Why Should You Buy Land in a Unique and Luxurious Manner?
- The National average appreciation rate for Real estate is around 3% to 5%.
- According to the statistics and Real estate Experts’ opinion, 2020 had seen the most traction ( growth ) for the Real estate sellers.
- Good quality living should be within everyone’s reach.
- In India, the people are always after the investment in buying land and gold. Both are very important investments from the beginning of human culture.
- Both property types of investments have their advantages to a great extent.
- The lifetime period is short for human beings. But the life and value of land, gold gets increase with time.
- “Housing for all by 2022 “ mission “ Pradhan Mantri Yojana – PMAY ” – is halfway through its deadline.
- The Reserve Bank of India raised the housing loan limits under Priority sector lending ( PSL ) for weaker sections and lower-income groups.
- With this, the buyer in Metros can now avail of a home loan of up to Rs. 35 lakhs as against up to Rs.28 lakhs earlier. in the cities, the buyer can avail loans up to Rs. 25 lakhs
- The people always have an urge to own buy land.
- Some people think about their peaceful Post – Retirement Life.
- The cost of living is keeping pace with income levels for multifamily.
- The upcoming plotted developments are at preferred locations with the best price.
- The preference for affordable apartment units will also continue to gain momentum.
- Buying a property could be one of the most important decisions of our life.
- One can select the land to buy near me exactly the way he has envisioned it.
Current Scenario of Real Estate and Buy Land Methods
- The plot sizes start as low as 560 sq. ft and go all the way up to 2400 sq. ft. and more.
- The plots starting from 11 lakh onwards are available. ( surrounded by all that we need )
- And the average prices are at Rs.2,500/- sq.ft.
- The buyer trends are always based on current inquiries, the highest demand is for plots sized between 1000 – 1200 sq. ft with an average price range of Rs.25/- – Rs.35/- lakh.
- The buyers are preferring more customized space and hence the trend of plotted developments is on the rise.
- With the developing infrastructure, robust connectivity, and the growth of IT/ITes establishment, the plot land demand in Chennai is likely to surge very big in the times to come so buy land.
- Chennai also receives a considerable number of NRI investment opportunities as well.
Categories And Payment Options To Be Considered
- We have to identify the following five most important categories and payment options before we decide on our purpose.
- Buy and Sell (Short-Term): This is generally for a quick, small to medium profit.
- Buy and Sell (Long-Term): This is generally focused on large intrinsic value appreciation over a long period.
- Buy and Lease: This offers regular income and long-term value appreciation.
- Buy land and Self-Use :
We can save on rental property and have the benefit of self-utilization.
The value appreciation of the property takes place.
Buy V/S Rent Approach
- Many buy land a property to use rent collected from the property to pay EMIs.
Experts say that it is a wrong approach. - Because there is always a chance for the property to remain vacant for months together before we find a tenant.
Payment Option
- The important payment options available in the
market are as below
1. Down-Payment Plan.
2. Flexi-Payment Plan.
3. Construction-Linked Plan.
4. Possession-Linked Plan. - Sometimes the downpayment might be more than
- The high operating costs can add an extra financial burden to our investment.
Indirect Investments In Real Estate
- Real Estate Investments Trusts ( REITs)
- The real estate investment trusts offer a way to invest in real estate without having to own, operate, or finance properties.
- The owner of many commercial properties sells shares ( often traded ) to investors and then passes on the rental income in the form of a distribution.
- Real Estate Company Stocks.
- Real Estate Sector-focused Mutual funds and ETFs.
- Mortgage Bonds.
- Mortgage Bonds – Backed Securities ( MBS ).
The Type Of Land Sellers
The following is the list of land sellers
- Government authority Land Sellers.
- Private developer Land Sellers.
- Private Individual Land Sellers.
- Real estate Experts’ opinion is that 2020 will see the most traction ( growth ) for the Real estate sellers.
- Chennai is ranked as the safest city in India and also the 4th largest city in India attracts a lot of people from other cities due to its booming job opportunities.
Important Factors To Be Considered Before The Decision On Buy land
Nature Of Flexibility
- We can buy land and keep it with the purpose of home construction after a certain period of time.
- If the situation is not in our favor in the future, then we can sell the land to someone for high returns.
- So, the vacant land has the flexibility to adopt all the chances of our wish to tool in the future.
- The time taken for planning and implementing the construction is according to one’s wish, decision, and availability of funds.
- The immediate construction possibilities are there and at the same time, they have the option of postponing the construction work for a later period.
- The demand for land is always on the increasing side and the value also gets increased due to market changes and political scenarios in the country.
- The people can choose the property at a young stage and keep it for some time as an ideal and after a certain period of time, they can go for with construction ideas or otherwise they can sell it at the buy land value at an increased current value of the market. It depends on one’s planning with financial backup.
