Investing in real estate requires prior knowledge about the sector and getting all the facts double-checked. It is one of those lifetime decisions that must be taken cautiously to minimize the risk.
The buyer must be well informed about the entire buying and transaction process. Buying property in India has always been easy, but with time, certain false ideas have cropped up.
For years, certain myths have been transferred for generations among the buyers’ section. Now that these myths have been able to transform into strong beliefs, they indirectly affect the buyer and the developer.
So, it’s time to debunk 5 commonly heard myths and bring forth the truth.
Myth 1: Renting is a better option than buying a flat/house
This is the most common myth that people fall for. You are entirely wrong if you think renting would be a better option than buying. Basically, it depends on your financial condition and requirement.
If we break down the rental plans, then that can go as high as 26% from the current price within a few years. The price will remain constant if you buy a property, even if it is on a home loan. Moreover, you get a place to settle down without the fear of shifting on demand.
However, if you are a frequent mover, then you better go for rentals. But if you plan to stay at a place for 10- 15 years, then purchasing a property would add to your asset. This is a wise financial choice to invest your money in a constructive manner.
Myth 2: Real estate agents don’t matter while buying a property
The buyer usually has a firm negative opinion about builders or real estate agents. They assume that the cost of the property increases because they add a commission with the cost. And, many even reported that they have to go through a lot of frustration due to dishonest agents.
But, in reality, try to join a customer-centric builder or real estate agent who has a reputation for building luxurious and affordable buildings. Then, you would definitely get a high-quality flat/house.
They have complete knowledge about the location and price, and you get multiple options to choose from. Moreover, they also provide post-sale service. So, you better trust a real estate agent rather than think about cutting nominal costs.
Myth 3: RERA covers all construction projects
The Real Estate (Regulation and Development) Act, 2016 or RERA was a significant relief to protect home-buyers. Moreover, it was a planned step to enhance the rate of investments in the real estate industry. This Act brought transparency to construction project information, and this was a solution for dispute redressal. Under the Act, a buyer can get complete details about the real estate project.
But, it is a myth that every project falls under the RERA Act. If the builder has registered with the authorities, only then does the project come under the RERA rules and regulations. So, before you dive into making an investment, do check whether the project has been registered based on the state regulations.
For every land more than 500 sq meters or having 8 apartments, it is necessary to register every commercial and residential real estate project. Thus, scrutinizing the facts is quite essential before buying property in India.
Myth 4: Under-construction homes are safe options before RERA
Before RERA came into existence, there were many defaults in real estate projects. And, when this fact came into existence, people turned their focus toward ready-to-move in homes. But, with the passing of the bill regarding RERA, builders took the initiative to complete the ongoing projects.
Thus, buyers thought investing in an under-construction building would be a suitable idea. It seemed to cost less than buying a ready-to-move home. However, here lies the myth, not every under-construction property is registered with RERA. Adding to that, there is almost nil in certain locations. So, do check before investing in under-construction projects.
Myth 5: Metro cities are the best choice for buying property in India
Potential buyers usually invest in real estate expecting high returns. Thus, they consider metro cities that include Tier I cities. But, these do not fetch high returns; rather, Tier II and Tier III have a high potential for growth and return.
The most exciting fact is that you get the property at a much lower price in Tier II and Tier III compared to real estate in Tier I. These tiers are still developing and have a lot of scope to escalate.
They occupy the micro-market around the outskirts of the city. Moreover, the government is also focusing on these cities and turning them into smart cities, making them a lucrative deal.
Are Subvention schemes the most suitable option for saving?
This is also one of those real estate myths. Buyers think that subvention plans can help to save a huge amount. Usually, 10% -30% has to be paid to the developer upfront, and the rest can be paid through the bank in the form of home loans. The buyer, banker and developer enter into a tripartite agreement.
If the project is under construction, then the developer has to pay the interest on the loan to the bank. The EMI that needs to be paid by the buyer would commence after possession of the property.
However, if the buyer seeks the schemes from the developers, then they get tied to the project for a long duration. Here the discounts are quite low whereas the down payment is quite high. The buyer has to pay the entire EMI as a loan, and when the actual EMI starts, only the principal amount reduces.
So, there is no reduction in the price in subvention plans, and these are just techniques to draw in buyers. Moreover, if the developer pays a late EMI, the buyer’s credit score is affected.
While buying a real estate property, you might come across many other myths and queries. Thus, it would be a wise decision to check the facts and avoid misconceptions instead of following them blindly.
You might have also heard that investing in interiors is a waste of money. However, an intelligently planned interior can bring in higher returns. Always decide based on the circumstances, the reputation of the developer and financial condition.
Moreover, there is no right time to invest in property. If you are ready to take a plunge, Srijan Realty is by your side with multiple property options at your preferred location and price.