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Tips for buying properties in India
29 / Nov / 2020
Tips for buying properties in India

Tips for buying properties in India. 

The reason you should go ahead with reading this is because.. This article gives you an insight from both seller and buyer perspective of buying a property. Some may wonder why there is a need to know tips from a seller perspective, As they are the people making the profits. Here’s why considering seller perspective is also important while making a purchase of real estate property.

 A seller before pitching the idea must educate himself of both the Pro’s and Con’s of the property he is dealing with. Hence, it is an advantage to know what the seller’s opinion is about the property as there is no one better to keep you better informed rather than a person who learns about properties for making a living. 

 One of the most important questions to be asked to the seller is the quality of construction! This is what determines the worth of your purchase. This cannot be easily judged hence it is mandatory to find an Agent who is trustworthy and loyal.. A person who can give you an unbiased opinion of the property and if in case there is something that makes the property a bad investment it is his job to bring under the light for you.

In this economy when you deal with Purchasing of a property there is a certain some-one called the consultants. These people make sure that they give you an insight free of cost and also help you in getting the best price possible. As these companies are the official RERA Approved Consultants for the projects. These people deal with all sorts of clients with varying budgets. But, the only constraint is that they deal with only BUYING of PROPERTIES. 

These days while investing in a Project people prefer to purchase during the Pre-launch period. The one thing the customer requires is the On-Time delivery of his Home or Investment he has purchased so that his future plans remain unhampered. For checking the authenticity of the builder it is a MUST to check the history of delivery of his old projects which will give you an insight of the History of the builder and the Goodwill the company possesses. 

Lastly speaking about the payment plan. It is very important to evaluate the payment plan offered by the Builders! It must be something that does not turn out to be a burden on the buyers pocket. As we all know buying a property deals with a lot of money being spent initially and also the EMI’s that have to be paid on a monthly basis must also be considered! A lot of properties these days give you a pocket friendly plan where after purchase and payment of the Down-Payment there is a certain grace period they offer before you even start paying your monthly bondage of EMI’s.

 With just considering these mere facts it is possible to make a healthy investment  in the real estate sector . Those being a good channeling partner with brilliant sales executives and a good and thorough research about the project! A few extra precautions may be taken by following these methods of dealing.

After you paid the deposit your lawyer should check whether the seller is the legitimate owner of the property and allowed to sell it. There should also not be any outstanding mortgages on the property. The seller should provide a no encumbrance certificate stating that the property is not already mortgaged.

When all documents are approved they have to be stamped at the Stamp Duty office. You and the seller have to sign them and you have to pay the outstanding sum. Finally, to become the legitimate owner of the property, you need to register with the Registry of Deeds. Your final governmental duties have to be paid now. They include Stamp Duty of between four and fourteen per cent, depending on the region. An additional registration fee has to be paid as well. It accounts for one till two per cent of the property price. There can be occasions where the said person can’t be physically present in India to buy a property, POA(Power of Attorney) is there. What this means is that an NRI can choose someone close to them such as a relative, friend or even colleague and allow them (legally) to complete the transaction on your behalf. However, to get a valid POA you have to visit the Indian Embassy of the city and country where you are located.

In the end, being distantly involved in real estate related activities can put you in a situation to bear losses. Having agents engaged in today’s time is misleading and increases the overall cost of transactions. It is a wise decision to look for real estate developers who do not involve brokers and rather involve channelling partners who have a much more evolved process.

If you’ve ever wondered if you being an NRI can apply for a loan in India? The answer is, Yes!NRIs can avail home loans from Indian banks and financial institutions to buy residential units, whether apartments, row houses and bungalows or land for building a home. Documents needed to process loan applications include salary slips, bank statements, copies of passport, valid visa, work permit, employment contract, work experience and salary certificates and statements of non-resident external (NRE) or non-resident ordinary (NRO) accounts, says Renu Sud, Managing Director, HDFC. “Tenure for home loans to NRIs is up to 15 years, depending on the age of borrowers, their profile and credit worthiness.”

Another query related to an NRI would be that in case he wants to buy a home in the form of a joint venture, is that even possible?NRIs can apply jointly for home loans only if the borrowers are related to each other either by blood or by marriage. “In joint home loans co-borrowers need not be co-owners in the purchased property but all. co-owners of the property have to be joint borrowers,” Says Karnad. 

To get quality support in the area we specialize in you can go ahead and book a site visit right here on our website where we can give you insights about all the upcoming projects that are RERA approved and have a sustainable foreseeable future. 

Happy Buying

2
Impact of Corona Virus on the real estate Market
29 / Nov / 2020
Impact of Corona Virus on the real estate Market

Impact of CoronaVirus on the real estate Market

Corona Virus breakout emerged in Wuhan city of China. China has allocated more than $10 billion to contain the coronavirus. The growth rates due to this virus for numerous countries have been cut. S&P Global Ratings has cut China’s 2020 growth forecast to 5 per cent from 5.7 per cent. Nine out of the top 10 countries in Asia are vulnerable to the virus and they include India. Hong Kong, Singapore, Taiwan, Japan, South Korea, Thailand, Malaysia and the Philippines.  

. India faces a series of challenges due to the coronavirus outbreak. Pharma companies, mobile handset, consumer electronics and automobile sectors in India may witness lower production due to clogged supply from China.

The corona virus outbreak made RBI Governor Shaktikanta Das take note and suggest the need for a contingency plan to deal with the unfolding situation. According to Jimeet Modi of SAMCO Securities, “The overhang of Coronavirus will largely drive the mood of stocks in the short term. Investors are advised to wait and let the market settle down before allocating any meaningful savings to direct equities.”  

It implies that if the global environment remains weak, commodity prices would fall, as is the case with the 20 per cent drop in crude oil prices, which should benefit India. However, India is not immune to a global slowdown. UBS said reports of the virus contagion have contributed to investors’ concerns during its marketing trip.

The report said, “Potential similarities between the Wuhan virus Coronavirus and SARS in 2003 have led many investors to question the extent of the impact on India. At this early stage, we only see a negligible economic impact, but India is not immune. India’s tourism contributed only 1 per cent of GDP in FY19. But, China is India’s third-largest goods export partner ($17 billion; 5 per cent share in India’s exports). Any likely slowdown in growth in affected Chinese cities could result in a further drag on raw material demand from India and thus could drag exports further.”

There is also a Birgitta side to all this havoc that is headed our way.. Economists are of the opinion that the disruption caused by the virus in China could pave way for more foreign investments in emerging economies like India, Bangladesh, and Vietnam as the world looks to reduce dependency on China, the largest manufacturing hub in the world.

Experts feel that India has a good chance of becoming an attractive manufacturing hub given the present situation, provided the government changes some of its trade policies to bring down commodity prices. An example of Vietnam, which has gained a huge growth boost due to higher density of electronics manufacturing, is before everyone.

H Nemkumar, Head – Institutional Equities, IIFL, said that the ill-fated coronavirus outbreak in China has offered India an opening to revive the ‘Make in India’ programme.

According to the Chief Economic Advisor of India, Krishnamurthy Subramanian, the coronavirus outbreak in China provides an opportunity for India to expand exports. India is one of China’s leading trade partners in Asia and has a huge trade deficit with that country.

“Coronavirus hit 789,240 lives with death tolls 37,820 globally.”

“Trump extended US social distancing until April 30.”

“Italy’s coronavirus deaths surpass 10,000.”

“India’s coronavirus lockdown leaves dozens people stranded and hungry.”

In the past 3 months, such headlines have become the first thing we interact with. We have been separated from our friends and workplaces and caged at our own apartments across 199 countries and territories; hopelessly waiting for the day to walk on the streets or enter public spaces.

But, what’s worse is that Coronavirus is not only instilling fear of the ‘End of the World’ in our minds, it is also bringing a major impact on different industries and crashing the global economy. A clarity of which you will get by the time you reach the end of this article.

India, where the economic growth is already set to slow down to a record 11-year-low, the 21-day lockdown would further worsen the situation in Asia’s third-largest economy. As is evident, research agencies are predicting a near-term halt in growth of real estate in India. PropTiger.com data shows housing sales in India’s nine major cities declined by 30% in the period between October-December 2019 as the festive season failed to revive consumer sentiment, which took a severe beating because of large-scale delays in housing projects and increasing cases of builder insolvency.

The Coronavirus spread has further delayed a recovery that might have seemed possible because of various government launched measures to revive demand though right now it doesn’t seem like prices will go down immediately. Niranjan Hiranandani, national president, NAREDCO, states that “Salvaging Indian realty, the second-largest employment generator is critical, not only from the GDP growth perspective but also for employment generation, since the sector has a multiplier effect on 250-plus allied industries.”

The centre in the recent past had announced higher tax breaks and lower interest rates on home loans to make purchases more lucrative, apart from setting up an Rs 25,000-crore stress fund for stuck projects.

If low interest rates (home loan interest rates are at 8% now) and high tax exemption (rebate against home loan interest payment is as high as Rs 3.50 lakh per annum) were going to make a change in the consumer behavior, the Coronavirus outbreak is likely to halt that shift, at least in the near to medium term.

As it is, site-visits by prospective property seekers are becoming out of question for the time being, postponing purchase decisions. “With the Coronavirus pandemic impacting all sectors of the economy, troubles have compounded for India’s realty sector which has been dealing with a ‘challenging scenario’ since the economic and policy reforms were introduced. The slowdown since February-end is apparent; and while site visits are almost non-existent, the decision-making process is hugely delayed,” says Hiranandani.


 

3
Investment Property: How Much Can You Write Off on Your Taxes?
29 / Nov / 2020
Investment Property: How Much Can You Write Off on Your Taxes?

Learn how to navigate the tricky tax laws around investment properties, including ways to save.

There are certain things you can do as a real estate investor to help manage your tax bill and maximize your after-tax return on investment. To do so, however, you need to understand the primary ways in which investment real estate portfolios get taxed. You must also have a general grasp of some abstract concepts like calculating your tax basis, as well as the depreciation of capital investments.

Warning: This article is not going to make you an expert. But it will acquaint you with the basic terminology so you can be better prepared for a meeting with your tax adviser.

Taxation of rental income

The IRS taxes the real estate portfolios of living investors in two primary ways: income tax and capital gains tax. (A third way, estate tax, applies only to dead investors.)

Rental income is taxable — as ordinary income tax. That means you must declare it as income on your tax return and pay income tax on it. Unlike wages, rental income is not subject to FICA taxes.

Your income is everything you get from rents and royalties on the property, minus any deductible expenses. You can’t deduct everything though. You can only deduct mortgage interest and repairs you make that restore the property to its original minimally functional condition. You can’t deduct capital investments like new buildings, additions or renovations. More on these later.

Capital gains tax

The second tax bill you need to worry about is capital gains tax. The IRS taxes you on any net profits you get out of a property when you sell it. If you’re flipping the property and you’ve owned it for less than a year, you pay short-term capital gains tax, which is the same rate as your marginal income tax rate. If you’re in the 28% tax bracket, you’ll pay a 28% tax on short-term capital gains.

If you hold the property for 12 months, you’ll qualify for more favorable long-term capital gains. Depending on your marginal income tax bracket, these taxes could range from 0% to 15%. In every bracket, however, the IRS takes a smaller cut out of long-term gains than out of ordinary income or short-term gains.

Calculating capital gains

You pay capital gains tax on the difference between your selling price in the property and your adjusted tax basis. Your adjusted tax basis in a property is the original cost you paid for the property, plus any amount invested in renovations and improvements (including labor costs on these projects) that you have not previously deducted for taxes.

If you have deductions associated with the property, you subtract them from your tax basis. If your adjusted tax basis is higher than your sale, you have a capital loss. You can subtract capital losses from a given year from capital gains to reduce your tax bill. If you have more capital losses than capital gains, you can “carry forward” these capital losses into future years to offset future capital gains. If you have no capital gains, you can deduct $3,000 annually until you have recognized all your capital loss carryforward.

How to defer capital gains taxes: an intro to like-kind exchanges

The IRS provides an important exception to capital gains taxation, made-to-order for real estate investors: If you own an investment property, you can sell your property at a profit and roll your money over into another property within 60 days without having to pay capital gains taxes at all. This transaction is known as a Section 1031 exchange, named for the section of the U.S. Revenue Code that allows it. You cannot swap your rental property for a personal residence, or vice versa. For this reason, these exchanges are called like-kind exchanges, in that the property you replace it with needs to be substantially similar to what you sold.

The 1031 exchange makes it possible for real estate investors to defer paying capital gains tax, which is another advantage over investing in mutual funds, stocks, bonds and other securities or collectibles. Outside of a retirement account, you have to pay tax on gains in these items by April 15 of the year after you sold them.

Depreciation and amortization

This is a broad concept, so we can only cover the very basics here. When you buy investment property — be it a building, a computer or a horse — the IRS knows that the item won’t stay young and new forever. Over time, the property will decrease in value. Depreciation is the process of claiming a deduction to compensate you for the property’s decrease in value during the year.

Note: You can’t depreciate your personal residence. You can only depreciate investment property. For more information on the process of depreciation, see IRS Publication 946, How To Depreciate Property.

Land, of course, doesn’t depreciate. But minerals underneath the land do. If you are extracting oil or other minerals, or timber, for that matter, from the land, you will account for the gradual loss in value through a process called depletion.

Likewise, when you make a purchase of investment real estate or capital equipment with a useful life of longer than a year, the IRS knows you will be using that property to generate income for a long time to come.

Except in certain circumstances, the IRS does not allow you to deduct the full cost of your investment in the first year. Instead, you must amortize your investment over a number of years. For real estate, you must spread the deduction out over 27.5 years.

Passive activity rules

Again, these rules are complex. But in a nutshell, if you are a passive investor — meaning you are not working day to day in the business of managing your real estate investments — you are subject to passive activity rules. Basically, you can only deduct passive losses to the extent that you can cancel out gains from passive activities. These rules restrict your ability to use passive activity losses to offset capital gains elsewhere in your portfolio. Congress implemented these rules in 1986 to eliminate tax loopholes and abusive tax shelters.

Most individual investor landlords can deduct up to $25,000 per year in losses on rental properties, if necessary (subject to income limitation). Hopefully you won’t have to make use of this provision much.

Property taxes

Expect to pay property taxes to local and county governments each year. Your local government will assess the market value of your property at its “highest and best use” and charge you a percentage of that value every year. You can deduct property taxes against your rental income, though, provided the property tax is uniformly assessed throughout the jurisdiction and is not a special assessment.

Other tax deductions

Watch for opportunities to take deductions for these common real estate investment expenses:

  • Mortgage interest
  • Legal fees related to your investment properties or business
  • Mileage
  • Business use of your home (the home office deduction)
  • Advertising fees

Employees (but if they are working on capital improvements or renovations, you have to amortize their labor costs as part of your capital investment, rather than as a current year expense.)

4
Say What? Home-Buying Lingo You Should Know
29 / Nov / 2020
Say What? Home-Buying Lingo You Should Know

Need a crash course on real estate terms? This glossary will get you started.

DTI, PMI, LTV … TBH, it can be hard to keep all this stuff straight. This lexicon of real estate terms and acronyms will help you speak the language like a pro.

Appraisal management company (AMC): An institution operated independently of a lender that, once notified by a lender, orders a home appraisal.

Appraisal: An informed, impartial and well-documented opinion of the value of a home, prepared by a licensed and certified appraiser and based on data about comparable homes in the area, as well as the appraiser’s own walkthrough.

Approved for short sale: A term that indicates that a homeowner’s bank has approved a reduced listing price on a home, and the home is ready for resale.

American Society of Home Inspectors (ASHI): A not-for-profit professional association that sets and promotes standards for property inspections and provides educational opportunities to its members. (i.e., Look for this accreditation or something similar when shopping for a home inspector.)

Attorney state: A state in which a real estate attorney is responsible for closing.

Back-end ratio: One of two debt-to-income ratios that a lender analyzes to determine a borrower’s eligibility for a home loan. The ratio compares the borrower’s monthly debt payments (proposed housing expenses, plus student loan, car payment, credit card debt, maintenance or child support and installment loans) to gross income.

