Investors who act in haste are more likely to make erroneous decisions which adversely impact their investment. So, what are some essential things one must be wary of when investing in real estate? How to avoid Real estate mistakes? We have curated some pointers for you, which will help you avoid mistakes while investing in real estate. No matter whether you want to invest in property for personal use or with the sole purpose of earning returns from it, these tips can help you prevent common mistakes related to real estate investments.
Speak to seasoned investors, and they are most likely to advise you on the merits of real estate investments. So, what makes real estate investment advantageous and desirable, and why does anyone, who knows anything about finance advocate them? The answer is simple. Real estate investments are safe; they appreciate manifold in a short time and also offer immediate returns on investment, through lease/rent.
However, some folks believe that real estate investment is not for everyone. Builders and developers in Kerala maintain that it is primarily because naive investors lack the prudence to make wise, informed choices.
Rushing the deal is perhaps the most typical mistake that people make when investing in property. Buyers are in a rush to get the property of their dreams, and sellers are equally eager to make a sale. But, there are consequences for rushing through the process. Avoid being too keen to sign on the dotted lines; take your time, look around, there may be something waiting to be discovered. For instance, you may unearth some crucial information regarding the property that could jeopardise your investment at a later date.
Not going through a lawyer
Often people just go by the reputation of the builder and fail to have the land documents examined by a lawyer. The property could be under litigation or illegally gained. Investing money in such a deal would unfold untold hassles. Have the property’s Mother Deed examined by a legal expert, as it is the most critical legal property document.
Failing to check licenses and clearances
Property papers include approvals and licenses issued by authorised Government agencies. These documents give clearance for the builder to develop and sell the property. Ask for these documents in originals to be sure that everything is legal and in order. The property should have permission for development, or else it can be confiscated and/or demolished at any time.
Failing to research
You must do thorough research on the property before buying it. Here are vital things that should be researched:
- Location: Does the property have the infrastructure suited for a residential area— look for educational institutions, hospitals, shopping malls, well-planned roads etc. Is it close to the city or far away from civilisation? How is the surrounding area? Check for the garbage dump, burning ghat, open drainage canal, shanties and slums and other such factors that could depreciate the value of the property.
- Builder’s credentials: Is the builder reputed? Does the builder have a history of failing to do the handover on time? Also, check projects completed by the builder, so you get an idea on what to expect, in terms of quality.
- Construction: What kind of structure will it be? Is the builder using a new, previously untried technology? How many floors and how many apartments on each floor? How many buildings? What about the amenities?
- Miscalculating costs: Do a proper analysis of how much the property is going to cost, including doing up the interiors, and miscellaneous, mandatory property-related charges, such as registration etc. You do not want to end up spending more than your budget.
Not being picky
Be choosy when buying property; there is value in small details. Which side does the apartment face? Keep in mind that an apartment opening into the western side will receive sun throughout the year. Would you like that? Is the apartment right on the boundary wall? Will the traffic and pollution disturb? Which location should I choose? Should I prefer flats in Trivandrum, or Kochi, or in Bangalore ? Be selective, so you can have a problem-free home, to call your own.
How are the water supply and sewage?
Will the corporation supply water, or will it be groundwater? Is groundwater in the area portable? Will the housing society have to buy water to meet the demand? What about sewage—are sewage lines laid and connected? Will the housing society have to operate a sewage treatment plant (STP)? These things may not seem important enough, but you will realise their significance later because both water and running STP cost money, and you will feel the pinch when you have to pay for them, month on month through the maintenance charges.
Ignoring small details
Ignoring the small details in the contract can cost you dearly. Ensure that the clauses in the property papers are fair. You do not want to sign property documents that support the builder. You do not want to fight a legal battle with the builder.
Being too trusting
Avoid trusting others’ words on a property, instead consider doing your groundwork and invest only when you are satisfied. Do not buy a property just because your relatives, friends or colleagues have invested in the same. Also, avoid falling for the sales pitch that the marketing personnel make, trust your judgment.
Investing too early
Wait for an opportune moment to buy a property. Most builders offer special deals, so wait for that to happen. It could be any one of these offers— discounted price, free club membership, free parking space, no registration fee and complimentary interiors or appliances. Make use of these offers, which are generally publicised, and you can save a neat sum.
Not negotiating price
The per square foot price that builders quote is often negotiable. Bargain, and you will get a good deal.
So, remember, it boils down to being prudent. Be careful about every detail, no matter how insignificant it may seem. It will save you a great deal of distress and guides you to avoid real estate mistakes.
If you are looking forward to any commercial property, flats or villas for sale in Kerala, reach out to Skyline Builders to help you find the right property at your desired price and location..