Updated: Apr 13, 2022, 10:05pm
A home could give one a sense of security, comfort and an accomplishment. But buying a home entails huge expenses and a long-term financial commitment. It is, hence, important to understand what works best for you — choosing to buy a home or rent one.
Buying a house, though is a big decision in life, has certain benefits.
Compare this with living on rent, which may initially sound perfect.
However, renting could give you the ease of residing closer to your workplace and offer you the flexibility in terms of changing locations as and what your profession demands.
Before investing your hard earned money in purchasing the property you should have a checklist in front of you which can help you to take the final call.
You should always purchase a property that fits your pocket. Do not overshoot as that may put you in financial stress. Also, you should thoroughly check the hidden or additional charges that the developer may ask for once you book the property.
The location of the property should be convenient to all the family members. Do a SWOT analysis of the location before taking the decision. Keep in mind that the locality should be well connected to the important city areas and there is a good public transport facility.
Appoint a lawyer who will do a due diligence of the property.
If the property titles are free of any hassles then there will be no complications going forward. Ask your lawyer to go through the builder-buyer agreement very carefully.
This is an important task before buying a house. You have to find out whether there is continuous availability of water or not. Whether the locality faces long hours of power cut during summer months. Poor air quality has become a major issue these days. Talk to the people in the locality about the air quality.
The area where you are buying your house should be safe for your family members. You need to be very careful about the safety aspect.
Before buying the property, take a tour of the locality to find out whether there are schools, colleges and hospitals nearby. Also check the shopping facilities in the area to meet your daily needs. Pay attention how far the property is from the nearest police station, fire station, parks and playgrounds.
This is a crucial thing that you need to take care of before you put your hard earned money in the property. Take help of a qualified structural engineer to judge the quality of construction. Do not ever go by the look of the structure.
Someday you might take the decision of selling your flat and move to a different location. Keeping that in mind, buy properties that are easily saleable. If you buy a flat from a reputed builder in a good locality then chances are that you will not face much trouble to sell your property and get good prices.
If you are purchasing a new property, ensure that it is RERA registered as it protects you against structural defects for the next five years.
The first time home buyers tend to make more mistakes than the experienced ones. There is a checklist that should be followed to avoid any mistakes:
The final rate of the property may go up if you opt for a home loan as you have to take into consideration expenses like processing fees, documentation charges, legal fees, valuation fees and others. In addition, you will have to pay the stamp duty and registration fees while purchasing the property. Some realtors also ask for yearly maintenance in advance. So, calculate every penny to arrive at the final cost of the property. This will help you to avoid any financial hiccups going ahead.
You have to be very meticulous to check your loan eligibility before you book your home of choice. For instance, you book a property and then go to the lender for a housing loan. The lender may refuse to give you the entire loan amount after assessing your income and repayment capacity. Therefore, it is always advisable to check your loan eligibility so that you do not drag yourself in a financial mess after booking your property.
Depending upon your financial health, lenders may offer you a loan which is higher than what you had anticipated to get. Always adhere to the basic rule of purchasing a house which is lower than your actual repayment capacity so that you can always enjoy a financial cushion. Do not overexpose yourself.
Realtors these days offer houses with additional amenities like gym, an auditorium, jogging track, clubs which you may not use regularly. But you have to pay more for all these amenities while purchasing your house and subsequently carry on the burden of higher maintenance charges. Work on what amenities you require and then book the property accordingly.
You may make a decision in a hurry in fear of losing out on a good home deal. It is important to visit a good number of projects in your preferred locality before zeroing in for the property of your choice. Be rest assured that you will always get an option that suits your pocket and fulfills all your requirements.
There is a tendency among home buyers to buy ready units in order to avoid the dual burden of paying rent and EMI simultaneously. Many a time, an under-construction property might offer better options in terms of location, amenities and price.
The only drawback is the window period. Carry out research on projects that will be completed within a year’s time or a little more. This may lead you to owning a better property at a lesser price.
Undoubtedly, renting gives you more flexibility to choose your place of living, but buying a home gives you a sense of satisfaction and accomplishment. Your home is an asset that you have created for yourself and your family. But you should decide on the right time to buy the home as buying a home is an important milestone and one should be prepared for it and save money to make the initial down payment.
One should also calculate his monthly budget properly so that the EMI does not become a burden to him. The home asset appreciates with time and the home is ultimately an investment worth making for the long-term.
Ravi Subramanian is the Managing Director and CEO of Shriram Housing Finance. He has more than two decades of experience in the banking and financial services sector across organizations such as HSBC, Citibank and ANZ Grindlays. Ravi holds a management degree from IIM-Bangalore.
Armaan is the India Lead Editor for Forbes Advisor. He has more than a decade’s experience working with media and publishing companies to help them build expert-led content and establish editorial teams. At Forbes Advisor, he is determined to help readers declutter complex financial jargons and do his bit for India’s financial literacy.
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