Buyers market: Market conditions that exist when homes for sale outnumber buyers. Homes sit on the market a long time, and prices drop.

Cancellation of escrow: A situation in which a buyer backs out of a home purchase.

Capacity: The amount of money a home buyer can afford to borrow.

Cash-value policy: A homeowners insurance policy that pays the replacement cost of a home, minus depreciation, should damage occur.

Closing: A one- to two-hour meeting during which ownership of a home is transferred from seller to buyer. A closing is usually attended by the buyer, the seller, both real estate agents and the lender.

Closing costs: Fees associated with the purchase of a home that are due at the end of the sales transaction. Fees may include the appraisal, the home inspection, a title search, a pest inspection and more. Buyers should budget for an amount that is 1% to 3% of the home’s purchase price.

Closing disclosure (CD): A five-page document sent to the buyer three days before closing. This document spells out all the terms of the loan: the amount, the interest rate, the monthly payment, mortgage insurance, the monthly escrow amount and all closing costs.

Closing escrow: The final and official transfer of property from seller to buyer and delivery of appropriate paperwork to each party. Closing of escrow is the responsibility of the escrow agent.

Comparative market analysis (CMA): An in-depth analysis, prepared by a real estate agent, that determines the estimated value of a home based on recently sold homes of similar condition, size, features and age that are located in the same area.

Compliance agreement: A document signed by the buyer at closing, in which they agree to cooperate if the lender needs to fix any mistakes in the loan documents.

Comps: Or comparable sales, are homes in a given area that have sold within the past six months that a real estate agent uses to determine a home’s value.

Condo insurance: Homeowners insurance that covers personal property and the interior of a condo unit should damage occur.

Contingencies: Conditions written into a home purchase contract that protect the buyer should issues arise with financing, the home inspection, etc.

Conventional 97: A home loan that requires a down payment equivalent to 3% of the home’s purchase price. Private mortgage insurance, which is required, can be canceled when the owner reaches 80% equity.

Conventional loan: A home loan not guaranteed by a government agency, such as the FHA or the VA.

Days on market (DOM): The number of days a property listing is considered active.

Depository institutions: Banks, savings and loans, and credit unions. These institutions underwrite as well as set home loan pricing in-house.

Down payment: A certain portion of the home’s purchase price that a buyer must pay. A minimum requirement is often dictated by the loan type.

Debt-to-income ratio (DTI): A ratio that compares a home buyer’s expenses to gross income.

Earnest money: A security deposit made by the buyer to assure the seller of his or her intent to purchase.

Equity: A percentage of the home’s value owned by the homeowner.

Escrow account: An account required by a lender and funded by a buyer’s mortgage payment to pay the buyer’s homeowners insurance and property taxes.

Escrow agent: A neutral third-party officer who holds all paperwork and funding in trust until all parties in the transaction fulfill their obligations as part of the transfer of property ownership.

Escrow state: A state in which an escrow agent is responsible for closing.

Fannie Mae: A government-sponsored enterprise chartered in 1938 to help ensure a reliable and affordable supply of mortgage funds throughout the country.

Federal Reserve: The central bank of the United States, established in 1913 to provide the nation with a safer, more flexible and more stable monetary and financial system.

Federal Housing Administration (FHA): A government agency created by the National Housing Act of 1934 that insures loans made by private lenders.

FHA 203(k): A rehabilitation loan backed by the federal government that permits home buyers to finance money into a mortgage to repair, improve or upgrade a home.

Foreclosure: A property repossessed by a bank when the owner fails to make mortgage payments.

Freddie Mac: A government agency chartered by Congress in 1970 to provide a constant source of mortgage funding for the nation’s housing markets.

Funding fee: A fee that protects the lender from loss and also funds the loan program itself. Examples include the VA funding fee and the FHA funding fee.

Gentrification: The process of rehabilitation and renewal that occurs in an urban area as the demographic changes. Rents and property values increase, culture changes and lower-income residents are often displaced.

Guaranteed replacement coverage: Homeowners insurance that covers what it would cost to replace property based on today’s prices, not original purchase price, should damage occur.

Homeowners association (HOA): The governing body of a housing development, condo or townhome complex that sets rules and regulations and charges dues and special assessments used to maintain common areas and cover unexpected expenses respectively.

Home equity line of credit (HELOC): A revolving line of credit with an adjustable interest rate. Like a credit card, this line of credit has a limit. There is a specified time during which money can be drawn. Payment in full is due at the end of the draw period.

Home equity loan: A lump-sum loan that allows the homeowner to use the equity in their home as collateral. The loan places a lien against the property and reduces home equity.

Home inspection: A nondestructive visual look at the systems in a building. Inspection occurs when the home is under contract or in escrow.

Homeowners insurance: A policy that protects the structure of the home, its contents, injury to others and living expenses should damage occur.

Housing ratio: One of two debt-to-income ratios that a lender analyzes to determine a borrower’s eligibility for a home loan. The ratio compares total housing cost (principal, homeowners insurance, taxes and private mortgage insurance) to gross income.

In escrow: A period of time (30 days or longer) after a buyer has made an offer on a home and a seller has accepted. During this time, the home is inspected and appraised, and the title searched for liens, etc.

Jumbo loan: A loan amount that exceeds the Fannie Mae/Freddie Mac limit, which is generally $425,100 in most parts of the U.S.

Listing price: The price of a home, as set by the seller.

Loan estimate: A three-page document sent to an applicant three days after they apply for a home loan. The document includes loan terms, monthly payment and closing costs.

Loan-to-value ratio (LTV): The amount of the loan divided by the price of the house. Lenders reward lower LTV ratios.

Market value coverage: Homeowners insurance that covers the amount the home would go for on the market, not the cost to repair, should damage occur.

Mechanic’s lien: A hold against a property, filed in the county recorder’s office by someone who’s done work on a home and not been paid. If the homeowner refuses to pay, the lien allows a foreclosure action.

Mortgage broker: A licensed professional who works on behalf of the buyer to secure financing through a bank or other lending institution.

Mortgage companies: Lenders who underwrite loans in-house and fund loans from a line of credit before selling them off to a loan buyer.

Mortgage interest deduction: Mortgage interest paid in a year subtracted from annual gross salary.

Mortgage interest rate: The price of borrowing money. The base rate is set by the Federal Reserve and then customized per borrower, based on credit score, down payment, property type and points the buyer pays to lower the rate.

Multiple listing service (MLS): A database where real estate agents list properties for sale.

Origination fee: A fee, charged by a broker or lender, to initiate and complete the home loan application process.

Piggyback loan: A combination of loans bundled to avoid private mortgage Insurance. One loan covers 80% of the home’s value, another loan covers 10% to 15% of the home’s value, and the buyer contributes the remainder.

Principal, interest, property taxes and homeowners insurance (PITI): The components of a monthly mortgage payment.

Private mortgage insurance (PMI): A fee charged to borrowers who make a down payment that is less than 20% of the home’s value. The fee, 0.3% to 1.5% of the yearly loan amount, can be canceled in certain circumstances when the borrower reaches 20% equity.

Points: Prepaid interest owed at closing, with one point representing 1% of the loan. Paying points, which are tax deductible, will lower the monthly mortgage payment.

Pre-approval: A thorough assessment of a borrower’s income, assets and other data to determine a loan amount they would qualify for. A real estate agent will request a pre-approval or pre-qualification letter before showing a buyer a home.

Pre-qualification: A basic assessment of income, assets and credit score to determine what, if any, loan programs a borrower might qualify for. A real estate agent will request a pre-approval or pre-qualification letter before showing a buyer a home.

Property tax exemption: A reduction in taxes based on specific criteria, such as installation of a renewable energy system or rehabilitation of a historic home.

Round table closing: All parties (the buyer, the seller, the real estate agents and maybe the lender) meet at a specified time to sign paperwork, pay fees and finalize the transfer of homeownership.

Sellers market: Market conditions that exist when buyers outnumber homes for sale. Bidding wars are common.

Short sale: The sale of a home by an owner who owes more on the home than it’s worth (i.e., “underwater” or “upside down”). The owner’s bank must approve a lower listing price before the home can be sold.

Special assessment: A fee charged by a condo complex HOA when cash on reserve is not enough to cover unexpected expenses.

Tax lien: The government’s legal claim against property when the homeowner neglects or fails to pay a tax debt.

Third-party review required: Verbiage included in a home listing to indicate that the lender has not yet approved the home for short sale. The seller must submit the buyer’s offer to the lender for approval.

Title insurance: Insurance that protects the buyer and lender should an individual or entity step forward with a claim that was attached to the property before the seller transferred legal ownership of the property or “title” to the buyer.

Transfer stamps: The form in which transfer taxes are paid by the home buyer. Stamps can also serve as proof of transfer tax payment.

Transfer taxes: Fees imposed by the state, county or municipality on transfer of title.

Under contract: A period of time (30 days or longer) after a buyer has made an offer on a home and a seller has accepted. During this time, the home is inspected and appraised, and the title is searched for liens, etc.

Underwater or upside down: A situation in which a homeowner owes more for a property than it’s worth.

Underwriting: A process a lender follows to assess a home loan applicant’s income, assets and credit, and the risk involved in offering the applicant a mortgage.

VA home loan: A home loan partially guaranteed by the United States Department of Veteran Affairs and offered by private lenders, such as banks and mortgage companies.

VantageScore: A credit scoring model lenders use to make lending decisions. A borrower’s score is based on bill-paying habits, debt balances, age, variety of credit accounts and number of inquiries on credit reports.

Walkthrough: A buyer’s final inspection of a home before closing.

Water certificate: A document that certifies that a w

5
Buying a Home? Plan for These Hidden Costs
29 / Nov / 2020
Buying a Home? Plan for These Hidden Costs

Get those rainy day funds in order — you're going to need them.

You’re excited because you just found the perfect home. The neighborhood is great, the house is charming and the price is right.

But the asking price is just the beginning. Be prepared for additional — and often unexpected — home-buying costs that can catch buyers unaware and quickly leave you underwater on your new home.

Expect the unexpected

For almost every person who buys a home, the spending doesn’t stop with the down payment. Homeowners insurance and closing costs, like appraisal and lender fees, are typically easy to plan for because they’re lumped into the home-buying process, but most costs beyond those vary.

The previous owners of your home are the biggest factor affecting your move-in costs. If they take the refrigerator when they move out, you’ll have to buy one to replace it. The same goes for any large appliance.

And while these may seem like a small purchase compared to buying a home, appliances quickly add up — especially if you just spent most of your cash on a down payment.

You’ll also be on the hook for any immediate improvements the home needs, unless you negotiate them as part of your home purchase agreement.

Unfortunately, these costs are the least hidden of those you may encounter.

When purchasing a home, definitely hire a home inspector (this costs money too!) to ensure the home isn’t going to collapse the next time it rains. Inspectors look for bad electrical wiring, weak foundations, wood rot and other hidden problems you may not find on your own.

Worse still, these problems are rarely covered by home insurance. If an inspector discovers a serious problem, you’ll then have to decide if you still want to purchase the home. Either way, you’ll be out the cost of hiring the inspector.

Consider the creature comforts

Another cost is your own comfort. There are a number of smaller considerations you may not think about until after you move in.

Are you used to having cable? If so, is your new home wired for cable? It’s much harder to watch a technician crawling around punching holes in your walls when you own those walls.

And if you’re moving from the world of renting to the world of homeownership, you’ll probably be faced with much higher utility bills. Further, you could find yourself paying for utilities once covered by a landlord, like water and garbage pickup.

Plan ahead

The best way to prepare for the unknown and unexpected is through research and planning. This starts with budgeting before house hunting and throughout your search.

Look at homes in your budget that need improvements, and then research how much those improvements could cost. Nothing is worse than buying a home thinking you can fix the yard for a few hundred dollars and then realizing it will cost thousands.

There’s really no limit to how prepared you can be. Say you find a nice home that’s priced lower than others in the area because of its age. You may save money on the list price, but with an older house, you could be slapped with a much higher home insurance payment, making the house more expensive in the long run.

This is where preparation comes in. Research home insurance and property prices in the areas you’re considering to make more educated decisions before you ever make that first offer.

Clearly define how much you intend to put toward your down payment, and then look at how much cash that leaves for improvements and minor costs, like changing the locks. That way, when you find a house at the high end of your range, you’ll know to walk away if it requires a new washer and dryer or HVAC system upgrade.

Establish a rough estimate for as many costs as you can think of, and be extremely critical of homes at the top of your budget — otherwise, you could easily end up being house-poor.

Know your budget and plan ahead. Buying a home is a lot less scary when you know what you’re getting into.

6
Dont Believe These 5 Myths About Real Estate Agents
29 / Nov / 2020
Dont Believe These 5 Myths About Real Estate Agents

Do you need one? Do they pocket the whole commission? Let’s set the facts straight.

Buyers and sellers often enter the market with misconceptions about real estate agents — how they work, how the process works and what the agency relationship is all about.

It’s helpful to point out, without getting too far into the weeds, that in any one real estate transaction, there are most likely two agents: one for the buyer and one for the seller.

Here are five myths (and five truths) about working with both buyer’s and seller’s agents.

1. Agents get a 6% commission, no matter what

Most people assume that their agent is pocketing the entire commission. That would be nice, but it’s just not accurate.

Truth

First, it’s helpful to know that the seller pays the commission, and they split it four ways: between the two brokerages and the two agents.

Finally, the brokerage commission isn’t fixed or set in stone, and sellers can sometimes negotiate it.

2. Once you start with an agent, you’re stuck with them

If you’re a seller, you sign a contract with the real estate agent and their brokerage. That contract includes a term — typically six months to a year. Once you sign the agreement, you could, in fact, be stuck with their agent through the term. But that’s not always the case.

Truth

If things aren’t working out, it’s possible to ask the agent or the brokerage manager to release you from the agreement early.

Buyers are rarely under a contract. In fact, buyer’s agents work for free until their clients find a home. It can be as quick as a month, or it can take up to a year or more. And sometimes a buyer never purchases a house, and the agent doesn’t get paid.

Before jumping into an agent’s car and asking them to play tour guide, consider a sit-down consultation or a call, and read their online reviews to see if they’re the right fit.

Otherwise, start slow, and if you don’t feel comfortable, let them know early on — it’s more difficult to break up with your agent if too much time passes.

3. It’s OK for buyers to use the home’s selling agent

Today’s buyers get most things on demand, from food to a ride to the airport. When it comes to real estate, buyers now assume they need only their smartphone to purchase a home, since most property listings live online.

Truth

First-time buyers or buyers new to an area don’t know what they don’t know, and they need an advocate.

The listing agent represents the seller’s interests and has a fiduciary responsibility to negotiate the best price and terms for the seller. So working directly with the selling agent presents a conflict of interest in favor of the seller.

An excellent buyer’s agent lives and breathes their local market. They’ve likely been inside and know the history of dozens of homes nearby. They’re connected to the community, and they know the best inspectors, lenders, architects and attorneys.

They’ve facilitated many transactions, which means they know all the red flags and can tell you when to run away from (or toward) a home.

4. One agent is just as good as the next

Many people think that all agents are created equal.

Truth

A great local agent can make an incredible difference, so never settle. The right agent can save you time and money, keep you out of trouble and protect you.

Consider an agent who has lived and worked in the same town for around ten years. They know the streets like the back of their hand. They have deep relationships with the other local agents. They have the inside track on upcoming deals and past transactions that can’t be explained by looking at data online.

Compare that agent to one who’s visiting an area for the first time. Some agents aren’t forthright and might be more interested in making a sale. Many others care more about building a long-term relationship with you, because their business is based off referrals.

5. You can’t buy a for sale by owner (FSBO) home if you have an agent

In a previous generation, sellers who wouldn’t deal with any agents tried to sell their home directly to a buyer to save the commission.

Truth

Smart sellers understand that real estate is complicated and that most buyers have separate representation. And many FSBO sellers will offer payment to a buyer’s agent as an incentive to bring their buyer clients to the home.

If you see a FSBO home on the market, don’t be afraid to ask your agent to step in. Most of the time the seller will compensate them, and you can benefit from their knowledge and experience.

