Preferred property options for first time buyers

There is a broad distinction between first time home buyers and second time buyers. First time buyers shall be making such a huge investment for the first time in their life which is why they invest a lot of time in researching the market. Unless extremely lucky, it may be the only asset of this scale, they purchase which is why they take into account every possible information before making a decision.

  

Studies have revealed that there are certain recurring traits among first time home buyers across different cities. Some of these recurring trends have been explored below:

First time buyers prefer purchasing apartments:

      Roughly 7 out of 10 first time buyers prefer purchasing an apartment over row houses or builder floors.

Apartments are cheaper and provide all the amenities that are needed to live a good life. Home buyers of Tier I and II cities prefer purchasing apartments mostly. Usually home buyers prefer buying 2 and 3 BHK properties.

         Preference for ready to move in properties over under construction ones:

This can be considered to be paradigm shifts in terms of the buyer’s psyche. Even some time ago, first time buyers preferred buying under construction properties because they were less expensive. However, most buyers prefer to buy ready properties because of delays in under construction ones. A lot of first time buyers also prefer to buy houses in communities which are under construction but offer possession within 2 years. Ready to move in properties offer rent saving and tax deduction up to Rs 2 lakhs per annum on the interest paid on home loans. The only issue with ready to move in properties is that they are more expensive compared to under construction ones. However, buyers are willing to go that extra mile.

       End usage is the dominant cause behind property purchase:

Usually first time buyers prefer to purchase an apartment for living in it rather than subletting it for rental income. First time buyers usually live in rented accommodations which they want to give up when they buy a property. Only a handful of first time buyers prefers to buy properties for subletting it to others or earning capital gains from it or tax benefits.

       Property purchase is for families rather than self-occupation:

First time buyers usually prefer to buy properties to live in with their families. They would rather buy apartments or houses with multiple rooms to accommodate the 3-5 members of the family. Only a handful of people prefer buying single room apartments for self-occupancy.

       Location and pricing are the two most important considerations for purchasing a property for first time buyers

Prime locations and budget are the two most essential points which are considered by first time buyers. Surveys have revealed that price is the top most consideration while locations came close second. Other parameters that a first time buyer must consider is connectivity to different areas via public transport, builder reputation, closeness to work, social amenities and size. Home buyers essentially look for properties in India which are closer to their preferred location, within limited budgets. It can be seen that over the past 10 years, that capital appreciation has been seen in areas which are well connected and close to prime locations more compared to other areas.

Want to Sell Your House? Know the Tax Implications!

The first budget proposed by the finance minister after the ascent of the new government at the center has had several changes in income tax laws with respect to capital gains accrued from the sale of property. The finance minister has capped the amount that can be saved from taxes through investment in capital gains of longer terms for sale of property in specific bonds, also termed as capital gains bonds. The finance minister has also specified that investment must be made on residential properties located in India for availing benefit of longer term capital gains.

According to current rules of income tax, capital gains in the long term accrued from property held for 3 years attracts 20% tax. Exemptions have been granted under specific conditions. However, some of the changes proposed for income tax laws seek to overturn a couple of these laws. Some of the changes proposed are as following.

Exemption of capital gains tax on housing property

According to current tax provisions, longer term capital gains that come about from a capital asset’s sale is exempted under Section 54/54F in case it is invested in construction or purchase of housing property, subject to specific conditions. For gaining exemption on capital gains, an assesse must purchase a new house one year below or 2 years post transfer of the original house. For the properties under construction, the construction must be completed within 3 years from the transfer date of the original property.

The finance minister has clarified now that investment for availing benefit of capital gains must be in residential housing property located in India and not abroad. The amendment shall apply for the assessment year of 2015-16 and following years.

Availing exemption on long term capital gains by investing in bonds

A lot of investors who sell off properties, save taxes on longer term capital gains through investment of capital gains amount in specific bonds, also known as capital gains bonds. Tax payers who wish to claim these exemptions from longer term capital gains must invest the sum in capital gains bonds within 6 months from the sale date or prior to filing of income tax returns, whichever comes earlier. The benefit can be availed from Section 54EC of Income Tax Act of 1961 till a capping amount of Rs 50 lakhs in a particular financial year.

The ministry of finance has clarified now that total exemption with respect to long term capital gains for investing in capital gains bonds would be limited to Rs 50 lakhs. The amendment shall be applicable for the assessment year of 2015-16.

