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Build vs Buy

| News | November 23, 2010

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Real estate market in India and especially in Andhra Pradesh has grown substantially. It is good that you are looking to invest in an emerging industry.

In recent times there has been a few conflicting interests on whether to buy or build a house. Buying and building of a house have two completely different aspects and involves different procedures. It can add more confusion, if you are a first time buyer.

If you have some prior exposure into the construction/building process, know where to get the supplies and source of labor. There have been misconceptions that constructing yourself adds additional costs, but that is not true if you plan everything upfront. There is no intermediary in between and you procure the material directly, your overall costs are substantially lower than buying a house. Based on the studies conducted in the past, the savings could be between 20% – 30 %. You can influence in the design and construction to your needs and choices. It allows for more flexibility and you get to choose thing as per your tasters at every stage of the building process. You have the command in choosing the material of utmost quality. There is no one to doubt about the quality of the material used in construction. You will have a mental attachment to your home because of your involvement in each and every stage of the process. You naturally feel proud of your dream home.

On the other hand, taking the responsibility to build on your own comes at certain price.You must have interest as it requires your attention at every stage. You should have time in your hand to deal with the issues as they surface. Sometimes it can be overwhelming, depending upon the issues that you may face. , if you are building your home, communication with your architect, engineer or contractor will be critical for the success of the project. You should prepare a list of questions to be asked. There will be many delays in procuring the materials, or you have some disputes with the contractor regarding labor. Weather certainly an important factor. You must take all persuasions before hand so you plan and schedule your work accordingly. In India, especially, the processes are not so automated, so when it rains, you shouldn’t run around what to do when it rains.

If you are open and don’t have specific restrictions in the design/layout of the house, it can be simpler and less complicated. All you have to do, study the neighborhood, physically go and see the houses. You can negotiate the terms of rent or the price of the house depending on the area and location of the house. Most of the appliances and fixtures are included on the price and are not added as additional charges. , Finally choose one among them.

When it comes to an existing home, typically your agent will be helping you to determine a fair market price and will try to set something that will be fair to you and the seller. However, quality is something that many consider a fixed and unchangeable element. At times, both sides usually do not understand what the quality or condition of the home is.

The biggest advantage of buying an existing home is that you an move as soon as you can. Because of urban development and lake of time in peoples hand, more people now a days are preferring existing apartments and independent houses. Families where both husband and wife are working, don’t have time or knowledge to take up the building on their own.

While buying an existing house is simple, it comes with certain drawbacks. The house may need renovations because it may not be as per your requirements when you  purchased it. At times, the house needs some maintenance and see issues with maintenance or the infrastructure, you feel that you have not made the right decision. Some houses are old and may not have hooks to upgrade with modern facilities. Houses built a few years back will be less energy efficient.

Whether you build or buy, you can still approach for loan with banks such as ICICI, State Bank of India, HSBC. Your agent will help you out with this.

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Where to look for help if you are interested in real estate investing?

| How to Guides | November 23, 2010

first time homebuyer

Real estate investment is fast becoming very popular since it is an easy way to make good money. But, you need to invest your money intelligently and be prudent especially if you are a novice in this field because even a small mistake can result in a big loss.

Good investments in the real estate sector are grand prospects of amassing wealth and getting success. But let us not get carried away. The whole business of real estate is not all that simple as it sounds and there are lot of things that need to be considered and efforts that need to be put. Before turning an investor, get all the facts clear. There are people who want to invest in the real estate sector but don’t know where and how to begin and where they can get proper guidance from. Let us exchange certain vital information regarding real estate investments. First and foremost, you need to have a clear idea regarding the various aspects of real estate investing and how you plan to embark upon the whole business venture. Then you should have a clear cut idea of your investment capacity, the objectives and the various factors that can result in good investment. One way of gaining good knowledge about this field is by reading various books that deal with this subject that are authored by the experts in this field. Generally, these books prove to be a great help in imparting information and training. Of course, nothing can be compared to practical training and hands on experience and the how much you can learn from it. Remember, books alone cannot give you all the required knowledge and training. But, no doubt, they can help refine your skills. Another recommendation is to do extensive market research, especially if you are totally new to this field. Starting off in any business will almost never be a smooth ride. In real estate business, you might not have adequate information or you may not invest well. So, to avoid all these outcomes, garner as much information regarding the real estate sector as possible. Learn about the property income values, rents and occupancy rates.

