with returns of 12-19 per cent likely in the next five years, followed by Bengaluru and Delhi-National Capital Region (NCR). 

Recommended post: Reasons to buy a property before 2017 ends.

2. Excellent Exposure and is safe:

When the talent is driven into the city from across the country, there is indeed, huge exposure.
With the establishment of IT industry, and being a Bollywood hub, Mumbai became a magnet attracting thousands of people every year.
Whilst, the city is rather safe, one of the reasons is the great police and even, there is great awareness among people. Moreover, the city never sleeps!
Mumbai shows 17% of vacancies approximately in office market according to a survey.
And, the city is well connected as well.

3. It tops the list of best places to invest in properties:

In terms of both commercial and residential properties, Mumbai is the best.
Having to be stuffed with opportunities and talent, the city can bring great boons.
Mumbai is one of the biggest hospitality markets in India.

Cons:

1. High living cost:

Well, it is expensive.
You can say a lot.
But, I believe it gives the person many opportunities to carve a decent living.
The average cost of living in Mumbai ranges from 23000 INR to 50000 INR.

2. Traffic:

Traffic, pollution, and population are some interconnected problems in the place.
However, this is an issue with every place of this country. Whilst, Mumbai being the city of dreams makes people addicted to it.
Pollution index of the city is 86.70% according to a survey.

Must ReadReasons for not purchasing a property.

3. Hot and humid:

Because, of the Indian ocean, Mumbai has a weird climatic condition. Wikipedia has provided a detailed description of the weather of the city, Mumbai.
Some people find it difficult to adapt it.

Conclusion:

In my opinion, there are cons to everything.

Wherever you establish a life in, you definitely need to make some adjustments.

To improve your odds, you can rather make that huge investment worthy. Focus on what matters and your personal priorities!

Subscribe for more such articles, on real estate investments and updates. You wouldn’t be disappointed for sure.


Moving to Mumbai? 5 Tips to select the right location to rent a house in Mumbai

Dec 17 2018

When moving to Mumbai, the most important decision is to identify the location of your new rented accommodation, irrespective of whether you are moving with or without your family. Many professionals locating to Mumbai without family assume that they can crash land and survive anywhere in this city. But the equation is not so simple especially when it comes to settling in the Maximum City.

Before you start finding and shortlisting apartments on rent, here are some do’s and dont’s which we hope helps you in making the right decision while selecting the location.

Conveniently Commutable Distance From Rented Apartment To Work

Where is your work location? Is it in South Mumbai, Western Suburbs, and Central Mumbai? You can find flats on rent in Mumbai anywhere and everywhere, but consider daily commuting that will become a part of your life as a Mumbaikar from the day you join your office. Choose a location which is closer to work so that you can save your energy and travel time. If rates are higher than your allocated budget for rented property, then you can consider settling down in the surrounding areas. For example, if your office is in BKC, you could find accommodation in Bandra East, Tilak Nagar, Kalina,etc.

Easy Access To School or College

While you would travel to work, if you are moving to Mumbai with your family, then your kids would travel to school or college. There could be a trade-off between the proximity of your rented premises to your office vis-a-vis how close you want your home to be to the college or school that your kids would be attending in Mumbai. But the point is same- travel time.

Picking The Right Neighborhood For Your Rented Accommodation

Find out how safe is the neighborhood for you and your family. In Mumbai, within the same area, you will notice that sometimes even within the same locality or area, the world changes between two lanes. So it is advisable that you personally go with your real estate agent and take a quick scan of the immediate neighborhood yourself. Other than safety, check the facilities and infrastructure available in that area including but not limited to healthcare, shopping, restaurants, entertainment, etc.

Finding The Right Rented Place At The Right Rate

It goes without saying that do your due diligence in identifying the running rental rates in and around the residential areas which you shortlist. Hire a trusted real estate consultant who would educate you about the city. Alternatively, you may also check the reckoner rate for those areas. Reckoner rate is an official rate varying with areas, properties,etc and it serves as a good benchmark for property buyers and sellers.

Good Connectivity With The Rest Of The City

This point overlaps with first three points- proximity to work, education centre, entertainment, medical facilities and shopping centers to say the least. But since we are talking about Mumbai where travel time is not calculated merely by distance but also by judging the state of traffic and time of the day, so we think connectivity deserves a special mention here. Local trains are the lifeline of Mumbai, but at the same time it is not everyone’s cup of tea and especially not so easily acceptable by outsiders moving to Mumbai. Unlike Delhi, Mumbai goes straight, so does the road connecting one end to the other along the coast. Roads are not very wide as one would expect from a flourishing metro, hence frequent traffic jams. So connectivity is an important aspect which you must evaluate before you sign the rental agreement with your new landlord!

