Let’s face it! Everyone would be clicking their fingers if real estate investment was that simple. Fortunately, many of the difficulties that investors face may be avoided with due investigation and appropriate preparation before signing a contract.
If you are one of the people looking to buy a home for investment purposes, then, To minimize losses while selling property, you must be aware of a few major pitfalls to avoid when investing in the real estate business. To avoid impulsive purchases, a buyer should look at a dozen houses before beginning a full search. Real estate demands a great deal of patience, and a lack of it can lead to reckless purchases.
Not Comparing the properties and prices
Before getting a new cell phone, we routinely compare numerous models and choose the one that best meets our needs.” The same is true for real estate, which needs more complete research spanning from the development, plan, location, catastrophe zone, the reason for selling, workplaces nearby, great learning experiences, driving concerns, and that’s just the tip of the iceberg. The customer should be aware of the purpose of the purchase. They should know if they are looking for a place to live or a place to rent before making a purchase. Real estate requires routine maintenance and renovations, which necessitate more funds from your wallet.
Not Choosing a well-known brand
It is recommended that you stick to well-known brands in order to reduce the danger of your purchase and avoid the after-sales service. The neighborhood, neighboring infrastructure, and all of the family’s demands should be met. Don’t buy from brands you’ve never heard of. Only buy from well-known brands. Don’t forget to look into the background of your builder. Many persons in the market have sold a single unit to many people.
Before purchasing any property, the actual cost reality sector must be calculated. Should cover GST, registration, stamp duty, brokerage, furnishing, borrowing costs, and so forth.
If you want to acquire a nice house, you must always conduct an extensive personal investigation at numerous levels.
Buying on a whim
If a buyer likes a house, they should not act too quickly, since this has ramifications. Consider the expenditures, paperwork, and your expected return from the property before making a decision. Do not ignore the same information by blindly believing someone, since this might lead to problems. Timing is crucial in life, and a real estate transaction is no exception.
Impulsive purchases can occur when a person’s resistance to sales pitches is poor, or when the buyer is enticed by gifts that have little to do with the property. A big commission is a primary motivation for any unscrupulous dealer to sell an improper property.
Not checking the Credit Rating
When you apply for a home loan, lenders will look into your credit history. If you have an issue with your credit history, your application may be denied or you may be provided loans at a higher interest rate.
Lenders give the greatest loan rates if your credit score is 750 or above. If your CIBIL score is greater than 700, you may acquire a Rs 2 crore house loan at roughly 6.7 percent APR, which can rise to 7.5 percent if your CIBIL score is less than 600. If your credit score is excellent, you would save around Rs 24 lakh.
The real cost of the property
Before purchasing any property, the true cost should be calculated. GST, registration, stamp duty, brokerage, furnishing, financing cost, and so forth should all be considered. This might raise your costs by 25-35 percent. There are other charges that may vary depending on where you live and the location of the project.
The buyer of an under-construction home must pay GST at 5%, registration fees at 5% to 7%, and stamp duty at 5% to 7%, depending on state regulations. If you are purchasing a property costing Rs 1 crore, estimate the furniture cost to be roughly Rs 7 lakh or 7% of the purchase price. So the true cost of Rs 1 crore is Rs 1.25-1.3 crore. Aside from that, lenders are prepared to fund 75% of high-value loans and up to 90% of low-value loans. So, if you assume that your Rs 10-20 lakh are sufficient, do not succumb to it. You would be responsible for the extra cost of Rs 30-50.
Although, Making errors is human nature, and while we cannot totally eliminate them, we can learn from them. Remembering a few basic guidelines will help you avoid making one of the greatest blunders of your life with your real estate investment.