All this information will always help you in the future. Information can always be sort in newspapers, local appraiser, and assessor of tax, local firms and real estate experts. It is always wise to gain certain amount of work experience working with qualified professionals in the field because all he exposure will help you understand and get familiarized to small nuances of the field and you can utilize this knowledge in your own venture. You could enrol for courses on real estate investments that will teach you how to and where to invest and how to gauge the chances of good investments. Nowadays, online courses are fast becoming very popular among all those who want to gain knowledge about real estate investing. Any course, irrespective of being online or not will most ideally conduct examinations. If you decide to opt for enrolling for real investment course, make sure that you pick it after giving it much thought, just like when you would invest. Update yourself about the syllabus and the method of teaching and if they could help you in any way at all. After the course, you must feel confident and knowledgeable enough to embark upon the real estate investment venture. Various universities and institutions conduct such courses. It is up to you pick the right one. There are certain things that you should give a thought to while comparing and choosing the courses.

An ideal real estate training course should impart knowledge about how to select and purchase properties that will produce decent income, give you a good understanding of the real estate sector, and teach you negotiating skills in order to seal profitable deals. Also, you should learn how the various entry strategies, property values and how to make profit in this business. The current economic recession has greatly affected the growth of the real estate sector. So, the most important thing now is to invest smartly and wisely.

Investing in buy-to-rent and long term ventures should result in good growth rate. In the past few years, countries like Bulgaria, Dubai and Romania have become hot spots to invest in buying property. Poland, Czech Republic and Slovak are fast gaining increasing popularity as real estate hot spots showing great potential. Morocco is another economically self sufficient place, whereas Spain has lost out to these countries coming very low on the list. India is also fast improving in this field and is being looked at as a place of great potential.

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What are the steps to get a housing loan?

| How to Guides | November 23, 2010

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Loans have become very essential these days and everyone requires to borrow loans for requirements like purchasing or building a house or to buy a car or to pay off some pending debt. Today, applying and getting loans is no big deal, but your requirements and the situation matter a lot.

There are certain mandatory steps to receive loans.

  • The first major step is to decide upon a loan and what it is that you want it for. If you are a home owner, there is a particular type of loan that is available known as the secured loan. Further, there are two options to choose from; one taking the loan on remortgage basis by which you can pay of the equity for the house or opt for the lowest loan rate. You can even apply for a personal loan that does not require any kind of remortgaging. There are provisions for opting for personal loans based on bad credit history.
  • The next step is to decide on the amount that you require a loan of and the time that you will require to pay it back. The second part of the question is often difficult to determine. You can always resort to guidance and advice on these matters from certain banking professionals or experts. Make use of free loan calculator that is available on various websites so that you have an idea of how much to pay and estimate how long you might take to repay the loan.
  • Next step involves getting free loan quote. For starters, you do not have to pay for the quote, nor are there any sorts of obligations attached to the quote.
  • The paper work that is involved will take a few days. It is very important that you read all the terms mentioned on the papers and that includes the fine print. Read it thoroughly so that you do not miss out on any of its clauses and that you understand them. In case of doubts discuss the matters with someone who has knowledge related to the banking field. Once you get the loan quote, do not delay filling up of forms and finish all the required paperwork. Do not let a few doubts and set backs unnerve you. There will be several agents that the banks can assign to help you out.
  • After all the paper work and loan quotes are handled; all you need to do next is sit back and wait for the loan to get approved. This time varies depending on the lender. It generally takes about 3 to 7 days to review the loan application and get it approved. There will be instances when your loan may not get approved. The faster you deal with the paper work, the faster you will get the loan approved. Once all of the above mentioned tasks are undertaken, the final say goes to the lender who will make the ultimate decision.

Mentioned above are the basic steps that one has to take to apply and get the loans approved. It sure is no easy task, might be little complicated, but sure quite within anyone’s capacity.

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What questions you need to ask a builder before engaging?

| How to Guides | November 23, 2010

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When it comes to building a house and hiring a builder, you need to be equipped with certain important questions that must be asked to a builder in order to get all the vital information that you are entitled to and he or she will have to oblige to those questions.

It is very important that you keep a track of the records of all the happenings in the process. At times, there will be certain details or the finer points that will be ambiguous in nature and rather vague, so you need to be on alert at all times. You should try and have a god rapport and a relationship with your builder, so that there is exchange of information from both sides and in case any problems crop up, they are resolved amicably leaving no room for any disputes and bitterness. If this is not achieved, there are a lot of chances where there could be disputes, distrusts which will result in lot of frustration. You should be firm in your demands and points that you make with a builder so that you are not taken advantage of. It is advisable to keep written records of all the information shared with the builder. Keep track of the activities and progress on the work of the builder. Before approaching a builder, it is better to garner as much information as possible about his past reputation and have sufficient background information about him. You could always research online and find an apt builder who boasts of a good profile. Make sure of his skills and capabilities and character before settling on a person as your builder.