Conclusion

People moving to Mumbai must consider short listing the location even before looking at properties on rent. Take help from your property broker to understand the city and at the same time explain him the types of residential areas you would prefer. That along with the proximity to work and other facilities must be considered well before even you start meeting prospective landlords.


Residential & Commercial Investment- Which is More Profitable?

Dec 17 2018

Before analyzing whether to invest in commercial or residential property, it must be understood that property is a long term investment. Any investment which is done on long term horizon must provide for at least two things:

1. Regular Income

2. Capital Appreciation

Residential Real Estate

Over the past decade or two, investment in residential property has given high capital appreciation while fetching very poor annual rental returns. Residential rental returns are in the range of 2.5-3% pa while bank interest rate is 8-9%. But whether investment in the coming future will continue to fetch high capital appreciation is a big question mark. With rentals remaining poor in residential property, it’s doubtful whether investment in residential property will remain attractive.

Residential Market in 2017

The growth in housing prices has slowed down for the sixth consecutive quarter in India if one considers the RBI’s housing price index which was recorded with lowest growth in 2016-17. If we look at Mumbai in particular, Knight Frank published a report in July 2016 according to which although housing project launches have been at 3-year low in top 8 Indian cities because of huge unsold inventory, but 29% increase was posted for new launches in Mumbai in this period.

Commercial Real Estate

Commercial property being barometer of economy follows the economy indicators. Weak economy results in subdue property prices resulting in poor capital appreciation. But commercial rental returns are relatively better @ 6-7% though lower than the desirable rate of 8-9%. This scenario seems to be changing with new laws and investment instruments like REITs being put in place. With economy also expected to show upturn, it’s expected that commercial property will give better rental returns with reasonable capital appreciation possibilities.

Commercial Market in 2017

Demand for Grade A offices has increased in prime Indian office space markets including Mumbai’s Bandra- Kurla Complex, New Delhi’s Connaught Place and Bengaluru’s MG Road. In fact, HNIs and rich investors are increasingly showing interest in high-ticket office space in India which gives them high rentals and good appreciation. Low vacancy rates in these prime markets are expected to cause further growth in rentals.

To conclude, in the coming time, it may be better to invest in high quality commercial property.

As compared to commercial spaces for retail, residential investments are:

  • requires relatively lesser investment quantum
  • less risky
  • considered more liquid within a shorter period of time and
  • calls for lower loan interest rates

About Spacio

Spacio Realtors is the Mumbai residential and commercial property specialist. The company’s core function of Buy-Sell-Rent is accompanied with consultation in real estate investment opportunities, managing client property investment portfolios and even tax & legal advice on property related matters. 


List of important Documents for Buying a Resale Flat

Dec 15 2018

Have you identified the most important set of documents that you need to buy a resale flat in India?

Have you had trouble finding out from where to procure these documents and whether they are mandatory to proceed with the deal to purchase the resale property?


In this article, I’ll list out the legal documentation requirement that a home buyer must add to his or her priority checklist and also communicate to the selling party so that there are no delays in the transaction.

1. Chain of all sale deeds

  • Significance: To trace ownership of the property.This document evidences sale and transfer of ownership of property in favor of the buyer, from the seller. It acts as the main property document for further sale by the buyer as it establishes his proof of ownership on the property. It is normally executed after execution of sale agreement, confirming that terms and conditions detailed in the sale agreement as agreed upon between the buyer and the seller are complied.
  • Mandatory
  • It is registered in Sub Registrar office in whose jurisdiction property is located and register it within 4 months from the date of execution.

2. Share certificate

  • Significance: It indicates membership of the current original owner in the society. Subsequent transfers are endorsed on the back of the share certificate. As per co- operative laws, the ownership of flat is identified with share certificate. Its the membership of society which gives right of ownership and occupation of the flat. It is the most important document to signify the ownership when buying a resale flat in India.
  • Mandatory
  • It is issued by the society in favor of the current original owner. If lost, a procedure as laid down in the Co operative by laws has to be followed like indemnity, newspaper public notice etc.

3. Bank clearance letter in case property has any bank loan

  • Significance: If you have taken a loan against the property than all the original documents relating to the property are kept in custody with bank. While selling such property, clearance letter is required from bank which is issued with conditions that specified loan of the bank has to be cleared before the original documents are handed over to the new buyer.
  • Required, if you have taken a loan against the property you are selling.
  • This letter is obtained from bank. If lost, it can be re issued by bank.

