A guide to creating wealth with Residential Real Estate Investment

How does an investor make the most of a property investment? We get the experts’ views on the factors and the regions that residential home buyers should consider

For any investment in residential property to provide effective returns, the chosen location should have good social infrastructure, adequate public transport and sufficient economic activity to sustain development and growth. These parameters apply to investments in non-agricultural land approved for residential development, as well as flats in residential projects.

However, to mitigate risks, one should stick to tier-1 and select tier-2 cities only. It is also prudent to invest in properties, where the prices range between Rs 2,500 and Rs 5,000 per sq ft, as this will provide protection against capital value erosion. Simply put, this is a safe price segment and almost guarantees capital appreciation.

Guidelines, to make the most of your property investment:

• Understand the property cycle, to identify the best entry point.
• Leasehold titles issued by the government must be fathomed.
• The investor needs to have a clear comprehension of unearned increase or capital gain and quantum of stamp duty that needs to be paid.
• Check the quality of the development because poor design and construction are common when the markets are depressed.
• The project’s development plans and all statutory approvals, should be in place. If the approvals are not yet in place, the investor should monitor them closely during the investment cycle.
• Check the credibility and track record of the developer and his arrangement for finance to complete the project, as even reputed developers have failed to deliver under the current market conditions.
• Enlist a reputed legal firm to carry out the due diligence on the property’s title. One can no longer rely solely on the due diligence of home loan firms, as they have targets just like developers.
• Understand the implications of the size and dimensions of the plot/apartment. Small plots or apartments may cost less but they may be difficult to sell.
• The location of the project may be important but so is the location of the plot or the apartment within the complex. Investors should avoid buying flats on the top floors of high-rise buildings, as the floor-rise charges will add to the cost.
• The price of the development, should be lower than the last peak (in 2008). However, exceptions can be made for quality, delivery date and location.
• The time frame for getting possession of the property and conveyance of land, must be explicitly clear. The penalties in case of delays, must be well understood.
• The investor must know the difference between soft launch, launch and current price of the developer. The resale price in completed projects, may be actually cheaper.
• The investor must understand all the clauses in the sale agreement along with the transfer charges that may applicable, in case he wishes to sell the apartment during its construction. He should also establish whether the agreement value includes the cost of all amenities, parking, etc., or whether these are to be paid separately.
• The investor should compare the project with others, based on its carpet area rate.

If all the above precautions have been taken, the property should ideally appreciate at a consistent rate of 15% per annum for three years. It is important to remember that one can almost never sell at the peak, just as it is impossible to always catch the lowest price.

​Best cities for residential property investment

• North India: National Capital Region, Lucknow, Chandigarh, Jaipur and Dehradun.
• East India: Bhubaneswar, Kolkata, Guwahati and Ranchi.
• West India: Ahmedabad, Mumbai, Pune, Nashik and Nagpur.
• South India: Hyderabad, Bengaluru, Chennai, Coimbatore and Vijaywada.

These cities offer the potential for higher capital value appreciation, depending on the demand and supply dynamics of their micro markets, the quality of the development, the reputation of the developer, location of the project and its timely completion.

Also read: Investment Tips: How To Buy A Home That Delivers Long-term ROI

TO KNOW MORE ABOUT THANE REAL ESTATE PROJECTS BLOG - A GUIDE TO CREATING WEALTH WITH RESIDENTIAL REAL ESTATE INVESTMENT, VISIT CREDAI MCHI THANE UNIT

Co-living spaces versus hostels and PG accommodations: What should students choose?

Co-living spaces and student housing have emerged as viable alternatives for those looking for rental spaces in metro cities. We look at the factors that students should be aware of, before choosing such accommodations

With the growing migrant population across the country, the idea of shared living is finding many takers. Such accommodations are particularly useful for students, who head to cities to start their college life. While, earlier, hostels and paying guest accommodations were the available options, modern concepts for students include co-living spaces or student housing.

Concept of co-living spaces

“The concept of co-living involves having a common kitchen, a utility space and a lounge area, along with a common study zone that the students can use. This is apart from the private bedroom and bathroom that each resident has. It is a modern form of housing, wherein students stay in a common apartment or building, while sharing common facilities. Similar to how serviced apartments evolved, owing to the need for greater flexibility and freedom as compared to hotels, co-living has taken shape, owing to the need for a cost-effective, flexible and hassle-free lifestyle, as compared to traditional rental accommodations,” explains Divya Seth Maggu, senior associate director, valuation and advisory services at Colliers International India.

​Benefits of co-living spaces, over hostels and PGs

The main benefit of a co-living space, is that one need not compromise on comfort, when living away from home. The facilities available, such as utilities and maintenance, are at par with what is available in one’s house. Although co-living may not be as cost-effective as a hostel, it does offer more benefits over the latter, at a slightly higher cost. Experts point out that hostels and PGs are mainly about lodging and boarding, while co-living provides an elevated lifestyle, with opportunities to interact and cohabit without the overbearing scrutiny and rules.

“Co-living spaces offer flexible lease periods that can range from short-term to long-term. Several co-living spaces also hold events like yoga, festival nights, movies, sports tournaments, etc., which takes care of the leisure activities within the complex. Also, hostels and PGs may have conditions, in terms of visitors, deadlines for returning home, etc., which can hinder flexible working hours,” adds Abhishek Kulkarni, chairman and managing director of Million Sqft Realty Pvt Ltd.

How does a co-living setup operate?

Companies in the co-living segment lease properties on a long-term basis from building owners, for a period of three to seven years. They revamp the interiors, to suit the requirements of students before renting it out. They also hire housekeeping staff and security guards, for property management and are overall responsible for providing the facilities. Students then sign the agreements with the co-living operators. Kulkarni explains: “The agreement includes details pertaining to the rental amount, the period of the lease and verified personal details of the person on rent. The responsibilities of the co-living operators include maintenance, cleaning, collecting rent, etc., thereby, eliminating the multiple levels of operations that exist in renting out a residential property.”

Before signing the agreement for a co-living space

It is important to establish one’s budget in advance, to ascertain the budget that you can pay every month, before starting the search. The next step is to align your requirements from the co-living space, with the budget. Finally, students should look for properties that meet their expectations, as well as budget.

Things to keep in mind, when opting for a co-living space

• Check the time frame of the agreement and the duration of your education.
• Verify the facilities and utilities available and the distance of the co-living space from the place of education.
• Explore various rental options, to ensure that the co-living space is at par with industry rates and not overpriced.
• Check on the privacy available, as a co-living space should offer a conducive environment for studying.
• Check the security in the place.

Also read: Dos and don’ts for relocating a house

TO KNOW MORE ABOUT PROPERTIES IN THANE BLOG - CO-LIVING SPACES VERSUS HOSTELS AND PG ACCOMMODATIONS: WHAT SHOULD STUDENTS CHOOSE?, VISITCREDAI MCHI THANE UNIT