You will need to ask the builder certain questions before hiring him as your builder.

  • It is good to find out the best design that the builder has to offer before letting him handle the project.
  • Next, you should find out about the business codes and all its effects and how they can be exercised. Also you should find out who is the main person in charge of this project. It is very important that you have an access to all the above mentioned information before you zero down on a builder.
  • You should be aware of the activities of the builder and how he is handling the project and the happenings of the project. Make sure he is sticking to the design and the layout that you want for your house. Remember you are the boss here and it is your house that he is building.
  • Sign the final agreement with your builder only after certain things are cleared and certain other agreements are made. Even he should be signing on the agreement ensuring that he will adhere to the clauses of the contract and will not act otherwise.
  • It is important that you find out the builder’s specifications and if he can deliver what you expect out of him.
  • Find out all about the requirements of the building and the materials that will need to be purchased for the building process. Ensure that he gives you an honest account of all the materials that would be required such as: bricks, cement, etc. He should give you an honest and an accurate estimate of the expected expenditure and get him to sign it along with the dealer.
  • Always make sure to demand for receipts in order to keep a thorough account of all that is bought.
  • Ask the builder and make sure that he is using materials of good quality. Some might cheat you by purchasing materials of low quality which are cheap and pocket the remaining amount. Keep questioning him about the quality and make it clear to him about using only high quality materials. Also, get from him the estimate of the total span of time that he will require for the completion of the house. Though there can’t be a specific date that can be fixed upon, but an estimate can always be fixed. He should not be lax about the project and delay the time of completion. You should keep a tab on the progress of the work every now and then.

These are the following questions that you need to ask the builder before finalising on anything. It is very important that you choose the right builder whom you can trust and who will adhere to all the instructions mentioned in the contract to the tee. After all it is your house that required a huge investment. So, the end result should be worth all the efforts put in.

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Invest in Residential or Commercial Land

| How to Guides | November 23, 2010

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Investing in residential or commercial property has become a trend these days with more and more number of people opting to invest. Especially, people find it extremely beneficial investing in residential property. Making an investment on a property, residential or commercial, almost always proves a boon bringing in profitable income. It is residential investment that is comparatively more stable and very beneficial in the long run. One should be smart while choosing the location of the property in that, if the location is good, the price of the plot will automatically increase keeping aside the overhead costs.

Investing in commercial property has several advantages. Firstly, it will ensure long term secure inflow of cash. With commercial property, one can sign long lease contracts. Commercial property decreases the chances of defaults on the payments.

Onus of maintenance of the property lies solely on the tenant as he will have to look after the property. Renting of commercial property is an excellent way to generate good income. The only time the property can prove to be burden is when there is a slump in the property rates.
Maintaining a residential property can prove cumbersome and is no easy task and it is very essential to keep the property in very good condition at all times. Maintenance of house requires one to spend quite some amount of money. Today, with the upsurge in market rates, people are investing a good deal as they get good returns on their investments.

Commercial property is a very stable and a profitable option to invest compared to residential property though majority of the people still prefer residential investments. This is because investing in commercial property entails higher risks as compared to residential investments. One of the major risks involved with commercial property includes poor liquidity in comparison to the bonds as well as equities and it becomes difficult to find a buyer. The price can be quoted to the buyers depending on the market conditions. If the investment portfolio is diverse, resistance and sustainability to tough market conditions will also be better. Investing only on single property can prove to be really risky because even a little decline in the sector can have negative implications on your investment. These are the demerits of investing on a commercial property and are the very reasons why people largely prefer residential investments.

You must keep it mind that the location of the property is of prime importance and a major factor in determining the value of the property along with the rent. If the location and the facilities in the area of the property are good, it will have only positive implications and also there will be good scope for developments in the future.

In case of commercial property, it is very important that you choose your tenants wisely. It is wise to pick tenants who are very consistent and have a good credit history and low credit risk and who sign long term leases. Apart from all this, the commercial success mainly depends on the market conditions. While making commercial investments, keep in mind the future developments and future prospects.
When it comes to residential property, people prefer investing in the form of fixed deposits by which they can alleviate risks and aid the investor keeping him for losing money in case of a miss – investment.

