5 Smart Tips That'll Make Your Property Buying Experience Breezy

The real estate market is unforgiving. Take a wrong step and it’ll show you no mercy besides tagging you as a rookie, or maybe somewhat of a living-breathing example of what NOT to do when investing for the first time. And let’s not mention the fear that’ll be instilled in you about never making another investment in property (on your own) ever again.

Now that’s a lot to live with, and honestly nobody wants the horrors of a bad investment to haunt them for life.

So, what do you do? Well, you can start-off by religiously following some of the tips given below.

1. Knowing Your Limits

This is one mistake novice investors make all the time. You go out looking for houses without considering your budget. And even if you do have a budget, you’ll probably misjudge the inclusions of carrying cost and mortgage payments. But that’s not all, you’ll also have to consider your spending habits which include your day-to-day expenses for utilities. Chalk out a plan by assessing how much you save monthly by deducting all the costs for utilities. When you’re done with that, fix a budget for the (property) purchase and calculate the amount you’ll to spend on the house upkeep and mortgage installments (if you’ve taken a loan).

You’re still not done though, because saving is essential. And that means watching how you spend money and what you spend it on.

2. Scour Every Nook And Corner

Remember to leave no stone unturned to find the right property, neighbourhood, and deal for yourself. Look, there’s a high probability that you’ll be hunting for property on your own, which means checking on the world wide web (mostly because the options are limitless and the process is convenient). And real estate websites like commonfloor.com make it easy for you with virtual tours, image galleries, and videos. So, make your checklist on real estate websites and visit every property because while you get most of the information online, it’s always better to confirm everything with a site visit.

3. Don’t Like What You See? Just Walk Away!

Purchasing a house is going to be a big step forward in your life. And when you take that step, you probably would’ve planned-out your future—a happily married life with your wife and children—in the house you fell in love with when you first laid your eyes on. Sounds like a fairytale doesn’t it? But wait, what if the house you love has high maintenance charges or comes at a price beyond your budget? Would you still go ahead and purchase it knowing that you’ll be facing a financial crisis that’ll jeopardise your ‘happily married life’ ?

No! You wouldn’t, and you never should go for a deal like that. So, when you do see a house next time, do the math, run the numbers. And when everything seems right, make the purchase. But if that’s not the case, just walk away!

4. Prioritising The Purpose Of A Purchase

You’ll have to know what’s the sole purpose behind purchasing the property, and for how long you intend to stay in it? The term will be decided by the mortgage that you’ve taken. So, if you’re the kind to move away in a span of say, 5 years, looking for alternatives will be a better option.

Selling your property because you couldn’t pay the mortgage is something you don’t want at any cost. Your assets are valuable, therefore it’s always best to prioritize the mortgage amount and the term before making an investment.

5. You’re Not The Only Boss

Just because you’re the one with the cash doesn’t give you the right to make rash investments. You’ll be needing all the help you can find. And that includes not just the financial experts, lawyers, and real estate agents, but also your friends, and family members. They’ll be giving you sound advice and suggestions, because you can get caught up in all the excitement of buying a property in india.

You have to be like a ninja—always wary of the things happening around you. You have to stay sharp and keep an eye out for developments in the market besides learning from the mistakes professionals (who excel in losing money on bad investments) make in real estate. It’s your hard earned money in question, and you wouldn’t want to squander it all away because of the silly mistakes you knew you could’ve avoided.

10 Common Mistake Renters Makes

When moving into a rented house, after signing the lease, you would be taking care of someone else’s property. However, there are some mistakes that most tenants do when living in a rented place. 

Declining the renter’s insurance

Usually the landlord would have insurance on the property that he lets out on rent. However, this doesn’t cover the property of the renter. You can call your insurance carrier and ask about coverages. This way any loss of property on a rented property doesn’t incur any personal financial loss. 

Don’t sign contract lease without reading it

The contract would have the details of the lease. Whether it is an apartment, flat or a house for rent in Bangalore, the details would include the start date, the length of the lease, and the amount of deposit and terms of the agreement. Ensure that the owner gives a copy of the same to you. 

Don’t pay rent beyond due date 

Some of the rental agreements would include a fine if the rent is due beyond a fixed date. It is therefore best to make all the payments before the last date. If the date is causing a problem, it is best to talk to your landlord and sort out the wrinkles in the contract. This way no late fees are incurred. 

Not reporting of problems in the property when they occur 

Most of the landlords are dependent on the tenant to inform them of the problems when it occurs with the property. The size of the problem does not matter. To cite an instance, if there is a problem with the plumbing, before it leads to bigger issues, it is best to inform and get it repaired. This way the owner saves money and it also keeps the tenant safe. 

