Buying a property

Purchasing a house (apartment, independent house, etc.), or a vacant land (plot, farm land, etc.), or any property is not a simple undertaking as it involves significant expenditure. So, almost everyone does a lot of research and analysis before concluding to go ahead with buying the property. Usually most people consider the following factors:

• Location, e.g., close to work, schools, hospitals, transportation, supermarkets, banks, etc.
  
• Growth potential, e.g., price increase in next few months, years, etc.
• Payment, e.g., loan, lump sum, installments, all cash, etc.
• Area, e.g., carpet area, parking space, number of rooms, etc.
• Builder, e.g., reputation, quality, time, risk, etc.
• Indirect expenses, e.g., taxes, maintenance, etc.
• Completion status, e.g., bare bones (no shelves/cupboards), fully furnished, etc.
• Agent (broker), e.g., helpful, providing relevant information, helping with negotiation, etc.
  

 Following are a few different options when purchasing a property:

• Farm land - usually the sizes are in a few acres which is great if you're interested in farming (including giving for lease), or as an investment if the land is small (less than an acre).
• Vacant plot - usually the sizes are in a few hundreds of sq. yards, which is good as investment if the location is good.
• Independent house - great option if you want independence, but cheaper would be to purchase a piece of land and construct as per your requirements but that'll be a significant undertaking.
• Apartment - great option if the land prices are too high and/or if you prefer to have neighbors and be part of a close-knit community.
• Villa - great option if the land price is affordable and you don't wish to be impacted by overhead neighbors' jumping (when comparing with apartments).
  
• Commercial - great option if you have adequate knowledge and can maintain it.
  

However, most people don't consider the long-term strategy. Following are the top three important factors to consider which I've found from my experience.

1. Buying vs renting? If you don't need to live in that area, then consider renting somewhere you're comfortable. However, if you'd like to protect yourself from some financial uncertainties such as potentially higher rents in the future, or want the freedom to modify/decorate your house as you wish, or not be asked to vacate by owners, etc. then perhaps it's worth buying instead of renting.
2. Investment vs home? If considering as an investment, then apartments appreciate in value only for a limited amount of time so you'll have to sell at the right time. Sometimes it could continuously appreciate for a few decades (e.g., if the location and/or quality are good), otherwise it's much lesser. Note that the rate of appreciation would certainly not match that of an empty piece of land. So, if you're looking at it as a pure investment then instead buy some vacant land which is somewhat close to the city (preferably at less cost, e.g., less than 20k per sq yd) since that would appreciate a lot more than the apartment. However, if you're buying it as a home but treating it as an investment then it could cause conflicting priorities.
3. Consider the indirect impact of the society. For example, whether the neighbors would be like-minded, would you enjoy their company or be annoyed or don't care, would you be glad to contribute and participate in community events, would you learn and benefit from others, etc. One of the easiest ways to assess is to understand that others also have most likely gone through the same thought process as you, have similar financial capability, etc. If you'd like to have lavish neighbors with better company (especially impacts kids in the long term), then perhaps buy a more expensive unit or live at an upscale rented property.

You might already know these, but just listing out the basic prerequisites before buying a property:

1. Money.
• Assuming you're going to apply for a home loan, you should have a minimum amount of 15% of the total property value. If the property value is above Rs 50 Lakh, then a minimum of 25%. If you're not purchasing an apartment, then add 10% to what I mentioned earlier.
  
• The following are a few typical expenses if you're buying property in Hyderabad:
• Registration: 7.5% of the property registration amount. Note that it's not necessary to register for the full amount!
• Agent (broker): usually 1%-2%. Negotiate that first before seeing any properties!
• Maintenance, corpus fund, etc.: if it's in a community (e.g., apartment, villa, etc.)
• Property tax: usually a much smaller amount when compared to the property value, close to about 0.1%.
• Miscellaneous expenses:water (e.g., HMWSSB connection, bore-well, etc.), electricity (e.g., electricity meter, transformer/pole shifting, extension/laying of wires, etc.). It's best to park some amount (e.g., Rs 5 Lakh) for such unforeseen expenses.
  
2. How to research?
• Start with usual web search. I've found these useful for Hyderabad:
• https://www.google.co.in/search?q=properties+in+hyderabad
• https://www.magicbricks.com/property-for-sale-rent-in-Hyderabad/residential-real-estate-Hyderabad
• https://www.99acres.com/property-in-hyderabad-ffid
• https://housing.com/in/buy/real-estate-hyderabad
• https://www.makaan.com/hyderabad-residential-property/buy-property-in-hyderabad-city
• https://www.commonfloor.com/hyderabad-property/for-sale
• https://www.nobroker.in/flats-for-sale-in-hyderabad_hyderabad
• Go through a few YouTube videos to get an idea of the market conditions, for example check out these channels (as of 2022) and also watch any suggested videos that you find interesting as you're viewing those videos:
• https://www.youtube.com/@KaranReddyReviews/videos
• https://www.youtube.com/@RealEstateWithLaxman/videos
• https://www.youtube.com/@TravelWithLaxman/videos
• https://www.youtube.com/@realestatepatashala/videos
• Shortlist the areas where you want to purchase the property based on your preferences (budget, requirements, etc.). Then shortlist a few properties in the areas where you're interested in. Get the contact details (usually phone numbers) of the owner/agent and call them.
• Visit the properties - this will need some time, usually a few days. It's usually best to do the research, call agents/owners on weekdays, and visit all the properties on a specific day or weekend.
  
• Inquire about the sellers' expectations on how you'll need to pay before negotiating. E.g., some sellers may not be comfortable with all amount transferred online since they may expect some percentage to be paid in liquid cash.
• One piece of advice when negotiating: "cash" means physical cash! If you're going to transfer online and not going to hand over bundles/bags of cash, don't say you'll pay cash. Be clear how you'll exactly pay to avoid any misunderstandings later.
• Write down on a piece of white paper about your agreement and get both the parties to sign it. Usually the agent (broker) takes care of that, but sometimes if the agent (broker) is immature or new, you'll need to use your best judgement.
• If it's going to take time to arrange the amount, then specify when you'll pay the full amount, when you're planning to go for registration of property, how you'll pay, etc. If the payment is going to take significant amount of time or if there are per-requisites to arranging the money (e.g., if you're going to start home loan process) then formally do it on a bond paper with revenue stamp.
  

I hope this helps in arriving at a better decision instead of adding to the confusion. Good luck and all the best!