Investing seems like an easy enough venture. Especially when it comes to real estate, people more often than not assume that they know enough to be successful. The delusion soon becomes an overwhelming reality when we step into the market and try to pinpoint plausible areas for investment.
There are many factors that contribute to a property’s value and knowing what these are can help someone become a smart investor. Knowing what makes luxury apartments in South Mumbai as valuable as they are can help you make better investment choices. A well-informed decision will need thorough research, patience and a lot of groundwork. Needless to say, you’ll have to visit properties after narrowing them down quite a few times before you can finalise anything.
So, let’s discuss some of the important things you should know before investing in real estate:
Table of Contents
Changing Reckoner Rates
The current real estate market is going through a lot of zig zags. With a changing market, it’s difficult to assess the situation and predict a plausible future. For example, the government has recently announced raising the ready reckoner rates of the Maharashtra region by almost 1.74%. When specifying, the inspector general of stamps and registration, Omprakash Deshmukh clarified the following:
- The increase in reckoner rates of Mumbai is only by 0.5%
- Navi Mumbai saw a rise of 0.99%
- Thane is to experience a surge of 0.44%
- Raigad has seen the most increase with a 3% rise in reckoner rates.
While this is sure to increase the stamp duty and developing costs for developers, it’s also going to cause transaction numbers to dwindle. Obviously, buyers will hesitate to invest in such a time, whereas, sellers would encourage more appreciation of their property value.
Having established this, it’s also important to remember that real estate is a long-term investment since it’s a very slow market. All developments in the real estate market are crucial and decisive, whether they favour buyers or sellers.
Location
Properties can have a substantial increase in their value because of their locality regardless of their construction and design. Where a property is located can be decisive in its demand and future appreciation. A good locality should comprise all the necessary amenities and facilities located close by. Similarly, being accessible via local transportation as well as through main roads are also important qualities everyone looks for in a property.
An investor should look at a property from the perspective of the tenant they plan on renting it to. All tenants are looking for a long-term home that can fulfil their needs and basic requirements. That’s why people want to be near malls, restaurants, retail hubs, commercial markets, etc. In addition to this, amenities like gyms and fitness centres, sports clubs, community centres, schools, hospitals, etc. only add to the appeal.
Property Structure
Once you’re convinced that a property’s location is ideal, now it’s time to get to the property’s structure and condition. You can’t be too careful when it comes to evaluating properties and looking for signs of possible damage. Contrary to common perception, property maintenance and repairs can cost a fortune.
Compared to your monthly ROI, having to frequently renovate, repair or maintain a property can prove devastating. This is why we recommend having professionals conduct a detailed property valuation of homes. You can also seek the help of real estate agents that you find trustworthy. With years of experience on their side, these experts can point out problems that you might overlook or consider insignificant.
Most of us aren’t familiar with construction materials and it’s impossible for us to judge the property’s durability. You can refer yourself to the title deeds, NOCs, OCs, or blueprints of the property. However, unless you have a professional who can guide you, the information will do you no good.
Future Developments
Investing is all about foreseeing a plausible future. You can’t rely on a property in a vacant landmass to appreciate in value unless you’re sure of developments in the surrounding area. Mumbai, fortunately, has a lot of developments in store for the upcoming decade. Metro lines, trans harbour links and even a new airport are some of the projects that are already underway.Even if you’re buying newly constructed 3bhk flats for sale, you should carefully assess anything that seems like it can become a problem later on.
These projects promise a profitable and prosperous future for the slums and empty land parcels in Mumbai. Even already demanded localities such as the BKC will witness a surge in prices when another metro station is functioning nearby. Similarly, once an area becomes more accessible, commercial, as well as residential markets, will erupt eventually. This will pave the way for more investment opportunities to come in the future.
In a nutshell, Real estate is a slow industry that requires an investor to familiarize themselves with the target city’s overall landscape. You can’t ignore any aspect of what makes the locality appealing or unattractive in the eyes of possible tenants. Only when you’ve done careful research can you make a well-informed decision.
