Do’s and Don’ts of Real Estate Investments

1 I Colliers International

Analyse your �nances to make the correct assessment of the amount of money that you can a�ord to invest in real estate. Often this is ignored.

Get a pre-approved loan especially if you are looking to �nance part of the investment with a bank loan.

Understand the process and restrictions in case you are buying property from the sale proceed of another property

Overestimate the amount of money that you can set aside for investing in real estate.

Overestimate the rental income that can be generated from the real estate asset (more so if considering netting o� mortgage payments with rental income). Renting out a real estate asset may be time consuming and may not yield the anticipated income, as it is a function of the market which may change over time.

Thoroughly research the property location, market conditions, developer’s background in terms of quality of previous projects, ability to deliver on time and resale value of past developments. Compare shortlisted projects with similar properties in the neighbourhood.

If investing under construction residential property, it may be more prudent to invest in those projects that are in an early stage of construction. This is riskier than investing in ready property, but it may likely provide a higher capital appreciation.

Try to save money by not hiring professionals, as any mistake can cost a lot in the long term. Do hire professionals to get the best advice, however, check the credentials of your real estate advisors.

Avoid bank's criteria for approving property in case you are planning to take a home loan.

Check with the developer about the status of all approvals and licenses, development scheme, layout plans and construction schedule.

Calculate the total cost of the property by adding basic cost, brokerage fees, �nance charges and all statutory costs such as stamp duty and registration.

Select the payment plan from Down Payment, Flexi Payment, Construction Linked Plan and No EMI Plan, as to which is best suited to your �nancial plans and will yield the highest returns.

Buy a property without proper legal due diligence.

Focus heavily on �nancial costs; take other factors into consideration like locality, distance from major commercial and retail hubs etc.

Assessment of Financing Available for Investment 11

Due Diligence and Financial Analysis3

Identifying the Property2

Prior to signing the Builder - Buyer Agreement, check all of the following terms and conditions. Pay due heed to:

Make decisions based on emotional impulses while purchasing a property.

Trust everything that the advertisement or promotion brouchures state.

Buy a property without proper inspections / visits.

Check all amenities and features like doors, windows, paint, walls, drainage, leakage, switches, plug points and safety measures. Bring any de�ciencies to the attention of the developer and get the necessary repairs done.

Document Checklist

Completely rely on anybody. Check the area, amenities etc. promised and all documents yourself.

Forget to obtain a no objection certi�cate from bank, if the property is mortgage with the bank.

Purchasing the Asset4

Taking Possession5

Check for lock-in period with developer, if any, for sale of the property.

Carpet area and super area of the apartment;

Completion date;

Payment schedule;

Penalty clause in case of delay;In the event of non-completion of the project, understand the refund process and interest rate applicable.

Allotment letterBuilder - Buyer AgreementPayment ScheduleList of AmenitiesLayout plan of the propertyunderstand the refundCopy of the project’s drawingsReceipts for all of the paymentso Construction updatesPossession letterRegistration papersFlooring and bathroom �ttings Occupation Certi�cate

Diclamier: This document has been prepared by Colliers International for general information only. Colliers International does not guarantee warrant or represent that the information contained in this document is correct. Any interested party should undertake their own enquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damage arising directly or indirectly there-from.

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