5 Things to consider when investing in Real Estate

We understand the excitement of buying property more than anyone! Maybe this is your first house or you’re deciding to add another property to your growing investment portfolio. Either way, it is important to understand what you need to be aware of before you buy.

  1. LEGALITY

The developer that you are looking to invest with needs to be authorised for the ownership of land and the planning documents that it has submitted. This authorisation can be proved in the form of a No Objection Certificate, more commonly known as an NOC. 

As a customer, you retain every right to ask the real estate developers for the proof of NOCs and other approvals of the project. The NOC presented to you upon asking should state the area allotted to your project and the planning documents should highlight building codes, zoning regulations, and other relevant by-laws. Without a valid NOC, it is categorically illegal for the developed to develop, sell or promise possession in regards to the project. It is also recommended that you ask for tax receipts and other insurance statements. 

While this requires some time and research, it will give you a complete understanding of your desired location and any issue pertaining to it. The effort that you put in here will ensure that you avoid any frauds and scams. 

Receiving this information from the enterprise itself is not enough. You need to go the extra mile and cross check the documents from the relevant development authority. Best case scenario, your project is approved and has an NOC issued by the relevant authority. This is when you know that your investment is truly fruit bearing, as it will be complemented with credibility. 

  1. LEGACY

When looking to buy their designed and constructed project – you are essentially becoming their business partner. While land ownership and proof of authorization from the relevant government authorities, both majorly add to the credibility of an enterprise – it is vital that you only invest in projects that are backed by strong reputable names.

Do your own homework on the enterprise that you are planning to purchase from. Find out their reputation in the construction world and their past experiences with projects similar to the one that you are interested in. You should go visit their other projects to get a better idea of their development standards. If you can also find out lots of information from official websites. Everything from the location, society pictures, sponsor information and approval status should be available online.

What should you keep an eye out for? First and foremost, the developer should have the financial resources and experience to be able to deliver on their promises. A developer that has had international experience and clients, is always a good sign. If they have delivered well on these projects, their experience is sure to bring with it international by-laws, quality standards and work ethic.

  1. LOCATION

While prices fluctuate and renovations can change the condition of any home – you can not change the location of your property. You want great schools, easy commutes to work and local amenities such as grocery stores, restaurants and entertainment. When looking at a home, be sure to assess how close the home is to these important amenities. Unless you’re looking to buy a vacation home on an almost deserted island, close proximity to amenities will typically improve a home’s value.

Not only should you consider the accessibility, appearance and amenities in the neighbourhood or community, but also the plans for further development. Don’t buy based on the current status of the neighbourhood, buy where you can see a good future of the neighbourhood and area.  

  1. PRICES

Once you have been shown a property with a price demand, compare it with the other options you have. You could also ask a second agent for the price of the same option. Add the two quotes and divide it by two, this should give you an estimated market value for the property that you are interested in. 

While we admit that you have to investigate your options, it is not smart to go on contacting every agent that is suggested to you. Try upto three agents and look into the options and quotes that they have presented to you. Additionally, you can also make use of online resources to get an estimate of the prices. 

  1. TRANSPARENCY

We highly recommend that you be heavily involved with each step of the process of buying property. You should push for transparency with everyone that you deal with and visit in person wherever you can. Honesty, reputation and genuine promise need to be the deciding factors when looking for an agent. It is not wise to trust a real estate agency based solely on their fancy office and foriegn accent.

Once you have decided on the property and agent that you want to move ahead with, ask for a meeting to be arranged with the owner. Verify ownership of the property by cross-checking the transfer letter/with the NIC of the person you’re meeting. Steer clear of any agents that try to avoid setting up this meeting. 

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