When buying a property, several aspects must be addressed because it is typically one of the most significant investments will make in their life. Of course, price is an important issue, but there are other considerations to consider as well. Buying a home requires a multi-layered strategy that considers factors such as an individual’s income, ability to pay EMIs (equal monthly installments), city and location, and whether the purchase is for personal use or rental purposes among others.
Given the current economic situation, we’ve attempted to answer some of the queries that prospective buyers might have.
Is it preferable to wait for a price reduction?
Prices have stayed essentially unchanged over the last few years, with minor price corrections during the covid. Experts feel that a further significant price drop is unlikely. We’ve seen a 5-10% price drop post-covid, and we’re not sure if there’s much potential for additional adjustment.
The correction may not be widespread (reputable builders with a ready-to-move-in property are not offering significant reductions), and buyers will need to shop around for a better deal,” he added. He said that you should negotiate hard with developers to get a better deal.
To buy a property, how much should I extend my budget?
You may not be in a financial bind right now, but you should be confident of your financial security in the future before buying a property. It’s critical to determine how safe your employment or business is, as well as the potential economic impact of covid-19 on your sector or organization.
Even if you are sure that you want to buy a property, you must be cautious about the amount of leverage you utilize. Over-leveraging might put you in a bind in the event of a job loss.
Should I buy a property that is still under construction or one that is ready to move in?
This is one of the most common issues that homeowners have to deal with. Under-construction houses are cheaper since developers typically offer flexible payment plans linked to building stages or subvention plans, where you may reserve a home for as little as 10%-20% of the purchase price and pay the balance when you take possession.
These projects are appealing, but they come with a significant level of risk in terms of whether the home will be completed on time or not. According to a report, around half of unsold inventory is in high danger of being executed. This danger has been heightened because of the covid-19 epidemic.
Should I buy or continue to rent?
This is a continual topic of discussion. When you buy a property, a large portion of your savings is locked up in an asset that is not liquid. If you continue to rent, you will have more cash on hand and will be able to invest the remainder.
Simple math is required depending on different criteria such as the rent paid, the EMI, etc. Keep in mind that the outcome may vary depending on the property’s location and increases in rental or property prices. In this decision, the factor also involves that either you have a transferable job or not? If there is a chance of moving to other cities, then the rented property is best for living.
Is it a good time to buy real estate?
With many areas seeing price corrections, it’s likely that the rental yield, which is equal to the rent divided by the property’s value, has increased, making property investments more appealing. Experts feel that residential real estate rental returns are just too low to justify investing.
It is essential not to make a quick decision when buying property. Before making a choice, consider all factors.