Luxury property is a dream home that one wants to cherish forever. As such one must be extra vigilant and selective when it comes to availing golden opportunity to purchase a luxury home. The rich investor class considers a variety of factors when investing, including location, connectivity, proximity to business centre, return on investment (ROI) potential, and regional development. Here is a rundown of four key factors to consider before investing in a luxury property, particularly if you want to add luxury property to your investment portfolio.
Let’s put it straight. Luxury property investment requires a huge sum and the HNIs do not lack this. However, while making a selection of that suave and high-end property, the rich class looks for a prime location and classy ambience. A filthy and underdeveloped locality will be a strict no no for the investors. The luxury property must be situated at a prime location with developed physical infrastructure including 24X7 power facility and a favourable business climate. Connectivity with business centres and airports would be advantageous in this regard. Moreover, as money is not a constraint, the research and ROI projections must make the basis of high-net-worth investments of this kind.
The ultra-rich class does not hesitate in spending money on a property having good potential. However, the ROI potential of a property is highly dependent on a bunch of factors and connectivity is one of the foremost factors. The luxury property owners belong to the affluent class of society and prefer to live in a prosperous and all-inclusive locale. Proper road connectivity, linkages with the airport and railway station and metro links are absolutely necessary for luxury property owners. In fact, the very high price tag of the property is directly related to its superb connectivity with leading landmarks of the city.
There is no doubt that luxury property comes with a heavy price tag. Even if the investor has money to spare, the purpose of investment in a luxury property must be clear. It must be well-defined that the property is being bought for self-occupation or for rental income. If it is bought for self-occupation, factors such as social infrastructure and amenities must be up to date as this will directly affect the quality of living of the residents. If the property is purchased for rental purposes, it must be near the business centres and connectivity must be seamless. If the purpose of purchase is clear, the investment journey would be hassle-free and one would be able reap the benefits as the only constant asset that consistently produces the highest ROI is real estate.
There is no denying the fact that luxury property investors do have deep pockets and they have a high budget at their disposal. Despite this, money cannot be wasted and must be invested prudently. Even if the investor has surplus money, he might want to avail of cheaper credit to buy a certain property. As banks are liberal with HNIs due to their sound financial position, they disburse loans almost instantly. The investor must have a plan to finance his prized possession.
In addition to the arrangement of finances, the investor can also ask for the right price. Just because he has money, doesn’t mean that he can buy at any price. In fact, by getting it at the right price , one may well save a few millions in luxury property deals. One must be aware of the price trends in the region and bargain accordingly.
Conclusively, luxury property investment is not a cakewalk and requires thorough research as a lot of money is at a stake. If luxury factors such as location, connectivity, ambience, physical infrastructure, and social amenities are researched well before making investment, it becomes easier to select a high ROI generating luxury property.
Atul Goel, MD, Goel Ganga Group
TORBIT CONSUMER CONNECT Q & A……. Vinod Behl
What should a home buyer keep in mind before making a home purchase decision in a RERA- certified project especially with regard to brochures and ads ?
– Sanjay Kapoor, Delhi
Though Real Estate Regulatory Act (RERA) has considerably helped mitigate the problems faced by home buyers with regard to safe investment through its regulatory framework, it is advisable to take necessary precautions to ensure that you do not get duped and your investment is safe.
The prospective home buyers should carefully look into project details and fully understand the terms of allotment and statutory approvals before making any purchase decision.
Many buyers are lured by the attractive images of the project. They must understand that the inclusions reflected in the project images may not be a part of the offer and are merely illustrative in nature. Mostly all the images, visuals, materials and information contained in a brochure/ad is purely creative/artistic and may not be an actual representation of the product and/or any amenities. Actual design may vary in the fit and finished form from the one displayed in brochure/ad. Therefore, prospective customers should not merely rely upon architectural impressions/accompanying images, plan, sales brochure ads, representations, claims. To be sure about all the project features/amenities etc, one should check project details on the developer’s website as well as on the RERA website. One should particularly deep dive into asterisks, conditions apply and disclaimers
The buyers must ensure that the property is sold on carpet area basis and there is complete transparency/clarity on the carpet area of the residential property on sale. One should also ensure the home price on the carpet area basis. It should also be kept in mind that rates mentioned are not all inclusive. These may not include GST and other statutory charges. So, buyers should get complete clarity on it. This will help them plan their finances better
While making a property purchase decision, project location and its connectivity assume great significance. Therefore, one should not purely rely on claims made in brochures/ads about the project’s connectivity with prominent areas and commuting time besides physical and social infrastructure developments in and around the project. Customers should check these on their own.
In order to mitigate the development risk, the customers should find out about the financial strength (including debt) and delivery track record of the developer. from the RERA website, media reports and the information available in the public domain.
Soon, some RERA authorities like Maharashtra RERA and Uttar Pradesh RERA will be introducing ratings of developers and their housing projects. based on several aspects including compliance reports keeping in view the interests of the home buyers. These will help home buyers make an informed and safe buying decision.