Real estate investments in India have always been considered a wise decision because of good returns. However, there remain some questions in mind, some of which are, how much money should be invested and what are the things to consider before investing? Let us see what the market experts have to say on this!
Buying an investment property in India, particularly in the metro cities is quite a challenge. However, the investment in properties is always rewarding and builds up your net worth. Besides, it is quite a safer option to invest in real estate as the prices of property keep on increasing every day. Cities like Mumbai, Delhi, Bangalore and Pune have emerged as the hottest real estate destinations, which ensure excellent returns on investments.
Importance of home loans
Gone are those days when you could buy a home without taking a penny from any other sources. The properties in India have become so costly that they only leave a single option to choose, the loans. Taking a loan from the financial institutions is easier these days as there are a number of banks, which are offering home loans at affordable interest rates. However, before initializing a home loan to buy a house, you can follow some of the suggestions, which have been shared by the realty experts from the leading property portals in India:
- If you want to buy houses as an investment and are planning to apply for a loan with that idea in the mind, make sure that you have financial solvency, good job, good payment history and your income is sufficient to cover your current expenses plus new property.
- You would require a higher down payment even if you take loans. In most of the case, it is 20% of the total amount. You can consult a financial analyst too, who can give you an idea about what type of loan you could qualify for!
- 100% financing is very difficult to obtain a property. In such case, your savings will be helpful.
Money to start investing in real estate:
All this means that to buy investment properties, you must have a capital. How much you need depends on what you want to buy and whether you qualify for a loan. Where did you get that money?
Savings: If you have plans to buy a new house in the near future, keep on saving a big sum of amount so that you do not have to get the deal slipped off your hands just because of shortage of finances.
Gifts: In India, it is common practice that the parents give away the money to their children, and in many cases, people are helped a lot by their siblings as well. This does not affect the approval of a loan.
Things to consider:
While buying a home or a property for investment, you must consider various things and then finalize the deal:
Location of the property: Ensure that the property you are buying is not located at remote locations; as this will never attract the buyers or tenants.
Distance from the central business district (CBD): The property should be within reachable distance from the offices, schools and the markets, and must ensure the following:
- Availability of local conveyance
- Easy accessibility from the nearest railway station, metro station or bus stand
- Availability of amenities and infrastructure in the surrounding neighborhood
- Electricity and water supply in the house
Smart investments in real estate can definitely bring a good return on investment (ROI). Renting the property after buying it will definitely increase your current income and cover the repayment costs of the loans.