7
Affordable Housing in Bangalore!
29 / Nov / 2020
Affordable Housing in Bangalore!

Affordable Housing in Bangalore is of utmost importance to the Builders in the coming days as there are numerous migrants from different states coming down to the City for making their living. This is creating a lot of demand for affordable housing in the real estate sector.

  All the Tier-A builders in the market these days themselves are focused on building top-notch houses that even the middle-class people can consider purchasing! Although, It isn’t an easy task to give all the luxury features in a budgeted condo.. The builders have taken it upon themselves as a challenge to accomplish it! 

 There are new people coming into Bangalore everyday and after working for just a year look forward to buying an apartment for their own safe haven. These days everybody who once had a good cash savings prefers to go ahead and make an investment in the real estate field. Now, this is becoming possible even for the Middle-class families whose incomes are extremely reasonable. 

  Let’s consider an example.. Mr. Arnab has an income of 60,000/- a month and lives with his parents and wife and also a Kid. He has been working for about 6 years now and has never made an investment in Real estate before.. But is thinking about it now as he has a good cash savings and has to give a safe and secure environment to his family! So, having a budget of 60 lacs starts his hunt for buying a house! He finally comes across a property called Brigade El dorado. Where.. A 3BHK costs him about 45 lacs that is without calculating the registration costs and 5%GST! He then approaches them and finds out he is eligible for another deduction of 2.67 lacs under the PMAY scheme. Keeping in mind that the Brigade El Dorado is a magnificent project that has ALL Top-Notch facilities you can think of! For him getting a house that gives you all of this at a mere 42 lacs is like a dream come true! These Big projects have helped individuals actually get out their money’s worth! 

 Previously, in the market.. At this rate you had the option of buying a property only with local builders! Also, there are only a limited amount of local builders who actually give quality apartments the rest of them are just mainly PROFIT ORIENTED.  

 A few apartments that even the folks from the middle class can purchase are: 

  1. SHRIRAM 107 at 28 lacs*

  2. Godrej 24 at 37 lacs*

  3. Assetz Here and Now at 34 lacs*

  4. Orchid Picadally at 52 lacs*

  5. SHRIRAM Dil chahta hai dobara at 24 lacs*. 

 

There are many other properties as well that offer a brilliant price with unreal amenities with an apartment that is worth going through! As we know, millennials are the new face of Indian realty. Quality houses that are sensibly priced, have over the years gained prominence amongst them. This is up to the extent that the generation is looking forward to fulfilling their aspirations of purchasing a home sooner than expected. Compact yet quality living is one of the recent trends that is widely accepted by the first-time homebuyers. The demand for affordable residential units, is in turn, driving the growth of this particular segment.

As per an industry report, affordable housing has witnessed a growth of 22 percent in the sales velocity during 2018. Unfortunately, the supply is not at par with the demand existing in this segment. The term ‘affordable’ as a buzzword is not even in line with the Government’s definition of affordable housing. However, the residential markets such as Bangalore, Chennai, Pune, Hyderabad and Kolkata have witnessed an exponential growth, which is only corroborated by a recent report which states that people’s propensity to spend on housing is likely to improve over the next three years across the cities. The Budget announcement towards the affordable housing segment gave a ray of hope to those who were dreaming to own homes post the reduction in GST rates. The escalating demand for chic and affordable housing is expanding and is expected to impact the overall sales in the residential market.

Post the introduction of several regulations, the realty sector has now become more organised and transparent. As a result, the homebuyers have started trusting the players in the market. Affordable segment has successfully garnered attention from the homebuyers and will further drive growth in the residential market. The current governmental reforms with regards to real estate and the initiatives towards providing housing to all will also provide a boost to the realty sector on a large scale.

India has seen a rise in the affordable housing sector, which over the previous 3-4 years has dominated the residential segment. In the past five years, the average size of apartments in most large cities has decreased. Realtors target a large segment of buyers, particularly millennials who prefer affordable homes in well-connected areas over large apartments in distant areas. The millennials inclination towards buying a home is also driven by the Pradhan Mantri Awas Yojana (PMAY) scheme and due to fewer liabilities on the home buyers. Developers also have been venturing into the segment because of the demand surge and to avail income tax exemption by the government under PMAY scheme.  

Bangalore we all know is the 5th largest city of our country with a population of 9milllion + it is preferred as one of the best-sought places for investment destinations. Popularly known as Silicon Valley the city has witnessed the fastest growing pattern in some years. The crown fetches one more feather of being an IT Hub of India it is a metropolitan city which is experiencing a robust of real estate development and trends. People who are an investor and who want to invest in real estate always want to be updated and keep finding the new developing and current market trends in the areas. Being such a metropolitan city the job market has also developed tremendously. The city has premier educational institutes, hospitals, shopping malls, and many other infrastructural amenities. If we talk specifically about the realty sector Bangalore is dominated by residential and commercial projects both. The demand for 2BHK, 3BHK, penthouses and villas are high whereas affordable housing which has equipped the market right now has added the value to living. The biggies of real estate are coming up with highly advanced projects which are providing the buyers with more and more options.

8
Fears faced by first time real-estate buyers with solutions.
29 / Nov / 2020
Fears faced by first time real-estate buyers with solutions.

Fears faced by first time real-estate buyers with solutions.

There are many fears faced by a first time real-estate buyer. We here have simplified those issues and given solutions for the same! 

1. Never dealt with a realtor before and have little or no knowledge of how to choose one.

Searching and hiring the legit realtor is no different than hiring any other professionals! It is mandatory for hiring a person who has ample experience in this field so he has a good idea of what your preferences are. Before you actually choose your realtor make sure you have visited at least 3 individuals!

2. Worry about Loss in Property Value.

It is important to know that property values can decline in value. It is not necessary for a property value to decline only in times of calamities. In some cases newly built homes can make old ones reduce in value. There are other factors also that can reduce the value of the property like construction of prison, dump yard in or around the locality can also result in depreciation of land prices. The only precaution an individual can take to prevent such losses is to do a thorough research about the place he is looking out to invest in!

3. High Maintenance Cost.

Any house an individual purchase will have a maintenance cost, That’s the most basic expense incurred after buying a property. There is no way of avoiding them but there are ways the home buyer can keep them at a minimum. There are few points an individual can keep in mind before discarding the plan of making a purchase completely. They are:

• It is preferable to buy a house that is well maintained. That means that it is better to see the quality of construction to see if there will be any additional costs that may be incurred anytime in the future. 

• Also if you are considering buying a house that was already initially purchased by someone it is better to go for an option in which people have already made upgrades where it is really important.

• The best thing to do is to move into a house that is newly constructed. In that way the home buyer will be avoiding paying the price for damages the previous owner did. 

• Keep a keen eye for all sorts of small problems that occur and get it rectified at the earliest for reducing any kind of large future expense. 


 

4. Unaffordability of paying the EMI’s that come with buying a house. 

The most basic thought that comes to a person’s mind before making a purchase in the real estate sector is that In case he loses his job, how will he manage to make  payments for his purchased house? To deal with potential loss in jobs is only to keep large emergency cash reserves that can help cope with the tough times that are to come your way! This emergency fund can help you pay your mortgages also it is not likely that your home will be taken away in case of missing the first mortgage payment. 

  So, before you go ahead with the process of buying a house make sure you have made a budget of what your current expenses are and also what is the amount you take back home. It is important to also assume the expenses that may come as being a house owner like water bills, electricity bills, and other damage repairs, etc. Another unorthodox method to see if buying a house suits your finances is to make fake mortgage payments to see how much it affects you. Make sure you have health Insurance before you buy a house as medical bills are a very common way to destabilize your income.

Some people put off buying a home because they are afraid they might regret their purchase later. This is not usually something that plagues people who have done adequate research and carefully defined their wants and needs ahead of time.

To prevent buyer’s remorse, become pre-approved for a mortgage so you will know exactly what you can afford. Visit different neighborhoods at night and on the weekends to see what they are really like. Drive their streets during rush hour so you’ll know what your daily commute might entail. Don’t place pressure on yourself to buy quickly, as you are more likely to regret your decision if you do. Take your time and pay attention to every detail, and you are apt to be satisfied with your decision for years to come.

These fears actually strike a good number of people, so you shouldn’t feel discouraged if you share these same worries. The key is not to let these fears overcome you and stop you from making one of the most important decisions of your life. Careful planning is the key to putting these fears behind you so you can eventually realize the American dream of home ownership.

The best way to quiet those nagging concerns is to learn more about how to avoid the pitfalls.

In the same way expectant parents often receive unsolicited (and unwelcome) advice on what to expect during labor and delivery, prospective homeowners are often pelted with ominous stories that belong more in the category of “Tales of Horror” than “Sound Advice.”

Anyone who is considering home ownership has undoubtedly heard at least a few bad stories. Your best friend knows someone who knew someone who had an awful experience. The Internet is riddled with tales of woe and warning, waiting to pounce upon a buyer trying to do some preliminary research. To really amp up any feelings of anxiety, try watching Tom Hanks movie “The Money Pit”.

It’s okay. It’s going to be just fine. Just make decisions with a calm and confident mindset and all that you wished for your future home to be will actually BE. All the best to those future buyers out there! Make sure to be in contact with Legit Property Dealers and not just the ones who take this as their extra source of income.

 

9
Investments in Equity Or Real Estate?
29 / Nov / 2020
Investments in Equity Or Real Estate?

Investments in Equity Or Real Estate?
equity-or-real-estate
Wondering If you should invest in equity or real estate? This blog will atleast get you one step closer to making a sound decision.This topic is one that has been a real show stopper, after all being In the world where you see big players dealing in shares would you if you were in the corporate game invest in real estate? 
  Let me tell you something I heard at this investment based conference. The product being discussed was in the game of real estate and the prices being about 24 Lacs. A very reasonable Investment for a matter dealing with the real estate market and also apart from this they give the buyer a grace period of 30 months after you pay a 10% value of the property. After which technically, you own a pretty luxurious chunk of land which again is expected to be appreciated at a very minimal rate of 3.5%. Keeping in mind that there is a EMI-FREE period of 2.5 Years. Which after calculating the mere appreciation gives you a good boost on your purchased property by about 2 lacs and even before you can consider paying the first EMI you can be freed of the burden of EMI by selling it whomever is willing to buy and get your capital with a reasonable amount of returns as well. The property being discussed over here is a Project by a Builder Group caller “SHRIRAM”. Although, it is a must to keep in mind the thorough evaluation of the property and the factors affecting it.
   Now investing in equity? Good idea? There are numerous sources that are very pro-equity like investing, opinions that people have and what they mean by that is that buying equity is more like investing in the future of the country’s economy. That can be said because as we know it with a growing economy there are better opportunities for the growing corporate companies. I say that it is a way of staying ahead of the inflation trends these days. The reason being it gives you an average return of 10% per annum. Of course, the risks are much higher in these investment areas. Hence all investments must be made with utmost caution.
  To summarize both the investment options have their own kinds of risks. It all comes down to the investor! Where He must choose what is the kind of risk he is willing to take.Now while the stock market is an index that allows us to scientifically measure the rate of the return, the job is a lot harder for real estate. Specific cases in certain locations have generated far higher returns that others across land, residential, retail and commercial spaces across the country. According to a study by Cians Analytics on the returns from various asset classes in India during 1991-2013, real estate and equity have given maximum returns to investors. Looking at the overall returns, the study stated that real estate outperformed all other asset classes during the 23-year period with an annualized rate of 20% while equity generated an annualized return of 15.5% on a nominal basis during the past 23 years. This was given by a source called Times Now. Real estate is something that you can physically touch and feel – it's a tangible good and, therefore, for many investors, feels more real. Maybe this partially accounts for the high return on the investment, as from 1978-2004, real estate has had an average return of 8.6%. For many decades this investment has generated consistent wealth and long term appreciation for millions of people.
Generally, there are two main types of real estate: commercial and residential. While other types exist (mobile home parks, strip malls, apartment buildings, office buildings, store fronts and single-family homes), they generally fall into those two categories. Making money in real estate isn't as cut-and-dry. Some people take the "home flipping" route – searching for distressed properties, refurbishing them and selling them for a profit at a higher market value. Others look for properties that can be rented in order to generate a consistent income. 
Generally, a down payment of up to 20% of the purchase price can be made, and the rest can be financed. This gives you leverage, meaning that you can invest in different types of properties with less money down, helping to build your net worth or income that you could make off the properties. While this can be a positive, if this leverage is used incorrectly, you may owe more on the properties than they are actually worth.
While talking about stocks the aspects taken into consideration change. Here’s how we look at investment in stock.. With a stock, you receive ownership in a company. When times are good, you will profit. During times of economic challenges, you may see diminishing funds as the earnings of the company drop. Taking a long-term approach and being balanced in many areas can help build your net worth at a much greater rate, compared with real estate. 
As with real estate, financing in stocks allows you to use margin as leverage to increase the overall amount of shares that you own. The downside is that, if the stock position falls, you could have what is known as margin call. This is where the equity, in relation to the amount borrowed, has fallen below a certain level and money must be added to your account to bring that amount back up. If you fail to do this, the brokerage firm can sell the stock to recover the amount loaned to you.
  Now, it all comes down to one fact. What kind risk is the individual willing to take? And also How long is willing to wait to see the tree bear fruits.  Taking these two factors will help him narrow down the kind of commitment each investment requires. 
Hope, this blog helped you get a step closer to what you desire. Happy Buying!

10
Process of buying a house
29 / Nov / 2020
Process of buying a house

Process of buying a house

 

The process of buying a house must be cautiously carried-out as in this modern world the amount of scams that are being carried out are at a very high number. Although keeping the scams aside there is a certain process that is to be followed for an individual to make a sound decision in the field of Real Estate.

 The first and most basic thing to be done is to choose the city in which an individual is looking-out for purchasing the property. The easy part ends once you’ve chosen the city. From here on forth a person has to be very cautious in making each decision. So, after choosing the city he must consider factors like work place, traffic zones, personal requirements and other factors like accessibility of the area and then Zero-In on the locality in the city he wants to reside in.

  The second step would be that he must consider when he wants to take occupancy of the property. This step is for those who are looking out for staying in the property to be purchased, If in case the individual wants immediate possession of the property he has a different set of decisions he must make. Firstly, He or She must know what tenure they are planning to stay there for. The reason for this is because in case they are looking forward to living there for an average of 8 years which again is quite a long period of time then he/she must purchase either a newly built apartment Or an apartment that is not more than 3 years old (Advisable). 

  The Third and a very crucial step is to set-up a budget in which the buyer wants to purchase the property also if they are willing to make adjustments of maximum of what numbers from their budget and making sure they stick to it and request the Agent to show them properties according to their convenience.

  The next would be short-listing the properties they are willing to purchase in.. That may be both renowned or local builders. It is advisable to have at least 5-6 houses which if you had a chance you would buy all and after which you can take a step back and choose what best suits you. This again must be done very carefully. After all the process is complete.. You can go ahead and choose the flat you have decided to purchase. 

  Now comes the part where the negotiations are supposed to be done. Make sure you evaluate all factors before you sit at the negotiating table. Although there is a way where you can get a mediator who can help in the matters relating to negotiations. There are companies that do it for you up to a certain level. One company that I found very helpful in this matter is OSS HOMES. They gave me a good discount with a nice holiday package to start-off with. Now, while negotiating even the payment plans must be evaluated completely so that you are comfortable in paying-off the loans without any kind of haggle. All calculations must be done before going ahead with the confirmation.           

  Now that you are comfortable with all the previous decisions you can go ahead with the finalization of the unit that you want to purchase. After which the unit is allotted to you and you get something called the allotment letter which is your proof of purchase of the unit number.  During this process itself there will be an agreement which will be prepared which will be called the Sales Agreement in which both parties sign and officiate the sale.

  Now the last thing that happens is called Registration of a property, The purpose of this is to record the execution of the document. A reasonable charge is implied of 1% at the time. Although, the registration can only be done once the construction of the project is 100% complete. So, don’t hesitate if it doesn’t happen before that!

  Now when we talk about a foreign national buying a house in India he would face these challenges before he/she can go ahead with the purchase..   A foreign national resident in India does not require approval of RBI to purchase any immovable property in India. This is because once he is a resident in India, he gets the rights like any other resident. This freedom is however not available to citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan.

