The home-buying decision is one of the most important decisions of life and for most, it is a MILESTONE achievement. A home purchase is a capital-intensive investment and hence it is all the more important that we take a thoughtful decision rather than just taking an emotional plunge Having sold more than 10,000 apartments in my real estate career I have seen many facets of home-buying decisions going awry hence for the benefit of “ YOU “ HOME BUYER I pen down checkpoints before you make a final decision
1. NEED: Have you asked yourself this question: Why Do I Need To Buy A Home? Why can I not rent it? Financially renting is a better choice than buying because the return on the residential rental is just 3-4 % whereas the home loan is 8.6 %. I got various answers to this question:
a) I need to buy a home because it gives me self-confidence
b) I need to buy a home to make a saving from expenses that I would otherwise undertake
c) My family does not want to live in rented accommodation because of the insecurity of being asked to move out without notice
d) I want to “OWN” a Home e) I had a Dream Home in my mind – I want to fulfil my Dream. Etc. etc.
2. FINANCIALLY READY: Are you financially ready to make a home purchase? Have you considered all the financial obligations like a car loan, educational loan repayment, rent, and equipment loan (mobile, etc.)? Have you considered your financial obligations towards your parent’s health care, your wives/husband’s needs: professional and personal, children’s education, and incidentals?
If YES: what is the surplus month-on-month which you can invest in buying your dream home.” YOU GOT IT “ – You got the exact monthly surplus for investing in your HOME purchase (This point is valid for people who are going to take a home loan for buying property. Those who have funds at their disposal because of their savings or inheritance or from the support of parents etc. can ignore.) I am considering that your JOB or Business is secure.
3. LOCATION: One of the super important factors to be considered while making a home purchase. Mostly location close to work is considered as the deciding factor – it surely is but there are many other factors concerning deciding the location. Please ensure that the LOCATION you choose has an “ ESTABLISHED SOCIAL INFRASTRUCTURE: MARKETS, SCHOOLS, HOSPITAL, POLICE STATION, CINEMA etc). Do not buy a location, which is futuristic. YOU live Today not in the future some 5-10 years away.
4. SIZE OF HOME: APARTMENT (Accommodation v/s Size): This is a tricky one do you buy a 2-bedroom apartment in 900 sqr ft or 1100 sqr ft likewise 3 bedrooms in 1400 sqr ft or 1800 sqr ft. Are you buying accommodation or are you buying size?
A 200 sqr ft bigger size with the same accommodation @Rest 5000/sqr ft means an EXTRA payout of Rest 10 Lacs and a 400 sqr ft bigger size with the same accommodation @Rs 5000/ sqr ft means an EXTRA payout of Rs 20 Lacs. Be careful sometimes you buy size but the usable area does not increase in the same proportion. A saving of 10, 20 Lacs is a BIG saving and so be practical while choosing accommodation and size.
5. WHICH PROJECT TO CHOOSE? The first and foremost thing is to find out the consultants working on the project viz Architect, Landscape Consultants, MEP Consultants, Construction Contractors, Facility Management Consultants, and lastly the Financial Consultants.
Please remember that the consultants dealing with design and construction are the most important. Don’t just get lured with the green patches and things like table tennis, carom room, etc they hardly cost anything, the construction material and specifications are what you must consider seriously.
Choose Architects like Hafeez Contractor, CP Kukreja, and International Architects over Local ones. Choose L&T, Ahluwalia Contractors over Local Contractors. YOU WILL NOT GO WRONG IF YOU KEEP THESE FACTORS IN MIND. Dear Home Buyer, you worked hard to generate funds to be able to buy a home: use them judiciously. I hope my learning can be of use to all home buyers.