SENSEX NIFTY

ask the expert

Investing in Property

Questions Answered (23)

with a budget of 45lacs - where to buy in navi mumbai to get good appre.

Aditya Verma

CEO & Business- Head
Makaan.com

You can look at any of these locations - Panvel, Taloja and Ulwe.

I want to invest in good location in Mohali with good returns in long term. Can you please suggest the properties?

Aditya Verma

CEO & Business- Head
Makaan.com

Sorry as a company policy, we don’t comment on any builder/developer.

Which is a better investment in Mumbai projects - 2 BHK in Vasant Oasis Phase 3 borosil plot, andheri marol or mayfair hill crest POwai Extn Vikhroli

Aditya Verma

CEO & Business- Head
Makaan.com

Sorry as a company policy, we don’t comment on any builder/developer. However, for investment purpose, Powai is good and gave appreciation of around 30-38%

Dear Sir, Please suggest some decent projects build by Reputed builder with excellent plan/construction quality in Pune. I am currently working in Hinjewadi. Carpet area around 1500-1800 sq ft. would be an ideal match. My budget lies between 50-70 L. Interested in Big Society, Villas or Row houses with good amenities and security. Under construction/ about to start project will also suffice my requirement

Aditya Verma

CEO & Business- Head
Makaan.com

Sorry as a company policy, we don’t comment on any builder/developer. You can look at Hinjewadi, the price appreciated by 18% last year according to our “Top 50 investment report”

looking to start a business in Nagpur city for which i need min 500sqrft shop/showroom space please suggest the area where to purchase or take on lease

Aditya Verma

CEO & Business- Head
Makaan.com

No Comments

Dear Sir, i am planning to buy one flat (2bhk)at IYYAPANTHANAGAL , PORUR, CHENNAI, for invesment pourpose. project name: colour country. Builders name : colorhomes developers. need your advice for the same.

Aditya Verma

CEO & Business- Head
Makaan.com

Sorry as a company policy, we don’t comment on any builder/developer. However, Porur is a good area to invest.

Must we invest in apartments or in plots for higher appreciation in bangalore ?

Aditya Verma

CEO & Business- Head
Makaan.com

It is completely your choice whether you want to move into apartment or construct a house. However, for better appreciation, you can look at following localities which comes under Top 50 investment options in India , a research conducted by Makaan.com. These localities appreciated from 10-30% last year, which is mentioned below and expected to give good returns in future

more (16)

Property rates in India

Rates powered by:

Note
  • Excessive supply in a city or area means less demand

    Most cities have pockets with excessive supply, as well as pockets wherein supply is severely constrained. Despite concern about economic...

  • The metros are still the best places to invest in real estate

    Property prices in many of the metros have skyrocketed. Investors observe these trends, analyse the magnitude and scope of activity,...

  • Major Indian developers are abandoning the MIG sector and concentrating on high-end residential projects because it makes better business sense.

    Most big-banner developers still see sense in constructing mid-income housing projects, since they can construct more volumes. The demand in...

  • There is a 'bubble' in the Indian real estate market, and it will burst soon

    It is certainly true that many units in cities are not proving to be slow movers because of the current...

Tools

Naushad Panjwani

Sr. Executive Director , Knight Frank India

(31 Jul- 16:00hrs)

Property Investment

Which Act regulates the acquisition of immovable property by a foreigner in India?

Land Acquisition Act

Foreign Exchange Regulation Act (FERA)

The real estate (regulator and development) bill

Transfer of Property Act

SUBMIT

CLASSROOM

What are REITs?

According to Naushad Panjwani, senior ED, Knight Frank India, real-estate investment trust along with real-estate mutual funds are a very popular form of investments abroad.

Feb 04 2014,17:57

FAQs

Q.
Which are the instruments that attract the payment of Stamp Duty?

The instruments like Agreement to Sell, Conveyance Deed, Exchange of property, Gift Deed, Partition Deed, Power of Attorney, settlement and Deed and Transfer of lease attract Stamp Duty on market value of the property.

Q.
What are the possible returns of investing in commercial versus residential property on rent?

The rental yield for commercial property is usually 9-12%. In contrast, the yield for residential property is much lower at 3-4%.