Inviting more people to stay with you

Most property owners would clearly state whether you are allowed to invite other members to stay with you in the apartment. If it is a place like a paying guest in Bangalore or Mumbai, then it is understood that the place would have multiple people staying at the apartment. However, it is best to clarify all doubts before signing the lease with the landlord. Sometimes, you may want a roommate to share the rent costs, and then too clarify the same before moving in. You cannot sublet apartments, therefore, the best way to avoid hassles is to ask the property owner and be clear about all things before moving in. 

Failing to provide notice before moving

Most landlords would have their set of rules about moving out of an apartment mentioned in the lease. They usually ask for a month’s notice, however, if that is not feasible, the tenant may even have to pay a month’s rent. To avoid this, the best way is to clear all doubts with the property owner and if possible find another tenant who can replace you as soon as possible. The landlord does not incur any loss of rent making him happy.

Real estate will ever crash?

Indeed a Big Question
So many times I've come across people who say it is high time inflation in real estate and the market is going to crash. A basic understanding of real estate and finance would prevent many of these so-called "financial writers" from their fantasy headlines. Remember, these are writers--not real estate geniuses. They are people who make a low five-figure income putting words on paper. They love exciting doom and gloom headlines. 

They interview self-proclaimed experts from the stock market arena who know NOTHING about real estate. "Sell all your real estate and buy stocks from me." Real estate cannot be compared against other financial markets like you would compare a Yamaha against a Honda. 

Much of the value of the stock market and other financial markets is "good will." The only solid asset of some companies is the real estate they own. One good scandal, lawsuit, or moronic manager and that "non-real estate" value can go up in a puff of smoke.

Real estate: The foundation of wealth, currency, value

Real estate will NEVER EVER crash. It never has, it never will. It cannot happen. It is NOT possible. Yes, there are corrections.

A total crash in the general market will not happen. You will never see a Rs. 80 Lac house become a Rs. 20 Lac house. Not unless everything else is devalued, and then it makes no difference. If real estate were to sell for "pennies on the dollar" then the days of penny candy will be back, and you'll get change from a buck back from MacDonalds again.

You will never have a 1500 square foot house sell for Rs. 20 lac while a Toyota Innova sells for Rs. 20 Lac. All other value in this world is basically tied to real estate. If real estate plunged, so would everything else. But it is not going to happen.

If values began to plunge, money would rush in so quick your head would spin. Japan, Germany, or dozens of other capital markets would flow this way.

Local markets "correct" themselves

Even in local markets this is the still true. When Boeing shut down, the market was hurt bad. Someone literally put up a billboard saying "Will the last person leaving Seattle please turn out the lights?" Well, where is that market now? And what happened when local people moved out?

FIIs came in and bought up properties and made millions upon millions upon millions. Over last 10 years, I've seen some corrections around different parts of country, but nothing resembling a crash. I have books on my shelf about the coming real estate crash of year 80s, crash of the 90s, etc. It never happens. It never will.

Authors that write those books have no greater insight to the future of the world than the heaven's gate people or Jonestown groupies. But like those organizations, there are always nuts willing to listen to financial fanatics. The definition of fanatic is "zeal without knowledge".

Real estate doesn't crash. Not nationwide. Not without a general crash of everything. And believe me, the stock market, commodities etc. would have gone down the toilet long before. The same stock market writers predicting a real estate crash would be leaping from a ledge.

Now, I am talking the residential market and ONLY the residential market. Commercial real estate and other areas can have wider swings. Hotels can be overbuilt or shopping centers can be overbuilt.

But, it corrects. The plan and path for an investor should not be one of panic. There are things to do and not to do.

Here is what you should do . . .

1. Avoid or be extremely careful of areas that are highly dependent on one employer, industry or other factor. A large company shutting down or having big layoffs can drastically affect a local market. Well this point doesn't worry Bangalore real-estate because it has so many industries.

On the other hand, in the same area you can also have both stability and volatility. We had a steel plant shut down a few miles away from me and that local area was hurting. At the same time, I live near an extremely stable University that has to turn away students and the market is quite stable. So, in the same city or adjoining cities you can have both safe and risky areas.

2. Stick to bread and butter properties. The average property that any Tom, Dick and Harry would live in. Even villas or apartment complexes can have more volatility.

If you are following a buy and hold philosophy (which I do not advocate), than you need something very stable to hold on to-residential single family homes in the starter home range and just above. High priced homes can be volatile, too.

3. Be careful about "buy and hold." The plan of buy all the real estate you can and hold on for dear life has flaws. I heard one guru say "buy all the real estate you can and hold on by your fingernails if you need to." I know of many people who acquired the nicknames "nubby" or "stubby" throughout the years.

It is very high risk to be highly leveraged with no plan for a downside. The same guru also used to say "Negative cash flow is like bad breath; it's better than no breath at all."

Well, I've seen it squeeze the breath right out of many people leaving tragedies of everything from bankruptcy to divorce and even death and suicide. Even a small market correction in prices or rents and someone has to begin eating their portfolio and that rarely works.

