While a lot of people purchase residential property for end usage, there are many who buy an apartment from an investment point of view. The real estate sector in India is witnessing steady growth and the price of a property is expected to rise over the years, making it the right time for property investment. Here are some of the factors one must consider when investing in a residential property in Porur, a fast developing suburb of Chennai.
Location of the property
Most of us might have heard the age old punch line "location, location, location", which continues to be a significant factor in real estate investment. To invest in 3 BHK apartments in Porur, look for features like proximity to amenities, neighborhood status, peaceful conforming areas, etc.
In case the property is located in a developing or under-developed society, take a mid-to-long-term view about how the locality and how it might evolve in the coming years. For instance, a peaceful open land in the society may have to share the neighborhood with a noisy manufacturing unit, resulting in the downfall of property rates in future. Hence, it is recommended to thoroughly check the intended usage of neighboring areas and free land in the locality.
Valuation of the property
Prior to investing in the property, conduct a valuation of the property based on the following methodologies:
a) Sales comparison approach – It is important to compare the listing price of the property during the sale. Just make sure the properties you compare must be of similar characteristics, offering facilities alike.
b) Cost approach – This approach is suitable for newly constructed property and includes all cost summation minus depreciation.
c) Income approach – If the property is purchased with an idea to rent, then this approach must be followed. It can be calculated based on the expected cash inflow
Buying a property is a big investment and so you must be clear of the purpose of investing. Lack of clarity, on the other hand, may lead to unexpected results including financial distress.
Listed below are some categories that may suit your purpose:
a) Buy & Self-use – A lot of people invest in 3 BHK flats in Porur for self-utilization. Owing to this, the property rates may appreciate with time.
b) Buy & Lease – Putting your property on lease means regular rental income and long-term value appreciation.
c) Buy & Sell (short-term) - Buying under construction properties and selling once they are ready can get you quick and small to mediocre profit.
d) Buy & Sell (Long-term) – Buying and then selling the property after a long-term can get you large intrinsic value appreciation. It is a nice investment for long-term aims like child’s education, retirement planning, etc.
Be careful with leverage and know the pitfalls
Though home loans are a convenient financing option for purchasing 3 BHK flats in Porur, it comes at a big cost. To get the finances today, you commit your future income for a cost of interest spread across many years.
Consider your current and expected future earnings and paying capability before seeking the loan. Hunt around to get a better deal. Make sure you choose the type of mortgage loan that best fits your requirements and financial status. Don’t forget to read the terms and conditions and be aware of all miscellaneous charges levied by financiers. Ignoring the risks, on the other hand, can lead to major pitfalls.