Advance acquired for property sale and its forfeiture

The finance minister has proposed to levy taxes on advances received and forfeited later by individuals for sales of capital assets such as flats in case the transaction falls through. If negotiations do not translate into capital asset transfers and money charged as advance is forfeited by an assesse, then the sum shall be taxed in the assessment year under “income from other sources”. Under current provisions, the amount may be reduced from acquisition cost of an asset subsequently in the sale year of the capital asset when determining capital gains. This amendment shall also be applicable from 2015-16 and subsequent years. 

Transforming home buying experience

Home buying experience has been much simplified compared to what it used to be even a decade ago. No more do home seekers have to rely solely on brokers to locate the best properties within their budgets. Real estate websites provide a holistic solution to home seekers in netting their dream home within an affordable budget.

Real estate websites not only work as property consultants, advising you about the different profitable residential communities coming up within the city, but also accompany you for site visits and help you with the paper work. For instance, on IndiaHomes, more than 600 employees work collectively to make home buying a pleasant, fruitful and hassle free experience for home seekers.

As a buyer or investor, you should look for the parameters to choose the best property available within your preferred location(s), budget or specification(s). Consider the nearby projects, the profitability of investing in certain areas around the city and similar factors. Home buying may be a personal affair, but there is no harm in trying to find out the best value of your selected property. You can also participate in the discussions being held on several websites where people share their myriad home buying experiences. You could take a tip or two from their experiences to ensure that you get the best option.

To transform the experience of buying a property, you can register your name, mobile number and other details on the website. IndiaHomes provide a 5 minute call back facility to discuss your requirements. They will explain you the pros and cons of the residential community. Not only will they help you in selecting the right property, but also in getting your loan approved at the lowest possible interest rate with a feasible repayment plan.

Reputed real estate websites often give special offers on occasions. For instance, IndiaHomes offered to pay Rs. 1 Lac to select home buyers on completing 5 years in business. Recently, the company conducted a real estate sale for buyers to pick the best properties in India as per their budget. 

If you liked this, you may also like to read.

What’s bringing the investors to the Indian real estate market?

How & when should you start planning for buying a home?

How to select a holiday Home

You can buy a holiday home as a getaway apartment for your family to spend the weekends at it or you can simply rent it out to other vacationers as and when required. Nevertheless, you must bear these points in mind before buying a holiday apartment for yourself. 

Planning Ahead

The decision of purchasing such a house is a big financial commitment. It is important that you take into consideration the requirements of your family and whether you are choosing a house which you will enjoy visiting in the coming years. Most buyers have to take some kind of financial assistance when they decide to buy holiday homes and hence you should start thinking about mortgages and the affordability of the property in terms of maintenance cost. A holiday house can also be treated as an investment for the years post retirement. 

Attracting Vacationers

You should always seek the advice of a property consultant when you make the decision to purchase a specific property. You have to gain knowledge about the property market in the destination along with the tourism industry of the area where you are thinking of buying a property. For instance, some areas attract tourists only during winters or summers and you have to raise your maintenance costs and profit only within that time frame. You need to think of the kind of people who will be visiting the destination and what their needs might be. If you can match the property type with the needs of potential tenants, you will be able to reap enough profits to see you through the year. Usually tourism is down during school seasons or the monsoons (unless it is Khandala and Lonavala) and hence you have to account for the loss income when tourists do not go visiting.

Safety and Insurance

All rental properties have to obey to different safety standards. If guests become injured or sick because of unsafe environments, you may be facing a potential lawsuit in that case. All gas and electrical appliances have to be checked regularly and maintained so that they are safe enough for use. Your property should also conform to regulations of fire safety. 

As an owner, you also have to buy insurance for your property, irrespective of whether you are looking to let it out. If you are buying a house for personal use and want it in a location which is secluded so that you are away from the maddening tourist crowd, you should invest in CCTV cameras and sophisticated alarm systems for the safety of the property as houses which are away from the hustle and bustle of the city centre tend to attract burglars and intruders.

You may also read: Things to remember while selling your home

Why should you consult a property advisor before buying a home

Buying a home is a big responsibility. For most, it is the biggest investment they make in their life. Since it is your biggest purchase, shouldn’t you pay as much attention as possible to getting it right? You should enquire as much as possible into different localities, property rates, and possibility of price appreciation, social fabric, connectivity, loan approval and much more. However, it is not possible for most to get all these after balancing a full-time job. This is where a property advisor steps in.