4. Have some reserves. If the only way you have food for your family is if all the tenants pay, there's a problem. If a property flooding or needing a new roof means you can't make mortgage payments, you have a problem. If you clothe your kids from what tenants leave behind, you've got a cash flow problem and probably not the happiest kids.

This isn't just a joke. I've known people that were that tightly stretched and that even ate the food tenants left behind. Anyone following a strategy where there is little or no cash flow and no ability to handle problems or a market correction is gambling with their finances, future and even family. Again, a buy and hold strategy must be very carefully planned out.

5. Make your profit going in. No other strategy makes sense. You don't need to "buy and hold on for dear life." The greatest thing about real estate is that you can profit from an "inefficient" market. The fact that there can be profit from the moment you own the property is wonderful and quite unique to real estate.

When a stock broker shows you how to buy IBM stock at less than the price your neighbor is paying right now, this very moment, then pay attention to what he has to say. Until then, learn all you can about real estate. There are many, many strategies and techniques to make money when you buy the property.

When you are good at it, you can buy and resell quickly and make a large profit. When that happens, you have little concern for what happens to the market ten years, one year, or even one month from now.

It's about education. When a stock market analyst tells you that real estate is going to crash, he is only demonstrating his ignorance. When a real estate investor is worried about a crash or even a correction, that is also about lack of education.

6. Learn to forecast a market. That doesn't have to be all that hard or ultra-technical. You can watch your local market for factors such as "housing starts" and new and existing home sales.

Basically there are even some simpler predictors available from the Board of Realtors. I like the "average days on market" factor that is available in the sold information. That is the time between the listing of a property and the sale date. When that time begins to go up, a market is turning. If you want to apply a little calculus, you can even catch it sooner, but I won't get into that here.


But, back to the original message. Real Estate Will NEVER Crash--no matter how many headlines or talking heads say so.

Why Real Estate Investors Are Heading Towards North Bangalore

Bangalore has one of the most thriving real estate markets of the country. Although the entire city is bustling with residential and commercial projects, north Bangalore is the new destination for developers and buyers. Let’s find out why. 

If you live in Bangalore, you would know about the real estate market of the city. Ever since the establishment of IT sectors in Whitefield and Electronic City, there has been a huge surge in the demand for good residential and commercial properties in these areas. Over the past decade, the Sarjapur-Marathahalli region has gained prominence as the best location for office spaces in the city. Similarly, many commercial properties came up on the entire stretch of Outer Ring Road (ORR), as it is a Special Economic Zone and home to many IT companies. However, the scenario is changing now as north Bangalore is experiencing many infrastructural developments. This article talks about the prospects of north Bangalore as the new realty hotspot of the city. 

Saturation Point in Other Parts of Bangalore 

A major part of Bangalore’s real estate activity is concentrated in Electronic City and Whitefield. The government developed both these places. Karnataka Industrial Areas Development Board (KIADB) allotted lands for establishment of IT parks on ORR. Bangalore Development Authority was also responsible for developing ORR. Private developers and the state government have played a huge role in transforming these areas. 

Due to the development of commercial real estate, the demand for good residential projects went up in these areas. These localities have good infrastructure and lie in close proximity to commercial districts. Hence, property prices or rental rates are quite high here. According to CommonFloor.com, the average selling price of a property in Whitefield is Rs 5,183 per square feet. You can rent a 2 BHK house in this locality for Rs 21,109 per month. 

Infrastructural Developments in North Bangalore 

Since, all the prime localities in Bangalore have reached a saturation point in terms of real estate projects, the focus is now being shifted to north Bangalore. Government has come up with two mega projects to develop this part of the city. 

The first project is the prestigious Kempegowda International Airport. The airport is built on 4,700 acres of land. The project is expected to create approximately 40 million square feet of real estate space in the coming decade. It is the busiest airport in south India and the third largest in the country.

The second major infrastructural development will take place on 3,000 acres of land. This huge plot has been allotted for the establishment of three major industries; Aerospace Park, Hardware Park, and IT park. Electronic City is one-tenth of this upcoming industrial area. Imagine the number of jobs it will create and its positive effect on the real estate market. 

Good Sale Price Appreciation in North Bangalore 

Unlike Electronic City or Whitefield, north Bangalore witnessed a development in residential real estate, even before the commencement of IT parks. The area has a good number of schools, colleges, hospitals, and shopping complexes. 

According to CommonFloor.com, the average selling price of a property in Devanahalli is Rs 4,237 per square feet. If you think this is lesser than Whitefield, wait till you hear about the estimated sale price appreciation of a property in this area. The figure is a good 26.8 percent per year. This is way more that Whitefield where properties have an estimated sale price appreciation of -0.7 percent. This shows that north Bangalore is climbing the real estate ladder and will soon become one of the most popular commercial and residential locations of the city. 

Real estate experts have predicted a good future for north Bangalore as more and more investors and buyers are moving in this direction. If you are planning to invest in property in Bangalore, head north.