Leases are different, too. "Ineligible persons" (e.g. foreign nationals of non-Indian origin and also citizens of certain countries specified above) can acquire residential (not commercial) accommodation on lease not exceeding five years without any RBI permission. However, much property has been ´sold´ to foreigners, particularly in Goa, where prices are cheap and developers are plentiful, on 5 year leases. The buyers won't get title to the property until they can obtain residency, which is what most of them intend to do eventually. But they may be disappointed - increasingly new visas explicitly forbid foreigners from staying in India more than 180 days consecutively (see article in the Daily Telegraph).

There are also many stories of bribes being paid for the law to be circumvented. Currently an initial investigation into a selection of property deals has been launched by the chief minister of Goa, Pratapsingh Raoji Rane. The worst case scenario facing anyone who has not adhered to the letter of the law as stipulated in the Foreign Exchange Management Act of 1999 is the confiscation of their property assets. Some local xenophobia is being whipped up over this issue. 

By looking at all these factors any potential buyer out in the market  now has enough knowledge to go about the whole procedure well informed about the possible drawbacks he can face. But, we here at OSS specialize in easing the process of buying a home by giving our customers the attention required and that has to be given for buying a house. We eliminate all sorts of wrong doing that may happen during the course of hunting down and buying a house. Hope we can help you for your future Real-Estate needs for now or in the future.

11
Rise in Demand for buying houses in the affordable housing segment
29 / Nov / 2020
Rise in Demand for buying houses in the affordable housing segment

Rise in Demand for buying houses in the affordable housing segment.

 There has been a good rise in Demand for buying houses in the affordable housing segment. The major customer base for flats that are offering the affordable housing flats are people of the middle-class or the upper-middle class. Even in the middle-class segment mainly the salaried people are going ahead for purchases. As the majority of India’s population comes under middle-class there are many people who are actually very interested in buying a house In these projects. Hence, there was a major rise in the demand for buying houses that come under the Affordable housing segment. 

  There was a study that was conducted by a couple real estate firms and consultancy firms that showed that the top 5 cities in India that are.. Chennai, Hyderabad, Mumbai, Delhi-NCR, Ahmedabad have a very high and rising demand for affordable housing. This increase in demand has led to the big players in the market to build houses that do not exceed 50 Lacs. Builders have started targeting the suburbs of the cities for people to make future investments. 

  The change in mentality of people in recent days has also led to the rising demand in the affordable housing sector. In the early days people preferred buying land and making the house themselves as they used to live as joint families. Now, in modern India there is a major rise in the number of people living independently or in nuclear families with a maximum of 1 child.This eliminates the option of building the house from the ground up. With all these developments happening there is a major rise in the demand for studio and 2BHK apartments. 

  In the most recent days the Government has also taken up initiatives to give the common folks buying apartments in these segments a good benefit under PMAY. The Government has also reduced the taxes that used to be levied on real estate. The GST for these houses is just a mere 1% which relieves buyers from the additional charges that used to be prevalent! The migration of people from the rural areas to the city has also had a major increase. 

 The booming economy and the rise in pay-out’s for an individual has made it possible even for the younger generations to buy properties these days but only in cases where the prices are realistic!In the last couple of years, affordable housing is the only segment where transactions have happened in real estate. Pradeep Aggarwal, co-founder and chairman of Signature Global, which has delivered one affordable housing project and has 12 others in the pipeline, talks about why the segment is getting traction and its prospects.

There are various reasons why the real estate market is in such a situation since the last 5-6 years, but the most important factors that affected the real estate sector was absence of a regulator and mismatch in demand and supply. In any unregulated industry, it is easier to take things for granted and this has backfired in real estate. Besides, mismatch between demand and supply and decline in speculation-driven demand impacted sales. Now there are no speculators because those unrealistic price escalations are not possible anymore.

As far as affordable housing is concerned, you need to understand that 95% of the country’s population consists of the lower middle class or economically weaker section. These sections are driving demand in affordable housing. Moreover, in the past few years, the government’s focus and incentives to developers as well as homebuyers was why demand in the segment went up. I look at affordable housing from a different perspective; it is not just real estate, it is the need of the masses.

It is difficult to segregate the buyers. But about 70% of the buyers in this segment are salaried individuals. This salaried class, I suppose, is buying it either for own use or may opt to rent it out later. I don’t think there are any speculators in this segment, because if I talk about Haryana government’s affordable housing policy, there are restrictions on transfer of property till the buyer gets possession and even a year after that. I consider them as end users or serious investors, and not someone buying for speculation.

The next biggest initiative that has contributed to the residential market boost is Affordable Housing, by the ruling Indian government. Incentives as part of the same have been aiding in the recovery of the overall sector, by augmenting housing supply. Developers have been investing a lot more into infrastructure and better connectivity, thereby fortifying this progress.

The government’s ‘Housing For All by 2022’ vision as part of Affordable Housing is expected to be the key catalyst of it emerging as the most powerful segment in the residential real estate market in the near future, with the biggest developers heavily investing in it. The segment contributing to 41% of new supply in 2018 serves as a testament to this market forecast, All of these well-defined policies, initiatives, and incentives, combined with the changing dynamics of the nation’s population make for reflection of greater developments in the real estate industry. With student housing on an all-time high, coupled with the Government’s continued efforts with regard to the affordable housing initiative, the real estate industry in India is primed for a magnificent comeback.  Moreover, with the rising number of the young working population, there is an ever-growing demand for housing, thereby affirming the immense potential for residential real estate to hold its own as a lucrative market for investment

12
What is the return on real estate?
29 / Nov / 2020
What is the return on real estate?

What is the return on real estate? 

Every potential investor in the field of real estate has this one very simple yet hard to answer question and that is.. Will this investment give me the returns as expected? In Bangalore, with the standards of construction being so high the probability of returns is on a higher side.

   We have all come across this one Tag that has been to the City Bangalore.. That it’s the Tech-Capital of India. This Tag came with a tremendous boom in the real estate market! The amount of people coming in have incredibly gone-up at a very high and quick pace. Which is one point to be noted while planning an investment anywhere in the country. 

    Going into future investment hot-spots of Bangalore (now called Bengaluru) one of the most upcoming places in Bengaluru is Bangalore-North this is where all the major smart-cities are coming up and at a price that seems unreal. There are projects which bring to reality things that we could at a point be considered imaginary.

    Although, the major IT giants are based in Bangalore, because of this reason people who come from far-off places they prefer Bangalore city. This place now has a massive investment of a huge amount attracting various multinational company at the site.  Which again boosts the employment opportunities for the state. 

   One thing that gives you the hope for good returns after making an investment, is that According to the new plans proposed one thing has come in the limelight and that is the expansion of the Airport. In reality an Airport. Bigger than any other airport in India! The other factors included the steps that the Government is taking for harboring the growth that is taking place in the city. The delivery standards of the properties that are supposed to be maintained is at a very high level. Hence, there is a very healthy competition! As for the financial back-up given to them is taken special care by the Government. 

Your objective ought to consistently be to hold property or REIT shares for at any rate five years. 10 is much better. This gives you a superior possibility of acknowledging comes back from both pay and appreciation. Suppose you purchase an investment property for ₹50lacs in real money. Your yearly net working pay (NOI) after costs is ₹1,80,000.. You hold the property for a long time. For straightforwardness, suppose your NOI remains similar that entire time and you sell the property for ₹1cr.. See what a profit that would be? It’s just a game of patience and opportunity.

 

  At whatever point the credit taps in an economy are released, in the long run a great deal of the cash winds up in land, boosting house costs. Then again, times of easing back credit development regularly lead to decrease in house costs.Business analysts at the Bank for International Settlements (BIS) have regularly caused to notice this wonder as a major aspect of their theory on the working of the monetary cycle, or the budgetary cycle drag (FCD) speculation, which expresses that credit blasts in any economy will in general store moderately low-profitability areas, for example, land. This makes an obligation overhang, without satisfactorily expanding efficiency or potential yield in the economy. Inevitably, when the credit blast blurs away, it may prompt an extended financial log jam. As indicated by BIS market analysts, when business cycles agree with money related cycles – for example credit blasts and credit busts – downturns could be more profound. 

The new database lamentably does exclude information on India, for which dependable since quite a while ago run information on house costs is rare. The constrained house value information accessible from around 2010 onwards proposes that lodging value developments have been less unpredictable than values. Obviously, private land stays an exceptionally well known road for families to contribute their riches. In excess of 90% of the abundance of Indian family units' is tied up in land or in structures, as indicated by a 2016 research paper by Ishan Anand and Anjana Thampi. 

 

Be that as it may be,, house value development in significant Indian urban communities has stayed quieted throughout the previous not many years, falling off forcefully from the fast ascent saw during the credit blast of the 2010-2012 period. As in different nations, the ascent and disappearance of the credit cycle additionally appears to drive the ascent and fall of house costs in the nation.

Real Estate investment is  the acquisition of a future pay stream from property and can offer a few points of interest over different kinds of speculations, including unbelievably  better yields, steadiness, swell supporting, and broadening. Here are a few of the key motivations to think about putting money into land.

In contrast to stocks, and somewhat bonds, an interest in real estate is upheld by a significant level of block and cement. This decreases the head operator strife or the degree to which the enthusiasm of the speculator is reliant on the honesty and skill of chiefs and account holders. Indeed, even Real Estate Investment Trusts (REITs), which are recorded land protections, frequently have guidelines that command a base level of benefits be delivered out as profits.

Another advantage of putting resources into land is its expansion potential. Land has a low and at times negative, connection with other significant resource classes. This implies the expansion of land to an arrangement of expanded resources can bring down portfolio unpredictability and give a better yield for each unit of hazard.

Speaking about any drawbacks, one of the main issues that would be faced would be only the lack of liquidity of the invested amount. Not at all like a stock or bond exchange, which can be finished right away, a land exchange can take a long time to close. Indeed, even with the assistance of a merchant, just finding the privilege counterparty can be half a month of work.

All things considered, propels in monetary advancement have introduced an answer for the issue of illiquidity as recorded REITs and land organizations. These give circuitous responsibility for home resources and are organized as recorded organizations. They offer better liquidity and market valuing however come at the cost of higher unpredictability and lower broadening benefits.

13
How to check the quality of construction?
29 / Nov / 2020
How to check the quality of construction?

How do you check the quality of construction in the projects you have invested in? We here at OSS have simplified all the steps to be taken for simplifying the process of  checking the quality of construction being carried out. 

India is a growing economy hence there are a lot of companies that are investing for obvious reasons, that is so that they too can enjoy the fruits of a growing economy. Now for this reason there are many residential units at very attractive prices. For this reason, it is very important to make sure that the quality of construction is maintained and not played around with for personal gains. 

  It is of great importance that any potential home buyer must make sure he checks and evaluates the construction,if he or she is having thoughts about making a purchase in any up-coming projects. That means after making the booking, the best thing an individual can do is to make surprise visits to the property. But, as we all know checking the quality of construction is not an easy task. Being a layman, it is a very hard task to understand the structural design of a building.

  So, assuming you have arrived at the construction site the first thing you must do is check the quality of concrete mix. The quality of the concrete mix is closely monitored. Although, at times it really does get difficult to prepare the mix and constantly monitor it. Hence, ready-mix concrete is preferred. 

  The next job would be to see if all the safety features are given by the developer such as resistance levels from earthquake and fire exits and such things which are bare essentials of a building. 

  Examination of the elevators there have been many cases where because of poor maintenance or improper installations the lifts have just fallen. What  you can have a look at is the checking of plastering on the outer walls. The uneven cracks on the wall plastering is an indication that the foundation or quality of the building construction is not good. Which can turn out to be very risky in dire situations. There are many third parties that can audit the project and protect the buyers from any unpleasant surprises.

While talking about these aspects we do not differentiate if it is specifically for commercial or residential properties. We discuss the process as a whole. We have separately discussed these topics in detail in several other blogs, if in need of detailed explanation do give the other blogs posted a glance. 

But, now an overview of How to check the Quality of construction follow or put in your checklist the following list of things.. 

Look out for the exteriors.. Cracks in the wall indicate that the building has a weak foundation.  One should observe even minor cracks as this shows that faulty building materials were used during construction.

Have a good look at the concrete mix being used.. The strength of concrete will determine whether the building can carry a load. Use a nail while testing the quality of building materials. Drive the nail into a brick. If the nail bends easily, the brick is of good quality. You can do the same thing with mortar between the bricks.

Now comes the tricky part! The checking for how good the plaster is..You can check the quality of plaster by driving a nail into it. If the nail easily goes through, then the mortar between the plaster is bad. If the nail bends, the plaster is of good quality. Okay, so the reason this is so tricky is because you may end damaging walls. Hence, it is advised that you get it done with the help of the construction laborers on the job.  

All of us are mainly concerned about the interiors of the property. Be it of whatever kind! For starters checking the quality of paint would go a long way! Good paint will enhance the longevity of walls and wooden surfaces other than creating a visual appeal for the building. Inexpensive paint, on the other hand, will reduce the durability of the walls.

Next, floor alignments must be another factor to be considered. We might not know when we would end up in a situation like the scene from How I met Your Mother where Lily and Marshall buy a crooked apartment because of their lack of knowledge of how to buy one! To validly make mistakes like they did you can follow this sweet and simple trick.. A homebuyer can follow this simple test. Take a few marbles and set them loose on a floor. The marbles should roll in the direction of the drain, if there is one.

This can also be tested in a bathroom. Use water instead of marbles. The water should flow directly into the drain. 

It is always better to choose the fixtures being used in the house before the construction has begun just to keep you free for the little things your house will need for making it the perfect home. Fittings inside the kitchen and bathroom such as taps and showers should be thoroughly investigated. Doors should not make creaking sounds while being used. The tiles that are used in the bathroom and kitchen can indicate the overall quality of the construction. Homebuyers shouldn’t forget to check out the electrical fittings, door handles and window latches.

Besides the rooms inside the building, common areas can also give an insight into the construction quality. Buyers can check the maintenance facilities for elevators. Lifts will usually have a maintenance contract which is checked periodically by the management. Green spaces inside the building complex are also a sign of quality construction.This indicates that the developer is not trying to use every measure of space inside the layout. The average life cycle of a building lasts around 60 to 70 years. A building of poor construction quality will have a much shorter life span. It is important to do a maintenance check on the building at least once every decade. Every home buyer should be aware of these tips to assure good standards of construction.


 

14
Mivan framework system Vs Conventional method of construction.
29 / Nov / 2020
Mivan framework system Vs Conventional method of construction.

Mivan framework system Vs Conventional method of construction :

The Mivan framework system compared with the Conventional system is something that everyone one must know about.

 So, for the people who don’t know what either of the topics are.. The conventional method of construction is the Brickwork method. This method has been used for a very very long time! Hence it is called the Conventional method of construction. Now, when we speak about the Mivan method of Construction.. It is the advanced way of construction for the modern world.

  While using the conventional method of construction the cost of getting the job done was very high as it took longer to construct and because of which labor cost also increased. The speed of development in case of conventional construction for one floor is about 21 days when you compare the same with Mivan method of construction is just a mere 7 days. 

 Now, when we talk about even quality.. With conventional systems the strategy for development is ordinary so there is a very ordinary quality of work. With the Mivan method of construction there is superior quality of construction due to in-stu throwing of the entire structure and transverse division done in constant operation. 

  When we talk about the maintenance required for conventional systems.. It is really Very high as it requires regular repairs of mortars of the wall, painting of internal and external walls due to water leakage when we compare the Mivan system of construction the maintenance is almost negligible as there is superior concrete used that requires almost no repairs.  Even if we compare the quality of finish the Mivan system gives you an excellent finish in which putting is not required.. With conventional systems the finish is very bad and for that reason putting is required.

 Even the safety features that come with the Mivan system of construction is superior as it is much more resilient to earthquakes as compared to the conventional methods of construction. Also, if you ever plan on changing the floor without expelling the props it is possible with Mivan and not with conventional methods of construction. 

We can conclude by saying that the Mivan construction system has all the elements needed for meeting the demand for efficient and sustainable housing. Quite a few properties these days have chosen this method of construction in India itself! 