Property advisors typically have been dealing with real estate in a city and they know which areas one should invest in. They have all the information regarding different properties that are being built in a city, the property rates that are prevailing in a particular area, the brokerage that shall be charged for a house, the stamp duty and registration fees among other things. Property advisors would be able to guide you correctly about the kind of property that is suited for your requirements (proximity to work place, easy availability of different amenities, good civic infrastructure, reliability of a particular developer, prospects of future growth and much more). Property advisors would accompany you to see different properties and point out the benefits or flaws of the property. S/he would also assist you with getting your loan sanctioned from the bank. A lot of property advisors have good relations with bank managers and they can get you the best bank rates and the most flexible repayment plan.

Most buyers nowadays consult property advisors because they need not worry about finding the best property for themselves as the advisor takes it upon him or her to get it done. You can get in touch with a property advisor online or off it. The fee charged by property advisors is almost nominal, compared to the services offered to you. 

Before you hire a property advisor, you must look into his/her credentials and ensure reliability and trustworthiness. There have been several cases in the past where home buyers relied on property advisors who turned out to be fakes. Make sure you hire the services of a property advisor who has been recommended by a friend or relative. Many sales agents of different property developers pose as property advisors and push unsuspecting home buyers into buying properties which may or may not be as good as some of the alternatives. Therefore, you must always check the registration number of a property advisor before dealing with him. You can also hire the services of property advisors who work with reputed websites. Some websites themselves work as property advisors and help you with your investment to make the most.

The demand for property advisors is steadily rising because of their professional approach to the task of home buying. If you have hired the best property advisor for yourself, you can rest assured that you will get the best of services for property India. It is quite a small sum to pay for the services that you will be receiving.

You may also read: Real Estate Investment Guide for Metro Cities

Buying Property in the Suburbs: A Guide

Most people cannot afford to buy properties in central business and commercial areas of cities for the sky high prices that they command. Since people have to move out to the suburbs, city municipalities and state governments have started providing the necessary infrastructure for living in these areas. Builders too have started prestigious projects in these areas for their potential of development in the near future, demand, low cost of production and availability of large land parcels. 

When you are moving to the suburbs to buy property, you need to bear certain things in mind that you would not when buying property in prime locations of a city. Here is a guide that you may follow when buying property for sale in suburbs.  

The area where you are buying property

When you choose an area where you want to own property, you need to decide future developments that would be possible along with capital appreciation (assuming you are buying for end use). For example, the Bangalore International Airport is situated in North Bangalore and hence areas close to it are benefitting largely. Similarly, Ghatkopar in Mumbai has been connected to the central business area of Versova which has elevated the price of property in Ghatkopar.

After considering the scope of capital appreciation in the area, you should think of the civic and social infrastructure available. Are there proper arrangements for sewerage? Do all the existing houses receive uninterrupted water and electricity supply? Are there good schools and colleges in the area? How far are the grocery or departmental stores from the neighbourhood?

Having these amenities near your residence would be a big boom because you would not have to commute much to get your needs fulfilled.

      Quality of the Property

Even though properties for sale are less expensive in the suburbs, there is no reason for them to be of inferior construction. The quality of construction is of utmost importance because you will be living in the apartment for the next 10 to 20 years at least. To make it hardy and durable, the construction materials need to be good. Inclusion of features such as power back up, backed up water supply, earthquake proof construction etc. need to focused upon by you.

 

      Builder’s Sincerity

A background check of the builder is of utmost importance when you are buying properties in the suburb. Is the builder not timely with his delivery of properties? Are all the amenities that have been promised being delivered? Have all the necessary clearances been obtained by the builder from the municipal corporation and other authorities? These are some of the questions that you must have clear answers to. 

If the builder has developed another property in the vicinity, don’t hesitate to approach the residents of the community to find out about the builder’s work ethics. 

      Your Neighbours to Be

Your well being is much dependent upon how your neighbours are. If your neighbours are not cooperative about maintenance of the society or organization of meetings, then the quality of the building would deteriorate with time. Moreover, the status of your neighbours are also very important. If your level of income and expenditure does not match your neighbours, then you may feel like a sore thumb.

Most of the development of housing real estates are being carried out in the suburbs. By following this guide, you can find a good property for sale for yourself.