Q.
What are the tax implications of sale of any house property, commercial or residential?

For the purpose of Real Estate the Long-term Capital gain would be only if you hold the property for more than three years, then it is subjected to tax @20%. In case you sell the property in less than three years time then it would become short-term Capital Gain and the same is required to be taxed at the prevailing tax schedule of the rate applicable to the assessee depending on his other incomes.

Q.
What is meant by the market value of the property and is Stamp Duty payable on the market value of the property or on consideration as stated in the agreement?

Market value of property is the price at which there is a willing buyer and a seller agreeing to the transfer the property at an arm's length transaction. Stamp duty is levied on the ready reckoner rate or the agreement price, whichever is higher.

Q.
What are the risks associated in buying a flat on Power Of Attorney (POA) basis?

Purchasing a flat on a POA basis is not permitted.

Q.
What are the factors to keep in mind while investing in residential property for capital appreciation?

The fundamental aims of any residential property investment should be to maximise yield as well as capital gains and to reduce the risk as far as possible. To illustrate, renovating and embellishing a property makes it eligible for a higher rent, which means maximised yield. Property investment aimed at capital gains involves buying real estate cheap and selling it at a higher rate, thereby maximising one's ROI. An astute investor will also buy a well-located property at a high price if the rental market is booming, since this makes it possible to rent it out for as long as it takes price to rise again.

Q.
What are all the important documents one should check before buying any property?

While purchasing a property, you have to look at the approved layout plan, approved building plan, ownership documents, carryout title search, etc.

Q.
Does availing of a teaser loan make sense?

Availing of a temporarily discounted home loan without taking a protracted view of one's financial position is not advisable. One should be aware of the manner in which one's finances will be affected after the teaser period is over and real-time lending rates kick in.

Q.
Is a POA revocable?

Yes, a POA can be either revocable or irrevocable, depending on what sort of a POA one has made.

Q.
In whose name are the stamps required to be purchased?

The stamps are required to be purchased in the name of any one of the executors to the Instrument.

Q.
What is the difference between built up area, super built up area, and carpet area?

Carpet Area: Carpet Area of a property is defined as the net usable area from the inner sides of one wall to another. Carpet Area comprises of the carpet area of the demised premise, toilet areas within the demised premises, AHU room/s within the demised premises and dedicated service areas for the demised premises. Built-up Area (BUA): BUA consists of carpet area, area covered by inner and outer walls and additional areas mandated by the authority such as flower beds, dry balcony etc. Super Built-up Area (SBUA): SBUA consists of BUA and the proportionate area under the common spaces of a building like lobby, staircases and elevators.

Q.
Who is liable to pay Stamp Duty-the buyer or the seller?

The buyer is liable to pay the stamp duty.

Q.
Does it make sense to buy a home now?

That depends on one's actual objectives and level of need. If one is a first-time home buyer, attempting to time the market makes little sense. Any correction will be a brief phenomenon, and prices inevitably rise again. This is a risky game that only investors should play.

Q.
What exactly do we mean by a Free Hold flat? What are the advantages and disadvantages, if any?

A freehold property flat is one where there is a whole and sole owner/s, ownership is full and unconditional and there is no lessor / lessee involved.

Q.
What are the risks involved in residential property investment?

The risk factor in real estate investment lies in the possibility of buying at a higher price and having to sell at a lower one in a depressed market. It is also risky to try time the market to discern the 'best' time to invest. Much like in the stock market, it is impossible to predict the point of lowest ebb in the real estate market. The danger in delaying investment too long is two-fold - firstly, one may lose out on the best properties, and secondly, the market may pick up ahead of one's predictions, meaning that the lower rates may no longer be available.

Q.
Is there any way by which I can claim exemption from tax on capital gain?

Several options are available for saving capital gains. For example, in the first place invest in a residential house property or a flat to make investment so as to see that capital gains are exempted. Likewise, if a person were to make the investment in REC or NHAI bonds then also he enjoys complete exemption from the long-term capital gain payable by him in respect of capital gains due.

