5 Things You Should Do Before You Decide to Buy a New Home

At least two projects must be held by an REIT, either directly or through Special Purpose Vehicles. Also, not more than 60 percent of the asset value must be invested in one project, according to the SEBI regulation, says an article published in The Economic Times in September 2014. Conventionally, people would invest in the real estate sector for long-term capital gains. But with the introduction of real estate mutual funds and Real Estate Investment Trusts (REITs), you can expect to make short-term gains as well. REITs are managed funds that invest in commercial properties. The rental income generated from such an investment is distributed as dividends and bonuses to the investors. It lets you invest without going through the hassle of finding the right property and doing all the paperwork. However, when you are buying a home of your own, you must be extra cautious about each and every aspect of the deal.

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Things to You Should Double Check Before Buying a House

You can either opt for real estate investment advisory services of an NBFC or buy a property yourself. Buying a house can be a lengthy procedure and you must be extra cautious, especially if you are a first time buyer. Here are a few things you must check before buying a house:

1.      Developer’s Profile – You must go through previously completed projects from the same developer. You must also check if the projects have been completed on time. Also check the foundation, construction and structural stability of the property.

2.      Necessary Approvals – Check whether the property has all the necessary approvals. The entire construction plan should have been cleared by the concerned authorities.

3.      Internal Work – You should get the wiring, plumbing and drainage checked before closing the deal. This is applicable both for new and used homes. Also look for ceiling or wall stains. These stains, if any, could be due to a leak. Get all such problems fixed before you close the deal.

4.      Location – It is a good idea to buy a house near public amenities, such as police stations, hospitals, public transport, schools, and more. Buying a house in a developing area will only help in significant capital appreciation in future.

5.      Budget – This is possibly the most important aspect. Your budget will help you shortlist potential properties. You can also take a home loan to finance your dream home. A bank may offer you a loan much higher than your pre-decided budget, However, you must not get lured and take a loan beyond your repayment ability.

Shop around, since this will broaden your choices and you will able to make an informed decision. You can also invest in this sector through real estate funds. These funds help diversify your portfolio and hedge risks