Hence, it is a universal fact that investing in residential property paints a better picture than investing in commercial property as the risks involved are much lesser and it is a safe bet for those who want to play it safe.

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Applying for housing loan

| How to Guides | November 23, 2010

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There are several banks that offer loans against property mortgage and majority of them are offered at better rates of interests. Everyone one can avail of such loans from the banks – salaried customers, businessmen, self employed people, etc. A borrower can apply for a mortgage loans based chiefly on a particular fixed asset. In India, the facilities and provisions of mortgage loans are very good and most of the banks in India provide them. The amount of mortgage loans that the banks here offer are based on  several factors such as the customer’s profile, his financial standings, capacity to repay and these factors also affect the loan tenure that is assigned. The loan tenure mainly depends on the amount of loan borrowed. Generally, the loan repayment scheme involves EMI (Equated Monthly Installments).

Mortgage loans can be applied for in many different ways and you will need to follow a particular procedure for applying for it. The interest rates of all the current clients will be discounted for and there are special cases in which the bank assigns rates following the bank policies. Now, with the power of internet, clients can apply for mortgage loans by merely filling up of forms online. Ideally all banks are charged about 1 – 2 % of the loan amount as processing fees.

The concept of mortgage loans in India has been catching up and growing slowly. The current increase which we can see is mainly due to the growth and improvement in the real estate market and increase in the construction and related activities. Initially, mortgage loans in India were provided mainly by the financial institutions. Today, commercial banks also provide these mortgage loans. Mortgage loans offered by the commercial banks are run on the nominal rates of interest.

In India, mortgage loans are offered to the customers with the idea of providing the best services. Another objective is to emphasize on the credit quality and the advance. In India, the loans are provided against some sort of a collateral security like an industrial property, or a residential house, apartment or even a commercial complex which is in the name of the loan borrower.

Mentioned below are some of the organisations that provide mortgage loans:

  • The HDFC bank mortgage service – The HDFC bank or the Housing Development Finance Co-operation mortgage service is perhaps the biggest of its kind in the country and offers the best rates on mortgage loans. It is the leading mortgage service provider in India followed by The State Bank of India.
  • Bank of Baroda – Bank of Baroda offers one of the best mortgage schemes known as the Baroda Advance against Property. This scheme is the best in India.
  • The United Bank of India – This bank has created the United Mortgage Scheme and it has proved to be significant for the financial portfolio for the bank.
  • Bank of India – Bank of India provides the BOI Star Mortgage Scheme which is known for its flexibility to suit to the diverse requirements of the people.
  • Union Bank of India – The Union Mortgage Scheme is offered by the Union Bank of India which offers efficient products to suit the customers’ requirements.
  • The State Bank of Mysore – The State Bank of Mysore offers the Equitable Mortgage of Property which offers important financial products. It offers loans based on this scheme for purposes such as purchasing a vehicle, motorcycle or a car. The loans are generally provided on the basis of ones capacity to repay the loans.

Other purposes for which these loans can be sanctioned are education, medical reasons or marriage. One can avail of these loans for purposes like: renovation and maintenance of house, buying a plot, constructing a house, etc. One can meet their various commercial needs, trade requirements and other business – related requirements by availing loans under this scheme.

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IFFCO eyeing overseas tie-up for Nellore dairy project

| News | November 22, 2010

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The world’s largest farmers cooperative Iffco today said it is negotiating with two global players for setting up an integrated dairy in its upcoming food-processing SEZ at Nellore.

Besides, Indian Farmers Fertiliser Co-Operatives (Iffco) is also in talks with a Russian company for setting up a fertiliser plant there, Managing Director U S Awasthi of the company said.

“We are negotiating with a firm in the US and New Zealand for setting up an integrated dairy in our farm-based food processing SEZ (special economic zone) in Nellore,” Awasthi told reporters here.

The proposed dairy envisages an investment of Rs 1,000 crore, Awasthi said, adding, “we expect to sign the deal before end-December.”

Besides equity partner, the overseas firm would also be a management partner in the venture, he said, adding, “the marketing will be done by Iffco.”

The venture would have around 6,000 livestock, which will be imported to begin with “however, later we will develop a local cross-breed”, Awasthi said.

Iffco is also scouting for a partner to set up a fertiliser plant in Russia. “We are talking with a Russian company for a joint venture for fertiliser production there,” he said.

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