Mivan Formwork erection process:

Placement of Aluminum Formwork

Mivan formwork is majorly used in the places where the whole structure is made of concrete.

All formwork is cleaned and coated with approved real agents.

The wall reinforcing steel is placed with the floor slab.

Along with the wall reinforcing steel, prefabricated room-sized walls panels and floor slab panels are erected.

Plumb, level, and dimensions are checked.

The aluminum alloy slabs are accurately made as per the required sizes.

Spaces for windows, ducts, doors and other features such as staircases, façade panels, and chajjas are also integrated into these structures.

The forms are then joined together using the pin and wedge system, which can be dismantled quickly after the concrete structure is made.

2. Pouring of concrete.

After casting the forms, high-quality concrete is poured.

This concrete takes the form and shape of the cast.

At least two operatives should be on standby during concreting for checking pins, wedges and wall ties as the pour is in progress.

Special attention to be given while pouring concrete for dislodging of pins/wedges, slipping of props or overspill of concrete at openings.

3. Striking of Framework.

Normally all formwork can be struck after 12 hours of concreting.

First, the wall formwork is struck down, followed by deck formwork.

The removed formwork is cleaned with scrapers and wire brushes as soon as they are struck.

Once cleaned, it is transported and stacked properly for the next use.

Speaking about the features of the Milan Framework..

1. Load Carrying Capacity.. The load-carrying capacity of Mivan formwork is 7-8 Tonnes per square meter. Mivan formwork is lightweight and weighs around 18-20 kg per meter square.

 

2. Striking Time.. The striking time of vertical (wall) formwork is 12 hours after concreting or when concrete strength has reached 2N/mm2 and horizontal (deck) formwork is 36 hours after concreting or when concrete strength has reached 10N/mm2.

 

3. Durability.. As the panels of Mivan formwork are made of structural grade aluminum alloy, they are very durable and sturdy. A single component can be repeated around 200 times.

 

4. Cycle TimeHigh speed of construction can be achieved by this system that means faster completion of the project. Approximately, the times required to cast floor is 7 days with the use of Mivan formwork

There are several advantages of builders going the Mivan way. A few of them would be: High-quality formwork ensures consistency of dimensions.

On removal of the mold, a high-quality concrete finish is produced to accurate tolerances and verticality.

The total system forms the complete concrete structures.

Custom designed to suit project requirements.

Unsurpassed construction speed.

Panels can be reused up to 250 time

It can be erected using unskilled labor.

As there are advantages it would be to follow the laws of nature for it to have disadvantages as well.. a few of theThe concealed services become difficult due to the small thickness of components.

It requires uniform planning as well as uniform elevations to be cost-effective.

Modifications are not possible as all members are caste in RCC.

The large volume of work is necessary to be cost-effective i.e. at least 200 repetitions of the forms should be possible at work.

The formwork requires a number of the spacer, wall ties, etc. which are placed @ 2 feet c/c; these create problems such as seepage, leakages during monsoon.

Due to box-type construction shrinkage cracks are likely to appear.

The heat of hydration is high due to shear walls.

Affordable housing projects were given a major boost this year in the Union Budget 2017-18. Since the affordable housing sector is the most incentivized segment for both developers and buyers, many reputed developers are now launching projects in the affordable segment. More than 10 million affordable houses are expected to be built in rural India by 2019. This is a huge opportunity to showcase the value of Mivan technology.

15
All you need to know about the Model Tenancy Act.
29 / Nov / 2020
 All you need to know about the Model Tenancy Act.

Mainly what you need to know about the Model Tenancy Act is that The Ministry of Housing and Urban affairs have drafted a ‘Model Tenancy Act’ which envisions to balance the interests of both the Landlord and the Tenant so that there accountable and transparent system to rent out the premises in a very disciplined manner.

The key factors that the Model Tenancy Act consists of is that: 

• This act mainly focuses on the tenants refusing to move out of the property after the agreed rental period expires. If this happens the landlord has all rights to claim double rental value for 2 months and four times of the monthly rental after which. This will help put to rest one of the biggest fears landlords have while giving out properties for rent.

• The new Model Tenancy Act 2019 aims to keep the rental deposit at 2 months of the agreed upon rental value for residential and 1 month for any other kind of properties. Although in cities like Bangalore where landlords ask for at least 6-7 months of rental amount as deposit. It is going to become hard for them to adjust and also they will have a fear of not recovering the cost of any major damages caused by the tenant during his period of stay. 

 

• The Act emphasizes on the fact that the landlord cannot refuse to provide essential utilities and access to common facilities.

• The landlord also cannot increase the rent without giving a good 3 month notice period. This is another big advantage of the Model Tenancy Act.

• Within Two months of executing the rental Agreement it is mandatory for both parties to Intimate the rent Authority about the tenancy agreement. The rent authority within 7 days will issue a Unique Identification Number to both parties. 

• Mainly, It must be noted that Existing tenancies will not get impacted as draft model tenancy act will be applicable prospectively. 

 

I don’t think that the draft Model Tenancy Act is skewed specifically towards the tenant or the landlord. Rental housing has been a major gap in the Indian real estate market and what has kept investors and buyers from tapping into real estate for rental returns hasn’t just been low returns but the lack of sufficient legal enforcement of the rental agreement. This Act has been brought in to address these deficiencies in the existing rent control laws. If you look at some of the major announcements—like the security deposit being capped to a maximum of two months’ rent, or the heavy penalty on the tenant if he fails to vacate the premises, or how landlords can’t arbitrarily hike up rentals mid-lease without sufficient cause and notice—it is clear that the intention is to balance out the common problems faced by both parties. The real concern here is not so much about whether it is skewed towards one party but about the implementation. What is required for the success of the Act is the complete implementation by all the states.

The Model Tenancy Act is a step forward from the archaic laws governing rent control. While the tenant has a cap on security deposit and protection from arbitrary increases, the landlord is entitled to stiff penalties for failure to vacate and transparent repossession mechanism. However, the draft stops short of addressing the weak contract implementation. In its endeavour to strike a balance, the draft seems to err on the side of caution by tilting the commercial deterrents in favour of the tenant, such as cap on security deposit.

For the past several years, yield on residential investment has not been commensurate with the risks involved with the rental housing sector. The need of the hour is to provide an enabling framework for emerging business models like co-living, while providing a time-bound dispute resolution mechanism for traditional tenancy formats. The government has an opportunity to make this a more comprehensive and enabling legislation to achieve the Housing for All objective by 2022.


 

At first look, the draft rules do seem to be favourable for both tenants and landlords. However, there are some inherent challenges. The cap on the security deposit can become a pain point for many landlords—in cities like Bengaluru, a ten-month security deposit (with some scope for negotiation) was the accepted norm. If a tenant defaults or causes significant damage to a property, two-months security deposit may not cover the expenses the property owner incurs.

While the government lays down the basic policies, the exact rules will likely change within each state since land is a state subject. Like we saw in the highly lopsided roll-out of Rera, the Model Tenancy Act 2019 may lose its real purpose if states do not follow the basic guidelines and try to dilute them.

The draft aims to bring in transparency in the highly unorganised rental space and leaves little room for either party to take advantage of the other. Among the many benefits that the draft proposes for both sides, we feel it is more tilted in favour of the tenant who is usually treated as the underling by both landlord as well as brokers.

The draft caps the security deposit to a maximum of two months’ rent in case of residential property and to a maximum of one month’s rent in case of commercial property. There is no standardisation of security deposit across cities and this proposal is quite relieving. Issues such as increasing rent, eviction of tenants, etc. have also come within the ambit of this draft and a landlord cannot increase the rent arbitrarily or ask the tenant to vacate without prior notice. The draft Act also favours the owners in multiple ways. An efficient system is in place to curb challenges faced by them due to unscrupulous tenants who do not vacate in time and do not leave the property in a good shape.

For this reason, the Model Tenancy Act, like RERA, may well become a process rather than an event, and may need several course corrections to reduce regional dilutions before it becomes a force to reckon with.

16
Investing in Residential or commercial properties. What is better? 
29 / Nov / 2020
Investing in Residential or commercial properties. What is better? 

Investing in Residential or commercial properties. What’s better? 

What’s better? Investing in commercial properties or investing in residential properties. This is a very important topic for any potential investor who is looking out for making an investment in real estate. We here at OSS have discussed everything that you need to calculate before you do make the investment in this market.  

Investing in real estate in itself is very good for your portfolio as it’s another kind of diversity you can have in the form of investments, This helps in dividing your risks! By making investments in real estate you can benefit from the fact that Real estate is only a market that is comparatively least affected in times of economic crisis. Real estate investments can be classified into two forms and they are: 

Residential Investments

Commercial investments

 

Residential properties.. when talking about the rental yield it gives you about 2.5-3%. Which really isn’t that bad. But, keeping in mind this is the rental yield we are discussing here!  There are many benefits of investing in Residential properties for example.. It is very easy to get a loan from banks for the purchase of these kinds of properties. Also the leasing process is much easier. In comparison with commercial properties there is a low holding period as compared to commercial property. Now, talking about the draw-backs of investing in residential properties are that you have to make an initial investment of getting the interiors done for even giving it out for rental purposes and even after that the rental yield is not that high. Also, mainly a rental agreement in residential properties cannot exceed a period of 36 months. Also,  buying a residential property is comparatively cheaper.

So, speaking about commercial properties.. It has a brilliant rental yield of 6.5-8.5% which is an excellent yield in terms of commercial projects in real estate. Also, it is possible to lease a commercial property out for long-periods that is up to 9 years. The commercial value is not very volatile! That means there are no major fluctuations with these kinds of properties. But, again that can be contemplated  in a good and a bad way! The property values tend to be stable for prolong periods of time and also for it to be a commercial property it must be of a specific minimum size and also it is very difficult to sell as there are very few buyers for commercial properties in the market! 

We must also keep in mind that anytime we take a loan for buying any of these properties be it.. Residential or Commercial there is a provision given to the individual while paying-off his Income tax these provisions come under Section 24 and 80C of the Income Tax Act.

So, after looking at the pro’s and con’s of both kinds of properties.. We can say that both have their own advantages and disadvantages. One has a higher yield but is harder to sell and the other has a lower yield but is easier to sell. So, it all depends on the perspective of the investor that what kind of risk is he willing to take.

Traditional residential loans, or residential mortgages, are typically distributed by banks to borrowers. Unlike residential mortgages that are typically between banks and the individual buyers, a commercial mortgage is made to a company. For tax purposes, it is also usually in the best interest of the borrowers to sign as a representative of a business entity — since the property is zoned for businesses uses.

 In addition, commercial loans are riskier (in the eyes of lenders) than residential loans. This makes a commercial loan’s interest rates higher and terms shorter. Why? Because there is a whole secondary market for commercial lenders that is separate from traditional banking institutions.

 In order to qualify for a commercial loan, investors are required to have a business plan as well as a solid credit score — for the most part. Commercial lenders are more concerned with the property’s projected cash flow than residential lenders are. They will want to know who will pay utilities, what type of maintenance will be required, and more before approving the loan.

 Finally, the terms, conditions, restrictions and penalties vary greatly between commercial and residential loans. Homeowners usually finance their properties over lengthy periods of time. — most commonly with 30-year fixed rate mortgages. Although residential buyers have many other loan options available, this time frame is ideal due to a longer amortization period that creates smaller monthly payments. Residential loans are typically amortized over the life of the loan, so the loan is fully repaid at the end of the term. Unlike residential loans, terms for commercial loans typically range from five to 20 years, and the amortization period is often longer than the loan term. Commercial lenders are also able to customize the loan repayment schedule to each borrower’s specific requirements.

Choosing between a commercial vs residential investment property is no easy feat to tackle, especially because both come with their own set of benefits and drawbacks. Both will diversify your portfolio, both come with significant tax benefits, and both will bring you one step closer to achieving your goals of financial freedom…So how is an investor to choose?

 The answer to that question ultimately depends on what it is he or she wants to gain by investing in real estate. Investors should take some time to think about their short and long term goals. If they are looking to make a quick buck to start, rehabbing or wholesaling a residential property might be the way to go. If, on the other hand, they are in it for the long haul and looking to achieve passive income, commercial properties offer attractive benefits.

 If you want to earn the most returns, you might want to consider investing in commercial real estate. On the other hand, residential properties may be more appealing if you’re more comfortable working on a small scale. Thinking about how much time you’re willing to devote to your project as well as your risk tolerance can make it easier to decide where to invest your money.

As quoted by a few leading real estate experts.. Real Estate market is expecting push post-Lok Sabha Elections 2019 as the sops — reduction in GST, reduction in RBI Repo Rate etc. — announced by the central government ahead of the general elections 2019 notification would start showing its effect on the sector. In fact, the private equity and venture capital funding agencies have got a clue about the government intentions in regard to the real estate sector hence the question has become ripe into the Indian real estate sector as to which segment is a better investment option: commercial real estate or residential real estate? The industry insiders say that Real Estate Investment Trusts (REITs) are enough to indicate that commercial real estate is poised to give a better return for both individual and retail investors while the residential real estate will remain a hot destination for the individual investors. 



 

17
Area analysis of all the corners of Bangalore.
29 / Nov / 2020
Area analysis of all the corners of Bangalore.

The area analysis of all the corners of Bangalore is mandatory before moving into the city. As it will give you a bigger picture of what Bangalore really is. Bangalore as well can see has people from all corners of the country coming down for their own personal reasons and a few even choose to settle down. This is a guide for those people who actually choose to stay!

Bengaluru North.

Bengaluru North is the most recent up and coming areas that Bangalore has witnessed as it is that side of Bangalore that has still not been tampered with much! It is a place for people who would love to stay in the nature inside the city limits of the concrete jungle. The Airport is the closest from this are! It takes a maximum of 25-30 minutes to get to the Airport from this side of the city. One of the special Economic Zones (SEZ) in India is coming up in Bangalore North along with a lot of interesting Residential Projects.

 The drawbacks of this area is that there is a shortage of water in that side of the city. Not as much as that, that it could be called an area with completely No Water. The other point is that it is a little far from the heart of the city also it is not yet a completely established area! Parts of that side of the city even have people farming and there are people taking care of their herds. Apart from this it is one of the best areas to Invest in. Localities like Hebbal, Hennur and Thannisandracome under this side of the city!

Bengaluru East. 

This side of the city is very well-developed. Has all amenities that a good locality would have like good shopping malls, classy Hotels and what not. This area has the whole IT Hubs based inside it. This area has all the large companies that are based in Bangalore. Hence, people who come from other places and are working the one of the technology parks inside there prefer living In that side of the city! As there is so much in flow of the corporate crowd there are many people looking out for rented flats in that area. Which suggests that, that is a very good area to invest in for earning a good rental yield.

 Talking about the drawbacks of the area there is A LOT of traffic people face on that side of the city which tells us that there are high levels of Nox in that area which obviously ishazardous to health and more over it is not a place for people who are looking for some good greenery around them.

Bengaluru West.

This is the oldest area in Bangalore. It has a few of the heritage spots of the city in it! Staying on this side of the city will give you the true essence of staying Bangalore. The majority of people who live there have been staying there for quite some time. The real taste of Bangalore in terms of food also can be enjoyed this side of the city! This side of the city is also very well developed as the World Trade Center coming within this jurisdiction. This area also gives you a very good connectivity to all the sides of the city. 

 Every area has their own kind of drawbacks. So, the drawbacks faced by this area are that it is very Expensive to buy a property in this side of the city and also that it isn’t suitable for people working in the Malleshwaram, Rajajinagar and Mysore road. 

Bengaluru South.

This side of the city is a little like Bangalore North the only difference being that it is actually possible find out that Bangalore used to be a hill station by looking at this side of town. The roads go uphill and downhill in many complicated ways! This area is a very calm and serene place. On this side lies the Art of Living Ashram that people from various countries visit. In case anyone is planning on building their own house in a free and open space. This is the place to invest!

  Although, this side of town is not a really great place to invest due to various reasons. One of the reasons is that it is 50 Kms from the airport and with the traffic conditions in Bangalore. 50 Kms is too much to handle! Also, there is not much of the commercial development happening on that side of the city! A few areas on this side of the city are: Bannerghatta, Kannakpura and many others.

Bengaluru Central.

