Guidelines for Buying a Flat
While buying a flat remember the following guidelines:
1) Assess the track record of the builder; Collect information the projects undertaken by the builder. Meet his previous customers and find out whether the quality of construction has been good, whether schedules have been maintained, and whether commitments have been honored.
2) Consult a lawyer: Get the title deeds as well as proposed sale (and/or construction) deed examined by a lawyer.
3) Link payment with progress: Make payments in installments that are linked to well defined milestones in construction
4) Demand an allotment letter: Insist on getting the allotment letter at the time of booking the flat. Ensure that the allotment letter clearly states the price which includes the land cost as well as the construction cost, specifies the payment schedule and contains the plan for the flat
5) Get a copy of the approved plan: Ask for a copy of the plan as approved by the appropriate authority (corporation or development authority). Ensure that the building is in conformity with the approved plan.
The more affluent investors may be interested in investing in commercial property. This may take the form of constructing a commercial complex or buying office or shop space in a commercial complex.
The appeal of such an investment lies mainly in the form of regular rental income which can be revised upward periodically. Further, the commercial property may enjoy some capital appreciation over a period of time. The disadvantage of such an investment is that it requires a large outlay and may require time and effort in managing it.
The appreciation in the value of agricultural land makes it an attractive investment proposition. Its appeal is further enhanced by the following factors.
1) Agricultural income per se is not taxable. However, it is included in the total income for determining the tax rate applicable to the non-agricultural income of the assessee.
2) Agricultural land is exempt from wealth tax
3) Loans are available for agricultural operations at a concessional rate.
4) There is a charm in living in a farmhouse
5) Capital gains arising from the sale of agricultural land may be tax exempt in some cases (as certain types of agricultural land are not regarded as capital assets) or may be taxed at a concessional rate.
As against the above attractions, investment in agricultural land has some problems associated with it. The principal ones are.
1) In many states land ceiling laws are quite restrictive. Moreover in some states the law precludes non-agriculturists from acquiring agricultural land.
2) Many states have laws that confer ownership to the cultivating tenant.
3) Farm houses, in general are not very safe
4) Agricultural activity is often uneconomical or unprofitable particularly if it is done on a part time basis.
Land within city limits is often very costly. However, you can buy residential land (converted land) in private layouts in suburban areas at affordable prices. Such an investment offers scope for capital appreciation. Further, it gives you an opportunity to move to a quieter location that may not be very far from the city as the city expands.
If you are considering buying suburban land, make sure that the developer satisfies all zonal requirements and has a clear title. Many people have been cheated by fly by night land developers.
Time share in a Holiday Resort:
In the last 15 years or so, a number of time sharing holiday resorts have come up. You can buy one or two weeks in a holiday resort of your choice. Such an investment offers several advantages.
1) The outlay is modest and affordable
2) Often you get a choice of two or more locations
3) If you don’t use a certain week, you can rent it or accumulate it.
4) The value of your time share appreciates like any other property does.
5) You don’t have to bother about security or safety.