How investing today in Real Estate can give you great returns

Mark Twain once remarked, “Buy land, they’re not making it anymore.” In today’s scenario, this statement stands apt for real estate investors. There are several stories of apartments/properties from the 1950s which were bought for a few thousand rupees being sold in crores today. That is why, investment in real estate holds a prime importance in contemporary times as well.

Is real estate the best investment option compared to gold or equity shares or the evergreen fixed deposits? Let’s first define what is “real estate investment”?

 Real estate investment involves the buying, managing, renting and/or sale of real estate for profit. Improvement of property as part of an investment strategy is generally thought of to be a sub-specialty of investing called real estate development. Real estate is an asset form with limited liquidity and is considered to be highly cash flow dependent. 

  It’s a boom time for investors to invest in real estate because of the recent repo rate reduction (25% basis points) by The Reserve Bank of India. If you have been wondering how a repo rate cut effects you, it is a fair question indeed. It is the rate at which banks borrow from the central bank, the RBI, to meet their short-term (day-to-day) liquidity requirements.

 With the reduction, home loan rates are bound to fall and of course, the banks are happy. “It’s good time roll for home loan borrowers. Axis Bank taking the lead and cutting rates is a marked deviation from the past, when other leading banks such as HDFC Bank, SBI and ICICI Bank have been first movers. The sharp cut in deposit rates by Axis Bank in the past week, has helped the bank cut its lending rates faster.” – quotes The Business Line. 

 Mr Kaushal Jain, Director, Arihant Group talks about how Repo Rate Cut is going to benefit the buyer as well as the real estate industry as a whole. According to him, buyers can save around Rs 10,000 on a loan amount of Rs 50 Lakh. Sounds good? Watch the video below.

Conclusion

  Naturally, a fall in the interest rate prompts one to save less and spend more. Due to low interest rates, home loans will rise and this benefits consequently the real estate market. It is not advisable to keep saving your money in the bank when interest rates are low. This is because earnings on your FDs will be negligible at a time when economic activity is high as banks do not want to take the risk of raising funds at a high cost at a time when borrowing rates are falling.

  Residential real estate is one asset whose prices has risen in most markets of the country. Though analysts have predicted that the residential property market in locations such as the Delhi-NCR is ripe for a price correction, developers have been able to hold on to prices while buyers await a fall. Given the demand-supply imbalance, the trend is likely to continue and your investment will in all possibility stand good for you while other assets stand low. So, let your investments roll.

  What are your thoughts on investing in real estate market and Repo Rate reduction? Share with us.

New Real Estate Bill & Its Benefits to Home Buyers

 The Real Estate (Regulation & Development) Bill, 2016 has been approved by the Lok Sabha on 15^th of March 2016. The Bill elaborates on safeguarding consumer interest, efficient transactions related to property, enhanced responsibilities of the developers and lucidity in communications. The Bill is aspired to support both developers and consumers in order to understand the norms of property purchase and execute according to the agreement.

 Given below are the reasons why Real Estate Bill was required and its benefits to home buyers.

Why Real Estate Bill Is Required?

• Lack of trust amongst the investors and consumers
• Non-transparency in communication and less information about the project
• Intrusion of fly-by-night operators who end up wasting one’s life savings
• Fund diversions that lead to time and cost overruns
• Consumers are exploited due to one sided agreement
• Huge amount of black money being involved 
• Disagreement resolutions take imprecise delay in civil courts
• Unplanned developments due to nonattendance of regulator leads

Prime Features of the Bill:

• Applicable to commercial and residential real estate above 500 square meters and 8 apartments respectively
• Organizations for Regulatory Authority and Appellate Tribunal in States/UTs
• Assigning of Adjudication Authorities by Authority in order to sort disputes
• Mandatory registration of real estate projects and real estate agents with the      Authority if they wish to sell plot, building and apartment
• Developers are to deposit 70% of collections in separate accounts
• Provision for insurance of land title
• Consumers and developers are to pay same interest rate for any delays

Benefits to the Developers:

• To remove all the fly-by-night operators and make it easy for the genuine developers
• The Bill will inculcate reliability by enhancing the sector on basis of securities, banking, telecom, insurance, etc.
• Once the regulator comes into place, the long pending demand of industry/sector status can be granted. This will enable lower cost of funding for developers from various financial institutions.

  

Benefits to the Consumers:

• More transparent operations giving the buyers a detailed information on their choice of project
• Reduce unfair trade practices by disclosing the ‘carpet area’ for every project
• Remove one sided agreement by introducing Model Agreement
• Overruns of time and cost due to fund diversion would be restricted
• There would be proper price control by eliminating black money and speculations
• Eradication of indefinite delays in dispute resolution through civil courts
• The Bill offers preventive and curative measures, and powers to enforce specific performance

  With the passing of the new Real Estate Bill, it would now be difficult for promoters and builders to delay their projects. It also endows with setting up of a Real Estate Regulatory Authorities (RERAs). This shall guarantee timely execution of projects. The RERAs will standardize transactions related to both commercial and residential projects. Therefore, the Bill will protect every home buyer’s interest, establish efficiency in every property-related transaction and also boost transparency, while attracting more investments to the sector.

 What are your thoughts on the New Real Estate Bill? Share with us in the comment section below.

How To Check The Construction Quality Of Your Dream Home

If you are thinking about to buy your Home in Delhi NCR checking the development nature of a loft is an imperative variable before settling the purchasing choice. While it is a specialized angle, there are approaches to guarantee that the development of your planned flat is sound and secure. Field visits to the venture web page, conversing with intermediaries, online research and counseling a modeler are a routes' percentage to protect against any auxiliary deformities in an undertaking.

What to search for to discover development quality:-

Here are a few signs and escape clauses that can assist forthcoming with homing purchasers judge the general nature of development of a private undertaking:-

Exterior Of Building’s:- At the season of field visit, it is essential to watch any breaks in the building as it is an indication of a powerless establishment. Indeed, even minor breaks in dividers reflect upon the sub-par nature of materials utilized for development.

Solid blend:- Developers check the solid's quality blend as the level of concrete and solid sand proportion are vital for nature of development. A purchaser or proprietor can check this by driving a nail into the dividers. The nature of cement is not up to the imprint if this action is finished effortlessly.

Paint quality and finishing:- Purchasers must pay special mind to the nature of paint on the dividers. Notwithstanding upgrading visual advance, great paint on the dividers and wooden surfaces draws out their life. Modest paint, then again, brings about poor completing and decreases sturdiness. This likewise implies that dividers may should be painted again rapidly.

Fittings and installations:- Kitchen and restroom apparatuses, for example, taps and shower ought to be in great working condition. Alongside this, the lavatory's floor must be even. Tiles utilized as a part of the restroom and kitchen are a decent pointer of the general nature of development. Entryways ought not make a squeaking clamor while opening. Purchasers should likewise watch out for entryway handles, electrical fittings and window locks.

Common areas and facilities:- The assembling's normal ranges can likewise help imminent purchasers judge the designer's weight on development quality. Lifts, for instance, by presumed makers will have an upkeep contract and along these lines checked intermittently by the concerned offices administration organization. On the other side, lifts of new brands ought to raise suspicion among purchasers.