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7 Reasons for Buying a House Young

In the Indian real estate market, it is always debatable, whether or not we should buy a house early. While there are arguments on both the ends, there are strong and convincing reasons why one should invest in a home in the early years of life. The earning age and capability of individuals is completely different from that in the past. Millennials today have not only started earning at a younger age but the amounts being earned are also larger than before. There is more disposable income at hand with lesser responsibilities. The market is also more flexible with better loan rates, easy repaying options and multiple payment options. The below mentioned factors are in favour of people buying homes when they are young:

Compulsory savings

With so many avenues available to spend money today, savings do take a back seat sometimes. For the ones who have trouble saving, real estate can be the best form of investment. The repayment of loan taken to buy a house takes the form of compulsory saving and without even realising, there is an asset in the building. While home purchase is a liability, if we buy young, it becomes the largest valued asset in our kitty.

Ability to generate regular income

The first home we buy might not always be our dream home and we might not look at living in there immediately. The benefit of buying a home early, however, can be reaped through a regular rental income that can be generated from the property. We can enjoy being the landlord while earning a rental income that can actually be used towards repayment of our loan. The property appreciation continues to be a benefit.

Benefit of lower EMIs

The amount of EMIs is largely dependent on the tenure of the loan. As we understand that the longer the tenure, the lower would be the EMI. This makes it clear that the longer we postpone the decision of buying a home, the repayment term would become shorter and the amount of EMI would be higher.

Longer term value appreciation

When we buy a home early, we give more time to the property to appreciate. In a lot of cases, considering various factors, the appreciation of a property in the longer run could easily go in double figure. When we plan to take a loan for buying a property, there are also certain tax advantages that we earn which is another benefit.

Create your own décor

We all fathom a home of our choice. We often seek rental homes and push back the decision of buying a home since we do not want to part with our money. Rental homes do not give us the freedom to design our homes and live in our own creativity which is a big compromise. However, when we buy a home of our choice, we also have the freedom to do the décor that suits our choice and gives us peace of mind when we get back home.

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How to invest in the right property within budget

Selecting the best property is not easy and it is advisable to exercise caution. The job becomes even more complex when we have to play within a stipulated budget. The real estate market is always booming with myriad options like residential, commercial, villas, bungalows and land. A detailed research, however, can lead us to choose the desirable property within our budget. Some factors that must be kept in mind are:

Understanding own requirements

 Even before we buy a property, the important question is WHY. Digging deep into our why, helps us to sort and filter our choices to a great extent. The property could be a commercial or a residential one. We need to know the purpose of our purchase, whether we are buying it for our own utility, is it only for investment, are we expecting rental yield or are we looking at it as an estate management asset. Once we establish our why, we will be able to take decisions based on various factors. We can think on the lines of our needs related to the look of the building, the area, space, amenities, budget, location and much more.

Location that suits you

Location always plays a pivotal role in selecting the right property for ourselves. The location of a property determines its value to a great extent. A property in a developing area which is far away from the city will sell at a cheaper rate which obviously will look attractive to us. But a property like that will have its own challenges of lack of availability of essentials, lack of easy transport facilities, inadequate public infrastructure and so on. A property in an area like that, however, does offer peace of mind and calm. Properties located in the city area are likely to be expensive but they offer a desirable lifestyle where all essentials are in vicinity. Travel is a lot more easier and access to public infrastructure like schools, hospitals, supermarkets is simpler. If we prefer to enjoy all of this, we must look for a dwelling which is priced higher. So, we need to first know what our lifestyle requirements are and weigh them well.

Calculating our budget

After having clarity on why to buy a property in the first place, we must estimate the budget we have in mind. Real estate investments always are a bigger chunk of our kitty and we must be sure of various factors before we make the decision. We should be clear on our payment. In case we plan to take a loan for purchase of property, we must be aware of the loan rates, fees and other charges, any schemes and subsidies offered by the government and own capital adequacy. We must also factor in the other costs while purchasing the property like stamp duty, registration, broker’s fees and so on. These factors contribute towards raising the actual payment made by us over and above the value of the property. Proper budgeting in advance helps us to take the correct decision.