Central Bangalore is one the BEST localities to stay in. As it has everything! This is the center most part of the city because of which the connection to any part of the city is unbelievable! There are places like Brigade road, Indiranagar and Shanthi Nagar that come under this jurisdiction. This area has one of the best crowds of Bangalore living in it. As there are both residential and commercial requirements of people over here It makes either kind of investment fruitful! The rental yield in this area is just spectacular!

 The only drawback is that it is expensive in a very deadly manner. Not everybody can afford purchasing in this area as even the rent for any property is extremely high and one more thing is that there is very little open space in this locality. It is in the heart of the concrete jungle.    

From luxurious apartments, villas, and plots to affordable housing, Bangalore is home to it all. With an abundance of real estate options available in this city, it might be difficult to select the best investment option. This blog will help you invest in the most preferred residential apartment you can call home. The north, south, east, and west zones are the strong pillars of Bangalore. Over the years, all of the zones have witnessed tremendous infrastructural growth and development. Supported by phenomenal transport routes, malls, parks, educational institutions and many more social amenities, the IT capital of India has turned out to be the perfect destination to invest in the real estate sector. Builders, investors, and home buyers believe and have already experienced whopping returns on their investment

18
Buy a flat or rent a flat?
29 / Nov / 2020
 Buy a flat or rent a flat?

 Buy a flat or rent a flat? This is a question everyone ponders upon, as in certain cities people only stay for work purposes. It’s true that buying is always as a second opinion for people as compared to renting. But, with Rentals there is a sure shot guarantee that there will be no return. On the other-hand there is Buying where there is a higher chance of you getting a good or a reasonable return!

  The disadvantages of buying are pretty limited! The #1 constraint is the interest you will paying. Although, the current government is taking certain steps for reducing the rate of interest of the housing sector. Yet there isn’t such an impact for the people who are not in the super-rich category.

  Looking on the brighter side. There is always the option of Purchasing. There are quite a few advantages of buying a house. Owning a house gives an individual the long-term benefits of security, equity and potential growth in personal wealth. The value of the real estate asset is bound to increase with a given period of time which gives you the luxury of enjoying profits if given a certain period of time. Also, this as well comes with its own risks.

   Moreover, it depends on how you look at the matter. If you’re looking out for a short-term investment, then the best suggestion for you would be renting or If you’re looking out for a long-term investment then the option advisable to you would be Buying at any given day.

  In a country like India where people prefer living with their family. Those people wouldn’t prefer moving around as much. As we all know moving is always a pain to carry out. In these cases, also people do prefer buying as it gives them the sense of security and stability. 

   So, coming back to the cons of buying a house. They would be that you would be bound to pay certain amount every month no matter what the cost. Technically speaking that means a certain amount being blocked from your account before your pay-check even arrives. One last thing, maybe that. In certain cases, if the property is not well-evaluated before buying an individual ends up paying more as interest amounts as compared to the appreciation incurred by him.

 

19
Investing in Residential or commercial properties. Whats better?
29 / Nov / 2020
Investing in Residential or commercial properties. Whats better?

What’s better? Investing in commercial properties or investing in residential properties. This is a very important topic for any potential investor who is looking out for making an investment in real estate. We here at OSS have discussed everything that you need to calculate before you make the investment in this market.  

Investing in real estate in itself is very good for your portfolio as it’s another kind of diversity you can have in the form of investments, This helps in dividing your risks! By making investments in real estate you can benefit from the fact that Real estate is the only market that is comparatively least affected in times of economic crisis. Real estate investments can be classified into two forms and they are: 

1. Residential Investments

2. Commercial investments

Residential properties.. when talking about the rental yield it gives you about 2.5-3%. Which really isn’t that bad. But, keeping in mind this is the rental yield we are discussing here! There are many benefits of investing in Residential properties for example.. It is very easy to get a loan from banks for the purchase of these kinds of properties. Also the leasing process is much easier. In comparison with commercial properties there is a low holding period as compared to commercial property. Now,talking about the draw-backs of investing in residential properties are that you have to make an initial investment of getting the interiors done for even giving it out for rental purposes and even after that the rental yield is not that high. Also, mainly a rental agreement in residential properties cannot exceed a period of 36 months. Also, buying a residential property is comparatively cheaper.

 So, speaking about commercial properties.. It has a brilliant rental yield of 6.5-8.5% which is an excellent yield in terms of commercial projects in real estate. Also, it is possible to lease a commercial property out for long-periods that is up to 9 years. The commercial value is not very volatile! That means there are no major fluctuations with these kinds of properties. But, again that can be contemplated  in a good and a bad way! The property values tend to be stable for prolonged periods of time and also for it to be a commercial property it must be of a specific minimum size and also it is very difficult to sell as there are very few buyers for commercial properties in the market! 

 We must also keep in mind that anytime we take loan for buying any of these properties be it.. Residential or Commercial there is a provision given to the individual while paying-off his Income tax these provisions come under Section 24 and 80C of the Income Tax Act.

 So, after looking at the pro’s and con’s of both kinds of properties.. We can say that both have their own advantages and disadvantages. One has a higher yield but is harder to sell and the other has a lower yield but is easier to sell. So, it all depends on the perspective of the investor that what kind of risk is he willing to take. 

Commercial properties are great for those who have some business knowledge. If you understand a potential tenant’s financial history and goals, it will give you a better idea of what your potential earnings could be. Commercial properties can also offer great returns. These properties tend to have a larger annual profit than residential investments. Also, leases are usually for longer terms and there are options for renewal. Compared to residential properties, commercial tenants tend to stay longer, which can give a greater sense of stability for you as the owner.

One reason that is vastly taken into consideration is: Therental yield a property can give to a commercial property owner, while people have a lot of opinions about this feature of the commercial properties, here are a few condensed pointers for any future reference. Rental Yields may be better for commercial properties For commercial property like shop space, the rental yield that you can command depends directly on the human traffic in the area. Thus if you invested money in such a property investment, the monthly cash flow would be more than an equivalent costing residential property investment in the same area.

 

Improvements on the property Business tenants generally treat properties different from residential tenants. A business owner who is renting property would generally fix small defects in the property so that he can carry on business and would not bother the landlord about such small problems. But additionally, most small business owners would generally carry out small improvements in the property that could boost the property value of your commercial property.

An example of this could be the installation of a PBX System and wiring up the whole office for a local area network. This could save your new tenant a lot of time and could be used to give additional value to the terms of the rental that you are providing.

Now, let’s give a thought to the Residential Real-Estate side of the coin where we can see that it is a safer gambit as it used for personal purposes the maintenance costs need not go as high as it usually does in commercial properties. We will be discussing a few pointers which again can be used for any future reference while in any dilemma for making the right choice in the field of real estate. It is far easier to get a loan for residential real estate than commercial real estate because the residential real estate market is considered much more stable. Individuals and families always need a place to live. Businesses can more easily move, and you can lose far more money by picking a bad commercial tenant than a family that misses the rent one month. This means the residential vs commercial real estate investing favors residential real estate if you don’t have experience vetting tenants.

 

People will forgo credit card bills and cut their budgets to avoid being evicted. Commercial tenants may miss the rent for months, and it is difficult to evict them. Furthermore, you could lose commercial tenants whose bankruptcy costs you months of back rent. This means you’re more likely to continue seeing rental income from financially stressed apartment dwellers than commercial tenants.

We hope this gives you an insight about how the residential and the commercial real estate markets work. This could be your gateway into getting into this flourishing market.  

20
PMAY: Pradhan Mantri Awas Yojana (Subsidies for low-budget housing)
29 / Nov / 2020
PMAY: Pradhan Mantri Awas Yojana (Subsidies for low-budget housing)

This is a benefit that can be availed by certain buy buyers. One kind that can apply are the people who are living as an Individual Or Another case would be that of a representative of a family who have their Parents, Spouse and unmarried children. Although, there are other factors to be considered under this scheme to be eligible! I’ll be focusing on segments of earnings between 6Lacs and 18 Lac. 

So, for the folks in-between 6 Lacs and 12 Lacs have something they can apply for called the MIG-I application and as for the people whose earnings are not exceeding 18 Lacs They are eligible for applying the MIG-II application. 

  Speaking about the maximum claim you can enjoy with this scheme is precisely about 2.67 Lacs. But again it gets categorized on the basis of what application you are eligible for. There is a different percentage for different applications. And what applications you can apply for depend upon the applicant’s earnings.   

  Another catch to  this scheme is that you have to opt for the tenure that is for a period of 20 years. There are 13 states that can apply for this subsidy. The bigger picture of the Government is to expand this scheme for all the citizens in India.

There are a large variety  of benefits individuals are given the option to avail. The list goes on as down below..

1. Loan Amount: Those looking to avail a loan within the EWS and LIG, can avail a Home Loan of up toRs. 25 lacs including insurance. Those within MIG can avail a home loan up to Rs.140 lacs including insurance (minimum loan amount of Rs. 50,000 excluding insurance).

2. Tenure & Term: Home Loans can range from 1 up to 30 years in its tenure. The term, however, does not extend beyond the retirement age or 60 years, whichever is earlier (70 years for self-employed individuals).

3. Purpose: Credit Linked Subsidy will be available for housing loans availed for new/ resale purchase of home, construction loan for all segments and additionally for EWS/ LIG, extension/improvement of rooms to existing dwelling can be done.

4. Interest Subsidy: For EWS and LIG, the credit linked subsidy will be available only for loan amounting up to Rs. 6 lacs which would be eligible for an interest subsidy at the rate of 6.50% p.a. (Approx.Rs. 2.67 lacs), for tenure of 20 years or during the tenure of loan whichever is lower, to the eligible customers under the scheme. *

For MIG 1 customers, subsidy will be applicable for loan amounts up to ` 9 lacs and such loans would be eligible for an interest subsidy at the rate of 4% p.a. for a tenure of 20 years. For MIG 2 customers, subsidy will be available for loan amounts up to ` 12 lacs and such loans would be eligible for an interest subsidy at the rate of 3% p.a. for a tenure of 20 years.

5. Processing Fees: Processing Fees on loan amount as per maximum subsidy applicable (as per customer applicability) to be refunded once claim is received from NHB.

6. Easy Repayments: There are 2 options for repayment of the loan based on the EMIs payable.

a.) Through ECS (Electronic Clearing Service) based on standing instructions to your bank.

b.) Post Dated Cheques (PDCs) drawn on your Savings/Salary account.

7. Home Loan Tax Benefits: Resident Indians are eligible for certain tax benefits on principal and interest components of a home loan. As per Income Tax Act 1961 rules, the current applicable exemption under section 24(b) is Rs. 2,00,000/- for the interest amount paid in the financial year and up to Rs. 1,50,000/- (under section 80 C) for the principal amount repaid in the same year.

8. Applicant and Co-Applicant: Home Loans can be applied for by an individual. The loan amount can be enhanced by including an earning co-applicant. Female property ownership is mandatory for EWS/ LIG category but not mandatory for MIG category.

There are also problems faced by the initiative. Them being.. In July, the Prime Minister's Office called a meeting to review the housing scheme. During the meeting, officials pointed out that lack of funds with the NHB was a major concern.

However, when asked for a response, ministry officials denied any shortage of funds and said the subsidies are being cleared in a timely manner through the extra budgetary resource (EBR) allocation of Rs 60,000 crore.

In the current financial year, the budgetary allocation for the housing scheme is Rs 7,000 crore, which has been completely utilised.

Sources however confirmed to India Today TV that Rs 28,000 crore has been withdrawn from the EBR to disburse subsidies. While this has been done, the demand for CLSS has risen by almost 285 per cent in comparison 2017-18. Reluctance of banks and NBFCs to supply funds for subsidies is evident from the fact that in July this year, the EBR required for the Housing and Urban Development Corporation (HUDCO) wasn't approved by the department of economic affairs. The source for this information being India Today. 

Applicant’s family comprises husband, wife, unmarried sons and/or unmarried daughters.

**For the NPV calculation the time period under consideration is 20 years or actual tenor of the loan, whichever is lower. The savings highlighted in this booklet are based on the current rules set by Govt. of India, which may change as per the directive of the Government. Please get in touch with our bankers at the site for additional details on eligibility and application process.

This document is informational only and is based on data as available on the date of printing. OSS HOMES Group does not bear any responsibility for the accuracy of the information in the document. Folks are requested to check their eligibility and other details of the scheme with their bankers.

21
India REIT Launched. Should you invest?
29 / Nov / 2020
India REIT Launched. Should you invest?

India’s first REIT (Real Estate Investment Trust) has finally been launched. This is a big step in the field of real estate that will take it to the next level. Now, is it a good investment option for you?

  Now for those who do not know what REIT is and who started it up in India.. Here it goes! REIT’s are companies that own or finance income generating properties across a wide range of property sectors. It is an obvious fact that these companies need to meet a certain range of requirements just to start-off. Most of the REIT’s offer a wide range of benefits to the consumers. The company that started REIT’s in India is called the Embassy Group, a Bangalore based company that offers beautiful luxury apartments. 

 REIT’s enable individuals to generate income and capital appreciation with money that is a small fraction of what would really be required to buy an entire property. This is something like a mutual fund but it’s something related to it just on the surface. So, basically when you invest in REIT you technically own a chunk of land that is going to be used for generating money and an appropriate share based on your investment will be shared with you.

It is very important for REIT’s to be listed on the stock exchange for obvious reasons, that is for it to be sold at any given time. The one issue with it is LIQUIDITY. As selling at any given time will not give you the expected returns as planned earlier. This also requires to be perfectly timed while selling!

 REIT’s can only be judged with a lot of experience and a track record of how it has performed over the years. Now, in India it hasn’t been very long since this has been launched so there is no track record or History that can be taken as reference. But, In other countries like The United States have had very fruitful returns after making investments in this field!

 Which again brings us back to the point, Should we Invest? So, the answer would be Yes and No. Why? Because stats in the other countries where this IPO was launched went on to be the big game players which is in favor of the Yes and No because there is no assurance that it will do good even in India as there are no past stats. 

India’s commercial realty market has been on an upswing over the past few years. Well-managed, high-quality properties with an average tenancy of three years and nearly 90% stable occupancy have good cash flow visibility. They have, therefore, seen more investments by global private equity (PE) funds. Commercial real estate continues to see positive trajectory with improved profitability and comfortable leverage. Over the next 2-3 years, too, well-managed Grade A properties are likely to see 5-10% escalations per annum.

 

India’s top 10 commercial real estate owners alone, which include both developers and funds, have a portfolio of around 184 million square feet (msf) translating into an annual lease rental income of over Rs 17,000 crore. The portfolio of steady cash flows has the potential to raise as much as Rs 1.5 lakh crore through the real estate investment trust (REIT) route.

 

While investor interest in the residential segment is declining fast because of limited property price appreciation and inability to monetise assets, REITs can be a potential investment option, providing assured and ongoing returns. REITs, which invest primarily in completed, income-yielding real estate assets, are similar to mutual funds, and can be listed and traded on stock exchanges. Through REITs, PEs can divest at the portfolio level instead of individual assets. This would sync better with their typical exit timelines of 7-10 years.

While regulations allow REITs to have a minimum asset valuation of Rs 500 crore, not all commercial portfolio developers/ owners will take the route. Portfolios with minimum rentals of over Rs 1,000 crore, translating into asset valuation of Rs 10,000 crore, which can absorb higher transaction costs and comply with regulations, are more likely to use this option.

 

REITs account for nearly 50% of the capitalisation of the real estate industry in markets such as Singapore and Japan, where they were introduced nearly two decades ago, while they account for 96% of the market capitalisation in the US which pioneered REITs in the 1960s. These trends also underpin the opportunity for India considering the real estate sector’s market capitalisation (cap) of nearly Rs 1.5 lakh crore (ex-REITs). However, lack of incentives or regulatory support, like in Hong Kong, can restrict this growth. REITs were introduced in India in 2014, and over the five years a spate of regulatory changes have made it attractive to developers while also protecting the interests of investors.

 

However, given the high level of compliance and stringent regulatory requirements for REITs, developers with smaller commercial portfolios would continue to use lease rental discounting loans, which are accessible at rates as low as 9%. Furthermore, developers who prefer to retain the capital appreciation opportunity and not dilute their stake, will not prefer the REIT route.

