4 things to check while investing in luxury real estate
Are you an NRI planning to invest in luxury property market in India? Hold on for a while. Make sure you conduct a comprehensive research before finalising an investment in a luxury or ultra-luxury real estate project.
Whether you are a non-resident Indian (NRI), high net worth individual (HNI), ultra-HNI or a Person of Indian Origin (PIO), there are certain things which every investor should be aware of before investing in the luxury real estate market in India.
Here is a short guide to get you started.
What is a luxury project?
The definition of luxury and premium projects are often misinterpreted in India. A luxury project situated in South Indian cities may not be considered as a luxury project in Mumbai or Delhi.
Developers opt to develop luxury/ultra-luxury projects mainly because of the high margins offered by such projects. Many high-end project developers are of the opinion that luxury projects are those with high price-tags that come with a few additional features including great amenities and interiors. Factors such as a high price range, a walk-through video, an expensive brochure, etc are the important points that serve their purpose. And the prime target for such projects and developers is foreign investors such as HNIs and NRIs.
Very few developers still believe that delivering a luxury project is a prestigious way to reach professional excellency in their entire lifetime. A handful of such developers can be found in Bangalore, who make every effort to deliver high quality projects.
What are the factors that buyers should check?
Before choosing a project to invest, buyers have to verify the developer’s background. Besides verifying project credentials including location, density, design, layout, features, amenities, specifications, compliance to vastu, etc., developer’s credentials should also be carefully checked. Looking at the developer’s track record based on the past projects would be helpful.
Buyers should also check which are the banks that have approved the project as well as the positive and negative aspects of the project’s growth potential.
What is the price being quoted by the developer? And is the price worth?
Another important aspect to look at is the price range at which the project is being offered. One should check why the property is being quoted at a higher price compared with other surrounding projects. There may be many other projects which satisfy all these aspects and offering almost all the facilities as the one you have considered, but at a lower price. Knowing this will give you a better knowledge about the project’s legitimacy and it also helps in negotiating for a better price. Enquiring a couple of property agents would be of good help in this regard.
Since property market in India is price-sensitive, buying the project at a right price would reduce future complications too. If you shed extra money to buy a project, at a later stage, when it comes to selling or leasing out the property, it may become difficult to sell it for right profit.
Are there any hidden costs?
Often buyers get impatient while dealing with other charges apart from the actual cost of the luxury unit. It is advisable to carefully analyse what are the charges being quoted for other transactions such as maintenance, parking, clubhouse, etc. In some cases, the other costs are so high, that one can rather buy another budget apartment for that amount.
Buyers should not get carried away with the fancy design and layout of the project or by the way the developers present their units. Do not miss to take a cautious approach and make all relevant checks before finalising your deal.
4 things to check while investing in luxury real estate
