Is it a good time to invest in real estate?

Property is not a manufacturing product which can be produced multiple times; it is only available in limited edition and therefore an individual investor needs to buy it at the earliest. Very often people make mistakes of waiting for the right time to buy a property but they end up perpetually forever and, in the end, are forced to compromise on location or price paying a premium for the same property as time goes on. The principle of real estate investment is ‘Earlier the better’ i.e. there is no right or wrong time to invest in property; it’s always a good time to start with. You are all set to make the biggest and most important investment of your life; that's why every step on the way to buying a house-whether for living or investing-must be taken with extreme care. Historically, the returns from real estate investments are positive and have surprised all investors. Even in the time of global slowdown and financial crisis, where most of the sectors were impacted, the real estate sector was stable and has performed well as compared with equity, gold, fixed deposits etc. The investment strategy for equity and gold market is to buy at low prices and sell at high; similarly, in fixed deposits, invest when the deposit rates are higher. But when it comes to real estate investment the rules are little different – ‘Buy it now’. Those who invest early, gets high returns and others lose the opportunity. Firstly, the cardinal rule of real estate must be kept in mind. One’s first investment should be towards one’s own home, may that be land for future development or apartment in the city/location where one wishes to finally settle down in. Investment into real estate for making superior gains and also income through possible rentals should follow his home. Not limiting to residential properties, one can also look at investing in office spaces early on in life; leasing it out in the interim and using it later for one’s own purpose is also a smart way to build asset ownership. In a few cases, owing to delays in delivery & other issues faced by investors, buying a property under construction must be handled very carefully, especially the documentation part wherein a careful evaluation of legal documents like title must be diligently done. Penalties for delayed deliveries must be clearly stated in the sale agreement amongst other critical checks. Buying ready properties come with the advantage of early rentals kicking in as well as home loans benefits for saving tax act. However, under-construction projects give the luxury of construction linked payments along with appreciation of value throughout the cycle of development. Whatever one does, the basics of evaluating the project must be in place. Any person looking at investing in residential real estate would like to invest in a safe and clean property which is highly likely if one invests in institutionally funded projects, like those financed by banks, PE funds & other financial institutions. Such institutions typically invest with developers having a stable track record and skin in the game with proven stability of developer is a safety net for the buyer in terms of on-time delivery, quality and adherence to contractual obligations.

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