Q.
What are the different ways of investing in commercial property?

There are three ways to invest in commercial real estate - directly buy office space from a developer, buy shares of a commercial developer from the stock market, or invest in a real estate fund focused on commercial real estate. As the quantum of investment is usually huge, the prospective buyer needs to take more informed decisions.

Glossary

Abatement notice

A notice served on the owner(s) or occupier(s) of a property from which a private nuisance arises, warning them of the intention to enter on the land in order to abate the nuisance.

Absolute title

The right of ownership of a mortgage deed, which gives the right, in certain specified circumstances, to demand repayment in full, of the outstanding debt than the due date. Or a clause in a deed or contract, which provides for the early termination of an exciting interest in land, in certain specified circumstances, thereby advancing the future interest.

Agreement for lease/sale

A contract to enter into a lease (or sale), which in order to be enforceable either must be evidenced in writing and signed by the person against whom action is taken for the breach of the alleged contract and there must be a sufficient act of part performance.

Alternative user value

The value of land and buildings which reflects a prospective use which is different from that of the current use.

Anchor tenant

One or more department or variety chainstores, or supermarkets, introduced into a shopping centre in key positions to attract the shopping public into the centre for the purpose of encouraging other retailers to lease shops en route. The larger the developments the more anchors required.

Asset valuation

In the property market this expression is applied to the valuation of land and buildings or plant and machinery. The term is often used to describe an expert opinion of the worth of a property which may be incorporated into company accounts, where the ownership of the asset is not necessarily to be transferred but the valuation is required for the company takeovers, share flotation or mortgages.

Assignment

The transfer of a property interest, especially a lease, from one party to another.

Atrium

An entrance hall of a building, often rising through a number of storeys and containing lifts, reception areas and plants. Originally the hall or chief apartment of a Roman house.

Top losers

Smriti Irani

62892.31 -2.89%

Nihalchand

546.62 -2.42%

Vishnu Deo Sai

517.33 -2.06%

Explore Moneycontrol

Copyright © e-Eighteen.com Ltd. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of moneycontrol.com is prohibited.

  • Excessive supply in a city or area means less demand

    Most cities have pockets with excessive supply, as well as pockets wherein supply is severely constrained. Despite concern about economic growth and high inflation, areas with excessive supply will continue to see demand, and therefore price appreciation. As long as an area is seeing infrastructure development, it remains a safe investment bet.

  • The metros are still the best places to invest in real estate

    Property prices in many of the metros have skyrocketed. Investors observe these trends, analyse the magnitude and scope of activity, and identify one or the other new town as the next coming thing. A fundamental real estate investment mantra is that emerging localities are preferable to established and often saturated ones. Established areas eventually reach a peak in terms of appreciation potential, after which the growth rate either slows down or stagnates. Moreover, there is little scope for new market drivers such as malls to find a place in saturated localities – meanwhile, prices remain high. This is not the best of scenarios from an investment point of view, since optimal investment requires low entry levels and appreciable growth within a realistic timeframe. Therefore, as one or the other destination reaches its peak potential on all these counts, new ones come into the limelight.

  • Major Indian developers are abandoning the MIG sector and concentrating on high-end residential projects because it makes better business sense.

    Most big-banner developers still see sense in constructing mid-income housing projects, since they can construct more volumes. The demand in terms of units is phenomenal and developers getting into this segment can build for years to come. They have the assurance of sure-shot absorption, as well. Most major Indian developers are ‘not’ shifting from affordable to high-end housing -- only branching out. While they get into middle-segment housing, they continue to build high-end projects.

  • There is a 'bubble' in the Indian real estate market, and it will burst soon

    It is certainly true that many units in cities are not proving to be slow movers because of the current price points, and developers do need to re-calibrate their bottomlines while still remaining viable as businesses. Since the only way to catalyse healthier sales at this point is offering buyers tangible financial relief, a reduction in rates will work best. In fact, new projects are already being launched at lower rates and good deals are available at the negotiation table for serious buyers. In other words, we are not looking at a bubble that is likely to burst, but at a gradual and perceptible relaxation on hard pricing norms.