Property Location
- The property location is the important factor for profitability in real estate investing.
- The location is the mid-to-long-term view of how the area is expected to evolve over the investment period.
Amenities
- The closeness to markets, warehouses, transport hubs, freeways, and tax-exempt areas is to be considered.
- The proximity to amenities, green space, scenic views, and the neighborhood’s status factor to be checked.
Road Infrastructure and Utilities
- The areas should have good public transportation systems.
- The selected area should be well connected by both road and rail.
- Plots should have marked access to public streets/roads/pathways.
- If the plot is situated with a front on the street/road, it’s better.
- The utility connections and sewerage needs to be in place.
- The vacant land is connected to a road and it should be connected to public utilities such as water, gas, and electricity.
- The increase in value of land is dependent on the surrounding infrastructure improvements. So, the proper care has to be taken to check the nature and improvement possibilities in an area.
Low Investment
- The plot/land investment is always with less investment cost.
Appreciation
- Real estate values tend to increase over time, and with a good investment, we can turn a profit when it’s time to sell.
- Rents also tend to rise over time, which can lead to higher cash flow.
- The property value is usually appreciated on its own over the long – term.
- And also the owner can force appreciation on their properties through renovations, zoning changes, and other updates to their buildings.
Build Equity And Wealth
- As we pay down a property mortgage, we build equity – an asset that’s part of our net worth.
- And as we build equity, we have the leverage to buy land more properties and increase cash flow and wealth even more.
Tax Breaks And Deductions
- Real estate investors can take advantage of numerous tax breaks and deductions that can save money at tax time.
- In general, we can detect the reasonable costs of owning, operating, and maintaining a property.
Portfolio Diversification
- Portfolio diversification is possible in real estate investments.
- The addition of real estate to a portfolio of diversified assets can lower portfolio volatility and provide a higher return per unit of risk.
Leverage
- Leverage is the use of various financial instruments or borrowed capital to increase an investment’s potential return.
- For example, a 20% down payment on a mortgage, gets us 100% of the house we want to buy land – that is the leverage and its advantages.
Competitive Risk-adjusted Returns
- The real estate income may vary depending on the factors such as location property class and management.
Inflation Hedge
- The inflation hedge capability of real estate stems from the positive relationship between GDP growth and the demand for real estate.
- As economies expand, the demand for real estate drives rents higher. more it translates higher capital values into the language.
Cash Flow
- Cash flow is the net income from a real estate investment after mortgage payments and operating expenses have been made.
- So, the cash flow refers to how much money is left after the expenses.
- The positive cash flow is good and enhances a good rate of return on an investment property.
- Cash flow strengthened over time as we pay down our mortgage – build up our equity.
The Interest Rate Trends
- Low mortgage rates result in more demand, which drives up values and causes steeper price appreciation.
- Higher rates, on the other hand, do the opposite.
Best Places For Investment In Chennai
- Areas in and around OMR, Vandalur, Kelambakkam Road, GST, Avadi, Thirumazhisai, Melpakkam, Sembakkam, Panruti, Rathinamangalam, Kanagapattu, Nungambakkam, Thiruvanmiyur, Perungudi, Mogappair, Anna nagar, Siruseri, Oragadam, ECR, Urapakkam and Guduvanchery are to name a few.
- Mount Poonamalle High Road ( MPR ) and Pallikaranai – Medavakkam Stretch.
- Pallavaram – Thoraipakkam Road ( PTR ) – 3 Metro Stations and always busy.
- Pallavaram – Kothandam nagar
- Keelkattalai – Eachankadu
- Okkiyam – Thoraipakkam
- There are 2 big IT Parks of DLF and Brigade’s World Trade Centre Building under construction in Perungudi.
- The IT parks in Porur and the Sriperumbudur industrial belt have boosted realty demand in Iyyappanthangal.
- The North Chennai area near Sri City is the fastest-growing region around Chennai for a 100 km radius.
- These areas are realizing tremendous appreciation and their infrastructure is gaining a new shape.
- These above-mentioned places offer steady development and excellent connectivity.
- And also Integrated townships with excellent infrastructure facilities, smart space planning, outstanding top-notch modern amenities, a pollution-free environment for healthy living, and enhancing community living with rapid land value appreciation is up to a satisfactory level.
- The area of plots ranges from 770 to 1500 sq. ft.
- The plots of unit sizes range from 920 – 1200 sq. ft.
- According to the statistics and Real estate agent near me Experts’ opinion, 2020 will see the most traction ( growth ) for Real estate sellers.
Property Rates And Price Trends In Chennai
- The property rates and price trends in Chennai provide the details of localities in Chennai, buy land rates of the price range ( Rs…… per sq. ft ) with the status of availability.
- Check the latest property listings website.
