Investing in Property Real Estate has been a significant part of the wealth of Indians since ages. Channelizing the hard earned savings in real estate is a very common phenomenon in India. Property in India provides a good inflation hedge with returns going above 20% annual growth in many cases, especially in land. Let us take a look at a few aspects of this industry. Thumb rules while investing in a property 1. Invest in a region where the Government (State or Central) is carrying out development activities which include industrialization, improving connectivity by road, rail & air, promoting institutions like colleges, schools, hospitals, training centers, etc. Industrialization by the private sector plays a vital role in the development of a region which again depends on how lucrative the Government policies are. A region which attracts the above mentioned development activity is usually shielded from the economic cycle and the real estate cycle of the country/ state. The land price in such region grows exponentially as long as the development is taking place. 2. Another thumb rule in Real Estate is to “time-in the market” rather than “timing the market”. That is, the duration of your investment is more important than figuring out the right time to invest. Real Estate is a long term investment and one must have patience while investing in this asset class. Importance of a Real Estate Consultant People spend years to save money for investment but fail to understand the importance of consulting an expert for investing decision. Purchase of a property requires complete understanding of the area, legal knowledge, market research, developer background and expected returns. There is no denying the fact that a thorough research in all these areas could be carried out by the investor himself but asking these questions to a professional consultant, who has proved his mettle in the past, could provide insights in the areas which otherwise would not have been visible to a common man. Real estate consultants with proven integrity can help the investor take informed decision for better returns. The utility of taking advice from an expert advisor includes: 1. The consultant’s knowledge, experience and network in the field would enable him/ her to negotiate well with the developer on your behalf and hence would get you a better deal. 2. A consultant would provide you with various services such as completing the formalities regarding the investment, which becomes even more crucial when it comes to installments to be made over a period of time (in case of construction/ development linked payment plan). This spares the investor the hassles of communicating with the developer for petty matters such as collecting/ depositing the cheque, receipt of the payment, documentation, registration formalities etc. 3. The consultant would do all the ground work on your behalf such as making the comparative analysis, checking the legal status/ title of the property & background of the developer and rationally projecting the scope of growth in your investment. 4. If you are buying a property purely for investment purpose, the resale of the property plays a vital role in finalizing an investment opportunity. This can also be facilitated by the consultant. Infact, while buying the property, one should demand the responsibility of resale from the consultant and discuss a target month/ year for the same. Future of Real Estate in India Real Estate in India has a bright future given the huge investments required in infrastructure in the country to create a place in the global market. A few other factors which will drive this industry in the country are increasing purchasing power, growth in university graduates, FDI in various sectors, increasing percentage of nuclear families, improvement in quality of lifestyle and industrial growth among others. Real Estate is a cyclical industry but if we follow the thumb rules mentioned above, we can reap the rewards on an ongoing basis.
Posted on: Fri, 09 Aug 2013 21:59:22 +0000