Real opportunities in real estate?

Last Updated: Sun, Jun 08, 2014 06:52 hrs

Since May 16, the Bombay Stock Exchange's realty index has risen 32.50 per cent. The surge in real estate stocks suggest that the property market is booming again. But analysts believe that the fortunes of the sector will not change so soon. Does it mean then that before the price rise starts, buyers should jump to buy property?

There are quite a few things happening in the sector. Given that a strong government is at the Centre, there should be stability over the next several years. Also, there are expectations that the economy will start performing better which will give fillip to the sector.

At this point, there is a need to look at the various alternatives and options that are present in the market as it will help improve returns. Property buyers can also save money by way of the cost of property or availability of good facilities with a house. Since property investment requires significant amount of money, it is important to look at this aspect.

Let's take a closer look at some of the points that would help the individual in getting a good deal in the current scenario.

Ready, yet unsold

Though the stock market is booming, the real estate sector has still not seen a revival in sentiment. Hence, for all those looking to get a good deal, there is still time to ensure they get one.

However, it will require a lot of ground work that can yield better results, in terms of the choice of a property that is just right for you. Go to individual brokers in a particular area and select properties that are ready but stuck because of slowdown. If you are lucky, you would find a good property.

In addition, it should also lead to some savings. One of the things that property buyers need to do is to ensure that they carefully check all the available properties in any area. They will come across many projects where properties are still unsold due to the the current slowdown and there could be a good opportunity.

At present, there would be many developers who want to ensure that they close the sales of their projects. But a lot of these have got stuck because several properties have not been sold till now. With market sentiments picking up, the developer would want to ensure that the remaining ones go off their inventory list and they move on to other projects.

This is where the ground work would come handy as it would help potential buyers know individual house properties that are unsold. Then, they should enquire to see if the properties match their requirement(s).

The buyers could save some money in the form of a consolidated lower cost, either in terms of the price or in terms of the total amount paid for the property and the additional facilities given with it.

Look for projects that have been completed recently. These would be the right ones to ensure that you get a relatively new property, along with some savings.

Resale offers

Many builders, in their zeal to show that their properties have been sold off, park their properties with investors. But in this long downturn, many investors are stuck with such properties. Many such investors would be itching to exit. Given the right price, even if a little lower than market price, they may sell off.

This presents another opportunity for individuals who are looking to purchase a property. With the new government in place and things moving on the economic front, many properties will also come on the market. There could be various reasons why the property is up for sale which includes individuals in need of cash, looking for alternative investments and so on.

There is likely to be a reasonable element of pricing as well since the existing investor would now want the deal to actually go through. In many cases, when there is a need for funds for the existing property owners then they are willing to sweeten the financial in such a way that the buyer also finds the situation profitable. This would be something that should be looked at and once again, with a little homework it can lead to getting a good deal.

This would require also being clear about where one intends to buy the property and then, doing a proper due diligence of the resale offer that is on hand. Often, this works out to be better for the buyer as they get things in running order which does not require too much of additional investment. They can also negotiate on the financial terms and the benefits that come along with this to ensure a fair price.

Long-term opportunities for investors

For investors, ones who might not require a property for immediate occupation, but would want to invest in one to earn a premium in the future or even use it, this would be a good opportunity.

The new government is talking about setting up 100 new cities and there would also be a focus on new infrastructure. This would ensure that there would be a lot of work that would be visible in the coming years that would boost basic infrastructure.

This is an opportunity for individuals because they can look at proposed plans and then make a smart investment. This would, however, need proper identification of areas where the development impact would be visible. Plan a purchase in this particular area so that there are some benefits some years down the line. The benefit of this could also be that the prices paid for the purchase of the property now could be low and that there could be strong appreciation over the years.

It would also require patience of a long-term investor to actually wait out the period. Pay attention to such details and don't ignore such opportunities.

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