- Check the Popular properties website.
- Check the Featured properties website.
- The price range starts from the least to the maximum in the market.
Factors To Be Checked
- Look At The Land’s History
- We should consider the history and what the land has been previously used for, as this could affect our plans and future use.
- We can get a photograph and a soils report to ensure that we can build on the land.
- Check The Site
- Sometimes the layout in the brochure could be different from the reality.
- So, do a thorough site visit before booking the property.
- Verify the land measurement. Invite a local surveyor for the proper measurement of the land.
- Check whether the road area and park area have been handed over to the local body.
- And also the nature and status of nearby projects of the areas.
- Interact with people in the neighborhood as they may know about any illegal occupation or other legal disputes related to the property.
- Verify Land Use Zone
- Verify the land-use zone as per the city master plan for the plot.
- We can get the plan from the local body office in our respective city.
- Release Certificate
- In case, if we are buying a property in resale, remember that it may have been pledged to get a bank loan.
- In such a case, we have to get a release certificate from the bank, which will prove that the loan on the land has been repaid.
- Property Tax Receipts
- If we are buying a property in resale for buy land, ask for the previous property tax receipts from the seller along with other bills.
- In this way, we can ensure that there are no pending bills.
- Verify Patta, Ec, And Identity Of Seller
- The data should be taken in the name of the owner. Don’t believe the seller’s words that the patta is in the name of the previous owner.
- Verify the identity of the seller.
The PAN Card, Voter’s ID, Driving License, and Passport. - Verify the Encumbrance CertificateAn Encumbrance certificate will show the previous transactions with names of buyers and sellers as well instead, appoint a lawyer to verify parent documents like patta which shows that the loan was bought and the sale deed.
- Check For Proper Title
- Check whether the seller has a proper title with the help of a very good Advocate.
- The seller should have a clear title of the land.
- Hire a property lawyer to check this. Check for sale deeds and if the seller has the same agreement or power of attorney, check these legal documents for buying a plot as the risk of fraud is higher.
- Approvals By Local Body
- Make sure that the entire layout has been approved by the development corporation and the local body of the city.
- If the property is within the city limits, then verify the CMDA Approval is perfect.
- If the property is outside the city limits, then DTCP approval is a must. and verify the approval is perfect.
- Verify the Master plan of the site.
Advantages Of Buying Land
- Favourable Property Tax
- The property tax of land is always much lower than that it is for buying a house.
- In some metropolitan cities, the property tax on residential homes can go up to Rs. 5/sq.ft, for tenanted homes and Rs. 250/sq.ft on self-occupied homes.
- Whereas, the property tax on vacant land starts at Rs.12/sq.ft and goes up to Rs.0.50/sq.ft.
- So, there is a greater possibility for saving money on property tax.
- Incurring Investment
- The investment in the buy land will be in demand as a result of which, its prices will continue to increase and get us high returns with minimal risk.
- And also only a limited number of lands are available for ownership in certain areas. But the demand for land is increasing day by day.
- Fixed Guarantee For Appreciation
- The investment in a plot of land will give you an edge over homes.
- The value of land has been appreciating much faster than residential property.
- The Period Between Purchase And Possession
- The possibility of a delay in possession of a plot of land is very low.
- Since the buyers can take possession of their new asset
- Low Budget For Maintenance Costs
- The investment in land can be done without much worry about maintenance cost
- And frequent regular upkeep is not required.
- The only thing required is that we have to do the fencing of the land and maintain the survey stones with survey numbers on all four corners.
- Initial Investment Is Very Reasonable And Low
- Many people in their early thirty years choose to purchase land early in life and build a home on it later when they have more savings.
- This type of approach and planning will work out to be much cheaper than purchasing a home and paying EMIs for it.
Drawbacks Of Buy Land
- It Doesn’t Generate Income Straightaway
- The vacant land will not generate any income immediately.
- We will generate an income once we sell the land for more than what we paid for it.
- The Impact Of Nature
- Sometimes nature has an impact on the value of the land.
- And it is not the market – the weather, the natural disasters, and other factors out of our control and can take a serious toll on our investment.
- Fewer Tax Advantages
- The vacant land doesn’t have much to offer when it comes to tax advantages.
- Impact Of Land Size
- It’s best to buy land smaller pieces of land compared to larger land lots, as the larger the land size, the harder it is to sell.
- Unpredictable Market Changes
- The possible risk factor is that sometimes the market is unpredictable and can change on a dime.
- Be sure that we are paying the right price for our investments.
Conclusion
- Chennai is a great place to buy land a plot for residential or investment purposes.
- Chennai has expanded far and wide with new land additions and the cost of living is keeping pace with income levels.
- The most important thing is excellent connectivity in and around the city with a promise for secured community living and outstanding modern infrastructure facilities.
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