“Global investors have had their sights set on India’s burgeoning commercial real estate market for some time,” said ShobhitAgarwal, CEO at Anarock Capital. “With the success of the Blackstone-Embassy REIT, a positive signal has gone out to global investors to stake their claim. At the same time, REITs have opened new investment avenues for domestic retail investors.” 

Agarwal said the success of REITs in India could have an overarching effect on the entire real estate sector. 

Of the total capital flows into the sector over the last five years, 70% has gone into rent-yielding assets. According to research by CRISIL, JLL, ANAROCK Capital and JM Financial, the Indian REIT market may grow to $22-40 billion over the next few years. 

“With the underlying commercial office space growing at 18% annually over the past 19 years along with rent escalation (generally 5% every year), we still have one of the lowest rental rates, office space and capital values across major global cities,” said Suhas Harinarayanan, real estate analyst with JM Financial. “We believe the demand for grade A commercial real estate remains a secular trend and REITs offer the best way to play the theme.”

22
Internet vs. Traditional Buyers
29 / Nov / 2020
Internet vs. Traditional Buyers

If you haven’t realized it by now, we’re junkies for real estate data.  Our latest fix comes from the California Association of Realtors, or CAR, which recently published their 2006-2007 Real Estate Research Report on Internet vs. Traditional Buyers.  This study is chock full of fascinating data points, and here are a few we found most interesting:

  • People who use the Internet as a significant part of their homebuying process (called “Internet buyers”) increased from 28% of all buyers in 2000 to 70% of all buyers in 2006.
  • Internet buyers spend roughly three times longer than traditional buyers in contemplating a home purchase and in touring homes and neighborhoods before contacting a real estate agent.
  • Internet buyers also spend, on average, about 2 weeks looking for homes with a real estate agent, versus 7 weeks for a traditional buyer.
  • Internet buyers look at fewer homes with their real estate agent than traditional buyers; about 7 homes for Internet buyers and about 15 homes for traditional buyers.
  • A whopping 72% of Internet buyers who used an agent used the Internet to find a specific real estate agent.
  • In terms of agents interviewed prior to selecting an agent, Internet buyers interview about 1.5 agents on average versus 3.3 on average for traditional buyers.
  • And here’s one that really blew me away: 96% of Internet buyers were either very satisfied or satisfied with the overall process of finding a home versus 66% of traditional buyers.  On top of that, 97% of Internet buyers said that overall they were either very satisfied or satisfied with their agent versus 57% of traditional buyers.

Now bear in mind, this study was conducted in California only, and given the very local nature of real estate there could be very different trends in other parts of the country.  All of this brings me to some burning questions that I have for you, Zillow Blog readers:

  • If you’re a recent homebuyer or someone in the process now, are you using the Internet to help in your search?  If yes, what are you using it for?  Is it helping you save time or do you feel like it’s using up more of your time?  What would you love to be able to do online that you can’t now?
  • If you’re a real estate agent, do you think that the Internet buyer is really different from the traditional buyer?  Do you handle these buyers differently?  Why do you think it is that Internet buyers come away so much more satisfied with the homebuying process and with you?  And finally, are you tapping into the Internet to find clients? How?
23
Simple ways to check Genuity of a Property
29 / Nov / 2020
Simple ways to check Genuity of a Property

After short-listing the property it is very important for an individual to check the Genuineness of a property. It is better to maintain a check-list while doing so.. This will help keep track of what task is completed and what’s not! This will help you properly understand the process of buying a house! 

 We here at OSS have simplified it into simple steps that you can refer to and go ahead with your purchasing process of the house.

  1. Check the Title Papers.  

It is mandatory to have a check of the legal documents of a property before you make the payment for the same. The most important thing is to check if the Title is clear or not. It is suggested that you go to a property Lawyer with the legal documents for staying on a safer side!

  1. Check if it is Approved by Good Banks. 

Another way of knowing if the property is legally clear for purchase is to have a look if it has been approved by leading banks. Banks only Approve properties that have all the legal clearances and valid documents. 

  1. Check for any loans or mortgages.

In case of resale, the previous owner does have the option of taking an additional loan against the property he owns. Be informed enough to know if the property has ever been mortgaged or not. This also is a pretty important point. 

  1. Check the constructed and sanctioned area. 

Before going ahead and buying the property it is mandatory to ask the builder for the sanctioned plan and what you must do is to compare it with the actual built-up area. In some cases, there are illegal constructions which are not in accordance with the Sanctioned plan. 

  1. Check for encumbrance certificate.

An encumbrance certificate consists of all the details of previous registrations which a potential buyer can get from the sub-registrar’s office. It is a proof of free ownership and it testifies that the property is free of any hassles and Is a green signal for purchase.   

  1. Check if Property Tax has been cleared in full. 

Property taxes are usually paid on an annual basis, It goes a long way to check if it has been paid for the tenure he owned the apartment as it shows how diligent he is as an owner and if he has paid all the taxes it gives a stamp of trust for making any kind of transactions. 

There is also another thought and decision making process one must keep in mind to make all the above stated points go as smoothly as possible! What is a fake seller and why would anyone want to knowingly waste time and money on something so lame? It may seem like a bogus idea, but fake sellers are out there. Trust us, we know. From our short-lived personal experience to boot! So here’s the rub. Fake sellers can easily seem like real sellers. They do all the things a real seller would, such as put the house on the market, place FOR RENT signs on the lawn, have an agent and host open viewings. However, whether knowingly or unknowingly, they waste their time and money doing all of this because they are not really READY to sell. If you don’t know how to detect fake sellers, then you cannot avoid them. And if you don’t avoid them, then you may waste precious time and money to fruitlessly negotiate buying a house that isn’t really for sale. The number one reason that people cannot sell their homes is because of a grossly high asking price. When you hear that an owner is having difficulty selling their home at such a high price, beware! As with the case of our first loft offer, what it actually means is that the seller is refusing to accept the market’s opinion of what their house is worth. They may have an alternative motive, such as making up for the costs they’ve spent to upgrade their place. Or just to try to get more money from a buyer who knows nothing about the current market. This, by the way, is different from real sellers who mistakenly place too high of an asking price. Real sellers will wise up over time. Fake sellers will not. Our advice is to move on and go ahead and get in touch with a channelling partner who is really willing to take the troubles of a new house buyer and get him through without feeling any hassles in a safe and secure environment. 

Getting a seller who is motivated is important. Most sellers are motivated by a life change, such as a job transfer, a recent marriage or divorce, retirement, etc. Having a REALLY motivated seller makes it better for the buyer, because they will have a better chance at negotiation. Our fake seller was obviously not motivated at all, which made it easy for him to be uncompromising. Lack of motivation is a giant red flag. Run the opposite way, especially if you hear them say “they are just testing the market”.

My best advice is to do the same as we did. If you find yourself dealing with an unrealistic, unmotivated, and uncooperative seller, it’s time to walk away. Find something else. Maybe that seller will wise up, but then again, maybe not. You don’t want to waste your time and energy trying to coax reason into a seller like that.

Plus, you may find that it ends up being a blessing in disguise and you find a property that checks off even more boxes! Like our customers did! In the end we can give you a tip on how you can actually boost your skills on how to catch a scam that may be out there. 

You’d like to think the average web user is sufficiently well informed to recognize a scam when he or she encounters one, but it’s not true. Scammers wouldn’t continue to post these advertisements if they didn’t work to some extent, so fraudulent listings surface everywhere. You shouldn’t feel bad if you get taken in by a scam. Even people who have done their homework and have extensive experience in the real-estate industry can be duped by a sophisticated advertisement. “Consumers are now more aware of scams, but because scams have gotten more sophisticated, consumers are not sure they know how to avoid them,”  So, keep in mind if something feels too good to be true be aware. There may be something on the other side that may be waiting to steal all your hard earned fruits and time. 

24
Why Brigade Cornerstone Utopia is Best selling in Bangalore
29 / Nov / 2020
Why Brigade Cornerstone Utopia is Best selling in Bangalore

Brigade Cornerstone Utopia is a brand-new residential venture by Brigade Groups, a brand well known for its innovative and unique endeavours. Brigade is one of the leading real-estate firms of India head-quartered in Bangalore. The firm has vast expertise in various portfolios that includes Residential, Offices, Retail, Hospitality & Education sectors. The Group has also been consistently ranked among the 100 Best Places to Work in India for 8 years in a row. The awards and recognition received by Brigade Group across various horizons mirror the accomplishments of Brigade as a proven brand, well established and authentic strengthened with excellent customer service and immaculate build quality.

Brigade Cornerstone Utopia in Whitefield, Bangalore East by Brigade Group is a residential project.The project offers Apartment and Studio Apartment with perfect combination of contemporary architecture and features to provide comfortable living. The Apartment and Studio Apartment are of the following configurations 1BHK, 2BHK and 3BHK, the size of 1 BHK Apartments in range of 782 – 799 sqft, the size of 2 BHK Apartments in range of 1097 – 1240 sqft and 3 BHK Apartments in range of 1538 – 1905 sqft. Brigade Cornerstone Utopia prize range from 36 Lakh - 1.06 Crore. The residential enclave Brigade Utopia features the very best in Brigade Group's luxury living segment. The project offers open Apartments with lavish highlights. The builder is ensured to carry a quality living experience to the community of Varthur Road, East Bangalore with brilliant architecture and an equivalent lifestyle in Brigade Utopia halcyon.brigade Utopia Location has amazing network and it is situated at the crux of Varthur Road – Balagere Road close to existing and forthcoming communities & facilities.

Brigade Groups is the most prominent real-estate firm of the India headquartered in Bangalore and has its operations in Mangalore, Mysore, Chennai, Kochi, Hyderabad and Chikmagalur, and a representative office in Dubai. Founded way back in 1986 by Shri M.R. Jaishankar, the firm has firmly established itself as the top real-estate brand of the country with vast expertise in property development discipline across Residential, Offices, Retail, Hospitality and Education Sectors. Brigade’s residential projects offer a wide range of luxury apartments, penthouses, villaments, senior living homes and fully integrated lifestyle complexes, mixed-use lifestyle enclaves and townships, premium residences, luxury apartments, value homes and urban studios. Brigade has received several national and international awards & recognitions and is well known as innovators and inventors to use technology as a catalyst for creating sustainable and scalable businesses in Real Estate Industry.

Out Of The Numerous World Class Amenities, The Significant Luxuries In Brigade Cornerstone Utopia Incorporates Landscaped Garden, Indoor Games, Cctv Cameras, Swimming Pool, Gymnasium, Play Area, Rain Water Harvesting, Club House, Tennis Court, Car Parking, Cricket Court, Basket Ball Court, Drainage And Sewage Treatment, Multi-Reason Hall, Guest House, Security, Visitor's Parking, Yoga, Aerobics And Meditation Room, 24hr Water Supply, Golf Course And Avenue Tree Plantation, There Are Number Of Benefits Of Living In Apartments With A Good Locality. The Location Of Brigade Cornerstone Utopia Makes Sure That The Home-Seekers Are Choosing The Right Apartments For Themselves.

The strategic location, it stands on, is the propertys biggest asset nestled comfortably in the opulent locales of Varthur Road near Whitefield, the project is much in demand since it is possible to access Brigade Cornerstone Utopia from every corner of Bangalore city. The projects location is exceptionally well-connected to different part of Bangalore, including Whitefield, ITPL, ORR, Marathalli, Sarjapur Road, Hoodi, and KR Puram, etc. A number of IT companies are located at Whitefied, thus boosting the propertys demand.

This wholesome smart township includes all elite features to be ranked as one of the leading ventures of Bangalore. The specifications associated with the project are of top-class and high-quality standards. May it be the in-housed High-street shopping and dining arena or the exquisite of multiplex with family entertainment & food court; Brigade Utopia stands tall to give an unparalleled housing accomplishment to its occupants over its peers. The premise includes extensive landscapings and provides separate access to residential wing thereby bestowing utmost privacy and security.

The specifications related to foundation, Flooring/tiling, Masonry, home security, joinery, lift, sanitary, painting, plumbing and electrical departments are of high-standards and quality. Each department is handled by group of skilled workers under the supervision of top Architects, Civil Engineers, landscape consultants and Structural Experts to deliver a product that tops in elegance and eminence.

Spreading over 47 acres of landscape this mixed-use and future-ready township luxurious project is designed to offer a different way of living with the tag of the green community of the town. The RERA approved project will comprise more than 4000 luxurious homes in G+26 floors structure of towers. Residents have a plethora of options to live as per their choice in studio apartments, 1, 2, 3 bedroom homes and senior living residences. Here each amenity is planned uniquely with the know-how of latest technology. What differentiates it from the rest of the developers' buildings is that its European themed building structure is different from other common residential apartments of the tech city Bangalore. A befitting place for highly well advanced IT gentry of the city.

 

Brigade Cornerstone Utopia township project is completely eco-friendly. Here residents can live in under complete natural atmosphere having all the ultra-modern amenities and can breathe fresh and pure air. The Bio-retention Pond, Medicinal Garden, Butterfly Garden, Wetland Garden, Sensory Garden, Natural pond, Respite Garden and Gazebo will give them the experience of living in a complete natural ambience. Living in a metro city like Bangalore one can hardly get such experience of nature. It is the greatest plus point for the resident here.

It is also a sustainable project where there is ample provision for wastewater treatment, rainwater harvesting tanks, solid waste management systems, solar panels and air quality metering. This unparalleled future township is so designed that residents don’t require to travel long distance for fun frolic and entertainment. A proposed multiplex with family entertainment and dining options, high-street retail are enough to engage them in the township of their own.

Brigade Cornerstone Utopia Varthur Road the neighbourhoods of Whitefield are highly developed with all physical and social infrastructures. Many reputed and outstanding schools, colleges, healthcare centres, multiplexes, luxurious hotels, restaurants, shopping malls, fuels stations are within the vicinity of Brigade Cornerstone. The most important part is that many Prestigious IT Tech Parks like Sigma Tech Park in Whitefield, Brigade Tech Park, and GR Tech Park etc. The other tech parks which are located in Sarjapura road are within 6 km distance which will hardly take 30 minutes to drive. The project is located in such a location where one can get an endless option to all the daily requisites. Another main reason for calling Brigade Cornerstone Utopia a royal township project is because within the premises commercial shops, Cineplex, and retail stores are also available.

25
Difference between Pre-qualified and Pre-Approved Home Loans
29 / Nov / 2020
Difference between Pre-qualified and Pre-Approved Home Loans

The difference between pre-qualified and pre-approved is that a lot but both the terms are inter-linked. Pre qualified is the first step to Pre-Approval.

Pre-qualification is not a Guarantee that you are being assured the loan. It just means that you may qualify for one!  In this step they take all your financial details they require for them to do the math and give you an amount that you would be eligible for. 

    After everything is done and if you are eligible they will further ask you about your goals and future prospects and give you the best interest rate possible. The pre-qualification is a verbal conversation between the loan buyers and Bank officials.

 In case of Pre-Approval the Bank will make an in-depth and comprehensive verification of the loan buyers credit scores, annual income, income over the last few years and many other factors. The process isn’t done verbally and also isn’t based on the details given by the loan buyer over the phone! Here, the banker will do a thorough background check of the loan buyer and only then approve the loan process for the individual.

To conclude we can say that in the case of Pre-qualified loans you are not completely entitled to getting that loan. It is NOT a sure thing. Although, receiving a pre-qualified request means that you are above the crowd. Now, in the case of Pre-approved loans you have almost no constraints! But again, the bank holds all rights to deny you that loan at any point given and after which customers may argue but on valid points. Not on grounds if there has been something wrong detected at the end of the process but grounds where the reason has not been made clear to the individual or applicant.

Pre-Qualified is   Getting pre-qualified involves supplying a bank or lender with your overall financial picture, including your debt, income, and assets. The lender reviews everything and gives you an estimate of how much you can expect to borrow. Pre-qualification can be done over the phone or online, and there’s usually no cost involved. It’s quick, usually taking just one to three days to get a pre-qualification letter. Keep in mind that loan pre-qualification does not include an analysis of your credit report or an in-depth look at your ability to purchase a home. It’s based solely on the information you hand over to the lender, so it doesn’t mean much at all if you don’t provide accurate data.

