• Whenever someone intends to invest in a residential property, they anticipate earning some profit in return. If you are considering purchasing a property and desire a significant appreciation in value, then it is wise to conduct thorough research prior to making an investment. It is essential to obtain a home insurance policy even if you plan to leave the house vacant for a considerable time after purchasing. You may choose HDFC ERGO property insurance to protect your home’s structure/content from any unexpected events. Now let us examine the guidelines you must adhere to before investing in a residential property.

Five Guidelines to Follow Before Investing in a Residential Property

1. Do Not Hurry! Take Your Time for Research
   It is recommended for homebuyers to explore and compare at least ten properties before their search becomes concrete. Avoid falling for bonuses that are unrelated to the property’s actual value. Stay away from unscrupulous brokers who are solely motivated by commission to persuade you to purchase an unsuitable property. Prior to investing in the property, assess its fundamental amenities, such as plumbing, construction quality, and safe electrical installations. It is prudent to consider the advantages and disadvantages before acquiring the property rather than realizing them after you occupy it.
   
2. Check RERA Registration
   Before visiting any property site, verify whether the developer has RERA registration or not. Also ensure that the developer has uploaded information regarding title, approvals, agreements, delivery timelines, payment schedules, finishes, etc. , on RERA. This will provide you with valuable insights into the project prior to your purchasing decision.
   
3. Construction Approval
   The buyer must carefully review the building plan/layout plan approved by the local municipal authorities. In addition, it is advisable to confirm the approvals granted by regulatory authorities for infrastructure amenities, water supply, sewage, electricity, environmental clearance, fire safety approval, etc. You may also request the developer to provide copies of NOCs issued by various departments, including the Pollution Board, Environment Department, Sewage Board, and Traffic and Coordination Department.
   
4. Location
   When purchasing property for investment purposes, location is crucial. The area where you intend to buy the home should yield a good return on your investment. It is advisable to buy a home near a prime location, close to economic zones, educational institutions, and recreational facilities, as this will ensure good appreciation of your property.
   
5. Check the total cost of investment
   The overall expense of the real estate investment may be significantly greater than you anticipate. This is because of extra fees such as GST, registration, stamp duty, brokerage, furnishing, borrowing expenses, and more. For instance, in the case of an under-construction property, you will be required to pay GST at 5 percent and 5-7 percent for registration and stamp duty, based on your state’s regulations. For furnishing the residence, you might need an additional 5 percent. Additionally, a bank generally finances 75 percent in a high-value loan or up to 90 percent in a low-value loan. The remaining down payment must be provided by the homebuyer. Consequently, in most situations, an investor in residential property should have 20-25 percent of the budget available as cash on hand.
   
   Conclusion
   
   Purchasing a home is certainly not a straightforward task. Homebuyers are advised to seek proper guidance from professionals and conduct thorough market research before investing their hard-earned money. Ensure to gather all required documents concerning the acquisition of the property. Additionally, confirm that all pertinent paperwork/official documents are updated with the new information. Due diligence is crucial when it comes to acquiring a residential property. Once you take possession of the property, it is recommended first to obtain home insurance to protect the structure of your property and defend it against floods, earthquakes, lightning, or any other unforeseen events.
   
   Disclaimer:
   The information provided above is for illustrative purposes only. For further details, please consult policy wordings and prospectus before finalizing the sales.