4. NOC from society

  • Significance: To certify that the society has no objection to transferring the share certificate in favour of the potential purchaser is needed if applicable. Any sale without NOC from the society may not be acknowledged by the society and raise complications in transfer.
  • Mandatory
  • It is issued by the CHS.

5. Title report

  • Significance: To ensure that compete chain of earlier sales are properly registered and if any government lien is marked on property. It is a report, not a legal document.
  • Not mandatory. Important especially in large ticket size deals specially relating to land.
  • Tittle search is taken from Registrar’s office.

6. Occupation certificate

  • Significance: To certify that the building has complied with the approved plans. Once the building is complete, the builder has to obtain an Occupation Certificate or OC.
  • Desirable. Property without OC is vulnerable. The property is not officially recognized and termed illegal by local authorities.

7. Car park

  • Now, builders have stopped issuing separate allotment letter of car park as its not legal to sell car park. But it is important to take confirmation of car park.

8. Municipal approved floor plan

  • Significance: It is full plan copy (floor plan) of that building and the wing you planning the purchase. It gives an idea about surrounding and spacing.The property one is buying must match with the approved plan.
  • Desirable

Round-up: Remember, you don’t want to get stuck with a property for the rest of your life that doesn’t have clear title or any other missing legal document that prevents you or your children from reaping the benefits in the long run. Due diligence is required when buying a property, but instead of getting overwhelmed by a long list of paperwork create your document checklist or hire a property consultant to guide you for the same.

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Before You Buy a Property

Dec 15 2018

Tips to buy a Property

It is a major decision for everyone. So it’s imperative that the decision to buy property is well informed and adequately researched. More so, in Indian context, where the real estate sector is inadequately regulated and opaque.

As one start looking around without structured parameters, the confusion compounds.

Below are some major pointers on which one must deliberate before buying a property:

OBJECTIVE….SELF USE OR INVESTMENT

The first and foremost thing that one must be clear about is that purchase of property is for self use or pure investment. Because if the decision is, let’s say, for investment, only then the location or area doesn’t matter as much as the builder, delivery, scope of capital appreciation, rental values, hidden cost etc. matter.

BUDGET

The most obvious point to consider in any purchase is ‘What’s my budget to buy property’. Market is full of options. Before one goes out scouting, it’s important one has fair amount of clarity about the money one wants to invest in property as it would reduce confusions, impulsiveness and also help in sound financial planning.

AREA

After evaluating ones needs & desires, it’s important to limit range of area where one shall like to buy property especially if it’s for self use.

LOCATION/NEIGHBORHOOD

Once area is decided, one must now further short list the location by looking at it’s neighborhood (Slums is major issue in Mumbai) and infrastructure in terms of connectivity, safety, markets, school, medical facility and future development plans etc.

NEW/OLD PROPERTY

Both old and new construction have their own set of plus & minus in terms of quality, amenities and price. Also urgency of need is important factor in case one looks at under construction property.

BUILDER

It’s important to know who is the builder of the particular chosen property. It’s important to do background check of the builder because quality of construction and commitments depend on builders’ reputation. Reputed builders will always command premium. But that premium remains always attached to the property.

PROJECT TYPE …CLEAR/SRA/MAHADA/PUBLIC CAR PARK/ GOVT WELFARE SCHEMES

The type of project has lot of bearing in terms of pricing, infrastructure and neighborhood. Clear plot project will always command premium and is worth it.

TITLE

Before making the final decision, one must look at the title of property and whether all Govt. approvals are in place. It’s always advisable to take a legal advice though it may have some cost.

Related PostDocuments required to buy a resale flat

DELIVERY

Especially in under construction or new projects, delivery is an important factor. Giving a grace of few months, the property must be deliverable as per schedule. Delivery overrun also has adverse impact on cost of acquisition in terms of cost of funding etc.

FUNDS TIE UP…LOANS

One must ensure that funds to buy property are fully tied up and well planned.

SCHEMES …EASE OF PAYMENT

Now-a-days, property developers are offering attractive schemes of payments. One must ask and check such schemes but ensure that they are genuine and not sugar coated pills which ultimately harm the buyer of residential or commercial property.

HIDDEN COST

Buyer must read the property deal in detail and minutely to check it doesn’t have hidden costs and restrictions in term of maintenance, transfers, escalations etc.

MONTHLY MAINTENANCE / RECURRING COST

It’s good to know beforehand what’s going to be recurring cost in terms of property taxes, maintenance and society rules etc.

Do you have any query…….. We shall be happy to help you.

Next Finding a reliable real estate agent


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