The initial pre-qualification step allows you to discuss with your lender any goals or needs you might have regarding your mortgage. Your lender can explain your various mortgage options and recommend the type that might be best suited to your situation. Your pre-qualified amount isn’t a sure thing, because it’s based only on the information you’ve provided. It’s just the amount for which you might expect to be approved. A pre-qualified buyer doesn’t carry the same weight as a pre approved buyer, who has been more thoroughly investigated.

Pre-qualifying can nonetheless be helpful when it comes time to make an offer. “A pre-qualification letter is all but required with an offer in our market,” says a source.

. “Sellers are savvy and don’t want to enter into a contract with a buyer who can’t perform on the contract. It’s one of the first questions we ask of a potential buyer: Have you met with a lender and determined your pre-qualification status? If not, we advise options for lenders. If so, we request and keep on file a copy of the pre-qualification letter.”

 

Pre-Approved is Getting preapproved is the next step, and it’s much more involved. “A pre-qualification is a good indication of creditworthiness and the ability to borrow, but a preapproval is the definitive word,” says a source.

You must complete an official mortgage application to be preapproved, and you must supply the lender with all the necessary documentation to perform an extensive check on your financial background and current credit rating. The lender can pre approve you for a mortgage up to a specified amount after reviewing your finances. You’ll also have a better idea of the interest rate you’ll be charged on the loan at this point, because this is often based in part on your credit score, and you might even be able to lock in an interest rate. Some lenders charge an application fee for pre approval, which can amount to several hundred dollars.

You’ll receive a conditional commitment in writing for an exact loan amount, allowing you to look for a home at or below that price level. This obviously puts you at an advantage when you’re dealing with a seller, because you’re one step closer to getting an actual mortgage.

The other advantage of completing both steps—prequalification and preapproval—before you start to look for a home is that you’ll have a good idea in advance of how much you can afford. You won’t waste time looking at properties that are beyond your means. Getting preapproved for a mortgage also enables you to move quickly when you find the perfect place, and it lets the seller know that your offer is serious in a competitive market.

You’ll give your lender a copy of your purchase agreement and any other documentation necessary as part of the full underwriting process after you’ve chosen a home and made an offer. Your lender will hire a third-party certified or licensed contractor to do a home appraisal to make sure the house you want to buy is worth the amount you’re going to borrow.

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Owning or Renting Homes
29 / Nov / 2020
Owning or Renting Homes

Buy a flat or rent a flat? This is a question everyone ponders upon, as in certain cities people only stay for work purposes. It’s true that buying is always a second opinion for people as compared to renting. But, with Rentals there is a sure shot guarantee that there will be no return. On the other-hand there is Buying where there is a higher chance of you getting a good or a reasonable return! 

   The disadvantages of buying are pretty limited! The #1 constraint is the interest you will pay. Although, the current government is taking certain steps for reducing the rate of interest of the housing sector. Yet there isn’t such an impact for the people who are not in the super-rich category. 

  Looking on the brighter side. There is always the option of Purchasing. There are quite a few advantages of buying a house. Owning a house gives an individual the long-term benefits of security, equity and potential growth in personal wealth. The value of the real estate asset is bound to increase with a given period of time which gives you the luxury of enjoying profits if given a certain period of time. Also, this as well comes with its own risks.

Moreover, it depends on how you look at the matter. If you’re looking out for a short-term investment, then the best suggestion for you would be renting or If you’re looking out for a long-term investment then the option advisable to you would be Buying at any given day. 

  In a country like India where people prefer living with their family. Those people wouldn’t prefer moving around as much. As we all know moving is always a pain to carry out. In these cases, also people do prefer buying as it gives them a sense of security and stability.  

   So, coming back to the cons of buying a house.They would be that you would be bound to pay a certain amount every month no matter what the cost. Technically speaking that means a certain amount being blocked from your account before your pay-check even arrives. One last thing, maybe that. In certain cases, if the property is not well-evaluated before buying an individual ends up paying more as interest amounts as compared to the appreciation incurred by him. 

When it comes to living on rent versus living in one’s own home, people who advocate the former often argue that a rental home costs less, as compared to owning a home. Those who favour owning a house, cite the freedom that it offers. While owning a home is typically the dream of every Indian, sky-rocketing property prices in the recent past have led people to opt for renting, rather than buying, says Ajay Jain, executive director – investment banking and head real estate group, Centrum Capital Ltd.

“Landlords in most states also tend to restrict the number of years that a tenant can occupy their house, due to the weak protection provided by the law to the landlords. With lower interest rates and the government subsidy for first-time buyers of affordable homes, owning a home is now possible for many more people,” opines Amit Oberoi, national director, knowledge systems, Colliers International India.

Looking at all of these statements given by the big players in the market it is safe to say there are various pros and cons to both. The mindset and financial backing is a very important factor to be considered while dealing with decisions this intricate.

Owning a home is a financial commitment that requires you to plan ahead and reflect on where your life is headed. Before deciding whether to rent or buy, ask yourself what your budget is and if either choice would require you to stretch your finances. Write out your additional financial and savings goals to see how each choice might affect them. Make sure you still have enough money to save for retirement, for example. Compare some specifics to see which is a better fit.For years, the rule of thumb stated renting is cheaper than buying—so renting freed up money for other things, such as savings. However, that may not always be the case. Shifting real estate markets mean it may be cheaper to buy than rent in certain areas, though you likely need to pay more up front. The right option for you is the one that best fits your goals and finances.

Renting vs. buying a home is a big decision, and there are pros and cons to each option. In fact, a higher percentage of  U.S. households are renting than at any point since 1965, according to a Pew Research Center analysis of U.S. Census Bureau data released in 2016.

For some people, renting comes down to what they can afford at the moment.

“I was a long-term renter because I wanted to wait to buy until I could afford to stay in my current neighborhood,” says Atlanta resident Jennifer Walker, a public relations executive who bought her first home this spring. “I didn’t realize that there were affordable options.”

The reason why the US was taken as an example is because the real estate market similarities are quite while being compared with in a couple states in India as well. 

A few questions to ask yourself and commit to are as follows.. 

What can you afford?

How long do you plan to stay in the home?

Do you want stability or flexibility?

Can you afford to be responsible for home repairs/maintenance?

What are your financial, career and family goals?

The financial burden that an individual may go through may be unrealistic when his ends aren’t meeting this can be said by just putting the numbers together and making a simple calculation. There are different costs associated with renting and buying. Using Bankrate’s rent vs. buy calculator helps you break down some of these expenses.

Most rental properties require a security deposit, which protects the landlord against damage caused by the renter. You’ll usually put down the first and final month’s rent payments when you sign a lease. When evaluating a lease contract, ask if your monthly rent includes utilities, such as water, electric, gas, cable or internet.

For homebuyers, one of the biggest ongoing costs of homeownership is your monthly mortgage payment, which includes the loan’s principal and interest amounts. Your payments can go up or down over time if your loan is variable rate or your property taxes and homeowners insurance premiums change. If you put less than 20 percent down, your lender will typically require you to purchase private mortgage insurance, or PMI, which drives up your monthly payments, too.


 

27
Advantages of Investing in Pre-Launch Projects
29 / Nov / 2020
Advantages of Investing in Pre-Launch Projects

Lately, there have been a lot of builders that have started selling units of their Project before it’s fully even constructed. Is that a good thing? Would it be profitable for a Buyer to invest in Pre-Launch Projects? Well, we here at OSS have summarised that and put it down in the simple plain words where people can understand if it would be profitable for them, considering all the factors from his or her view point. We shall discuss a few factors that will better help you understand why it would be a good or bad decision to invest in a Pre-Launch project. 

But, what is a Pre-launch offer? Pre-launch is such a common term in real estate. You might have heard a lot about the various advantages of pre-launch from your friends, relatives, and realty experts. However, if you are wondering what exactly is a pre-launch, how it works, and how it benefits the builders as well as the buyers.! Pre-launch is ideally the time when a project’s approval processes are still in progress. At this phase, builders make an announcement about the project proposals and start the sale for the same. Buying a property in a pre-launch sale is beneficial to home buyers as it offers a good rebate on the overall costs. In other terms, when you invest in a pre-launch property, you will not see the actual property. You will see only the proposed layout and plan. In short, you will see the property you are buying grow from plot to a beautiful home.

These would be a few pointers from the Builders point of view that it wants to offer to its buyers

 

1.Pre-launch helps the builder to generate cash flow, whereas buyers can get a premium property at a minimised cost at this stage and also at under construction stage.

2.Such kinds of launches in the real estate sector prove advantageous to the buyers who look for price benefit over the years of possession.

3. Old customers, investors and real estate consultants can gain from this kind of offer as it reaches them the earliest.

4.Though it is said that this kind of investment is risky but if you can check the reputation of the builder and the needed approval documents then it will become much safer to invest.

5.Also the best of construction companies include a policy in the agreement that says, they would pay a compensation if they are not able to deliver the flat in time so that buyers need not suffer monetarily.

While these are not the only factors considered, we can say that these are a few key elements that can be considered while deciding whether or not to invest in a Pre-Launch project from the builders point of view. Now coming to the main talk of the hour.. who would benefit most out of investing in Pre-Launch projects? While anyone and everyone can purchase a property during pre-launch to enjoy the different benefits, it is investors and second home buyers who prefer to buy properties during pre-launch.

When you buy a property during pre-launch for investment purposes, it is quite beneficial. You get the property at a reduced price, and once the property is ready, you can sell them at the current market rate, which will definitely be higher than the value you brought the home for.

As pre-launch properties may take anywhere from 12-24 months to be delivered (and even more in some cases), it is advisable for people who have no immediate time constraint to invest in pre-launch properties. 

In case you have decided to go ahead with the decision of investing in the pre-launch idea of property dealing it’s a mandatory fact to consider a few factors before jumping into making the decision.. 

A project pre-launch is accompanied by lower than market value provided with builders offering discounts even up to 20-25%. Buying an Apartment in Bangalore in pre-launch from a reputed builder who has a strong performance history of conclusion of items, Ensures that your financial investment is safe & safe-guarded.

While the benefits attached to the purchase of property in pre-launch is quite rewarding, as a home buyer or investor, you need to be cautious when buying a property in pre-launch. If you are looking to purchase a pre-launch property for investment and resale purposes, then you need to make sure that all the documents are in place. It is important to trust the right Channelling Partners and builders. A thorough background check of both would go a long way! 

Another big pro to buying during a Pre-launch would be the value advantages, the choice to pick out your most popular unit is one more advantage. you’ll be able to build alternative supported factors just like the most popular orientation or proximity to bound project amenities. Once the pre-launch, all remaining units were opened to the market throughout the launch. Hence, your decisions become affected. By getting in pre-launch, you’re investing in an exceedingly property that’s still some of years aloof from relinquishing. there’s a differential quantity to be paid in several phases until the project relinquishes. The initial down-payment to book associate degree living accommodations or villa in pre-launch is simply nominal. This may give you ample time to prepare your finances. One when we talk about the ROI There is an enormous potential for appreciation of property costs if the purchased property lies in a locality that’s presently underdeveloped with a possibility for fast development. For investors searching for investments with giants coming back on investments, will give you multifold returns.

As an In investor this is a great opportunity to dip into the market and find out the benefits of the market of Real Estate. If the acquired property lies in an area that is presently underdeveloped with a capacity for fast development, there is a big capacity for gratitude of property rates. For financiers searching for financial investments with big ROI, can offer you multifold returns. A comprehensive research on the builders and developers behind the project can assist you make a smart option that reduces all threats. Developed and appreciated players in the real estate market normally take these threats into account and ensure the project goes through without missteps. Pre-booking of properties is the way to choose financiers who intend making multi fold gains from real estate financial investments.

Hope this helps you people better understand what are the reasons for investing in Pre-Launch property and a couple factors that are to be kept in mind to make an investment in this field. We here at OSS take all that into consideration and give help buyers find their dream at absolutely no charge at all! Go now and book an appointment with our Property Specialists. 

28
GST for real estate
29 / Nov / 2020
GST for real estate

Honestly, after the Government introduced GST into the system it's been something that everybody has to know about because with the introduction of GST everything changed. Certain products prices sky-rocketed and certain prices remained the same or maybe slightly reduced after tax that is. This system was introduced to standardize all tax applied for the Government’s revenue generation. Before the new financial year had begun the builders had an option of either settling for the higher tax rate with input credit or the flat rate that will be effective in the financial year 2019 also there were certain conditions that we shall discuss further. 

 So, going into details about the specifications of GST on projects that have received RERA before 31st March’19 have an option of either opting for the 12% rate with Input credit or going for 5% which was implied from the New Financial Year that would be 1st April’19. Although, all the projects that have come up or have got approved by RERA  after 1st April’19 have no other option but to give the benefit of the 5% GST that the Government has mandated. This rate is in case of properties that exceed 60Square meter of area.. These properties can also be called the luxury housing segment.

The one question that everybody has while dealing with projects that have started their construction before 31st March’19 is that: The input credit benefit that is basically 7% that is refunded to the builder for the reason being that when the builder purchases so many raw materials that is liable pay taxes for as well as on the final product. Hence, the government gives the liberty of subtracting all taxes paid by the builder through purchase of raw materials from the taxes on the finished goods he delivers. A little complicated yet simple.So, Coming to answer.. Are you entitled to get the refunds that the builder enjoys? No, the builder has the choice of either keeping it or returning it back. But, the builders because of this benefit reduce their prices while making the sale. Hence, it is safe to say that in one way or the other we do enjoy the benefit. 

 Now, coming to the Affordable housing segment.. Before,The new financial year started that is before 1st April’19 the tax rates on houses under 60Square meters was at 8%. As discussed before the rates will remain 8% for the projects that got their RERA Approval before the new financial year began. Now, the new rate that is applicable is a shocking 1% for houses whose carpet area does not exceed 60Square meters. There are many up and coming projects that offer you this benefit at this given time. There are many new projects coming up this year in Tier-A and Tier-B segments that offer these benefits with both 1% and 5% GST rates.

  There is another benefit that a buyer can benefit off is discussed below.. It is not entirely related to GST but anyways can be considered as a benefit in a way.

Now, there is something called the occupancy certificate which is something issued only after the completion of property. This certificate certifies that the property is in suitable condition to be occupied. Speaking legally.. It is not advisable to move-in without this certificate. The benefits this can give you is when you are dealing with properties that are ready-to-move. In case of purchase of a ready to move-in apartment with Occupancy Certificate are exempted from GST. In any case it is not such a simple task to calculate the taxes under the new regime. 

Also, if other builders do not give you the benefits of the new rates you are completely eligible to approach the National Anti-Profiteering Authority, which pursues cases of non-passage of GST benefits to the consumers.

   Summarizing all these factors the picture we get is that the consumers are in the upper hand in this economy which makes investing in real estate a very good decision. With these rates it is very much possible to make a reasonable profit if investments are done wisely.   

Let’s put down all the summarized factors in pointers for better understanding them. 

The new scheme is compulsory for projects commenced on or after 1-4-2019.

The revised scheme applies to residential apartments in Real Estate Project (REP) and Residential Real Estate Project (RREP) and commercial apartments in RREP which are covered under RERA [Real Estate (Regulation and Development) Act, 2016]. 

These rates apply where the supply of services involves transfer of land or undivided share of land and its charges are included in the amount charged to customers.

In respect of new projects, the tax (CGST, SGST/UTGST or IGST as applicable) shall be paid in cash by debiting the electronic cash ledger only [No Input Tax Credit allowed].

In respect of new projects, the tax (CGST, SGST/UTGST or IGST as applicable) shall be paid in cash by debiting the electronic cash ledger only [No Input Tax Credit allowed].

No GST is payable where the entire consideration has been received after issuance of the completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier

. All cement for the project must be purchased from a registered supplier only. If not so received, the promoter is required to pay GST @ 28% under reverse charge by the promoter (even if total value of supplies received from unregistered suppliers is less than 80%).

In case of capital goods procured from an unregistered person, the promoter is liable to pay GST at its respective rate under reverse charge.