Market Understanding

There are various dynamic factors that rule the real estate factors. Interest rate is one of them. Interest rates keep changing and that can have a huge bearing on our purchase decision. Understanding and awareness of the same helps. We can wish to connect with market specialists and look forward to their guidance. Investing in an area that is still developing will be a reasonably cheaper deal. Also, if we invest in a project in its pre-launch phase, we stand to gain more. Investing at the right time in the right property is important in order to maximise our benefits.

Reputation of builder

While we always want to buy more for less, real estate purchase decisions have to made with caution. It would not be wise to undermine the reputation of the builder. A smart investor would never get lured by cheap rates and invest in a property which might offer compromises on basic hygiene factors. We must always choose to buy from a builder who is known to keep commitments, has a clear documentation work, offers space management and effective layouts and assures quality at each and every step. Whether we choose to buy a commercial or a residential property, some basic needs must never be compromised since real estate purchase is always a big decision and a wrong decision made here can have a huge impact.

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Importance of Location in Real Estate

Real estate might be your goose laying golden eggs for you month after month or your home sweet home, either way, location of the property is the key. Importance of location in real estate purchase must never be undermined. Location of a property translates into profitability for the investment. The fact is that when we decide to invest in a property, we are ready to put in a good amount of our savings or capital. So, it become essential that we make the right move.

Whether we buy a residential or a commercial property, there are some factors we must consider:

Connectivity

When we are the end users of the property we buy, we definitely look at transportation options. The building must be in close proximity to the major junctions. This removes major conveyance hurdles and ensures we commute easily. However, even when we buy a property with the idea of renting it, we must check what a tenant would look for. Accessibility and ease of transportation is the top need for everyone. A house or office that offers this facility will always be easy to rent, lease and even sell in future.

Amenities

We would always want to be in a place that allows us to live a comfortable life. The basic needs of grocery and medicines become a deciding factor when we buy a property. In fact, close proximity to amenities will typically improve a home’s value. With a fast-paced life that we all live, we want to live close to restaurants, grocery stores, dry cleaners, shopping and entertainment places. A house that is priced less might look attractive only till it’s visited, when we look at residing there, we will need to take care of fulfilling our daily needs.

Neighborhood

The appearance of the neighbourhood is also important. Large trees, quality landscaping, and nearby parks or community spaces tend to be desirable. You can also judge the popularity of the neighbourhood based on how long homes in that area stay on the market. Even in case of workplace, today, we all desire to work in buildings that offer us unobstructed views of nature. While buying properties in distant locations or underdeveloped areas, we might also overlook the factor of security.

Development

It is always a good idea to invest in those areas of the city that are upcoming because it is not just the present amenities that matter, but future ones as well. Plans for new schools, hospitals, public transportation, parks, sports centres, shopping malls and other civic infrastructure can greatly improve property values in the area. Commercial development can also improve property values. When you’re shopping for a home, try to find out whether any new public, commercial, or residential developments are planned and consider how these additions might affect the desirability of the surrounding areas.

Potential for Appreciation

We always look forward to appreciation on our property whether we buy it for utility, rent, lease or even for estate planning. The real estate market is not static and is characterised by ups and downs. It is, however, important to note that location of a property dictates the desire to buy it. This desire creates demand and in turn gives rise to the prices. Supply and demand are factors that will always play a crucial part in real estate pricing. Areas that are seen as undesirable now will likely be up-and-coming in the coming few years.

Real estate is the only solid and indestructible form of investment. It is also true that it takes away a major part of our capital, hence, making the right real estate decisions becomes imperative. We can change the way our house looks, we can change our office layout, we can make any changes to the interior and exterior of our property. But the one thing that we cannot change is the location of our property.