November 29, 2023

Housing Finance Development

It's Your Housing Finance Development

Millennials investing in real-estate

By Priya Sheth

Market watchers say that if investments are made at the right time, the yields can be immense

Owing to a sudden increase in disposable income, millennials have gained prominence as an important demographic in the homebuyers’ market post pandemic. Market watchers say that if investments are made at the right time, the yields can be immense. “I used to invest heavily in the stock market and in mutual funds, but I ended up losing a lot of money because the markets are so volatile. I didn’t have the time to monitor the performance of the stocks and exit at the right time. I have now started looking for investments in real estate as it will appreciate in the years to come and give you a good return on investment,” said a millennial.

“About three years ago, I bought property in a developing area. Now because of the development in the vicinity, the property has appreciated in value and will yield good returns when I sell it,” says Sameer Kumar, a structural engineer in his late thirties.

Pick a reputed Developer

Identify a property that is built by a reputed developer. If the building is constructed with good quality material, then the structure will encounter fewer maintenance issues. “We always recommend developers who have a good track record and financial credibility. Shortlisted projects should also be approved by RERA (Real Estate Regulatory Authority). It may be riskier to invest in an unknown developer even though he offers a lower price,” says Mahesh Shetye, a real estate consultant.

Understand the stages

Along with identifying the right developer, it is also essential to understand the various stages of property construction. “My family has had bad experiences with real estate investment. While one project didn’t take off at all, another was stuck owing to legal and financial issues linked to the developer. So, I have been cautious in investing in this space as I don’t want to lose my money,” says Tejas Parekh, a 37-year-old research analyst. It’s important to weigh the pros and cons before deciding, as under-construction projects may yield a higher return on investment at a later stage but are not completely risk free. Meanwhile, a ready-to- move-in option may be safer but more expensive.

Examine all documents

Look for any clauses, especially ambiguous terms that may cause legal disputes in the future. Prior to purchase, ensure that there are no hidden charges, overdue fees, etc. “I sought legal help while finalising my deal. It’s better to have an expert view on the transfer documents and other paper- work to avoid any legal issue at a later date,” says Karishma Khetrapal, a software developer

Financing the transaction

Millennials typically have fewer financial obligations, and this makes it easier to acquire a home loan. One can avail a longer repayment window for hassle-free repayment of equated monthly installments (EMIS). “Banks are offering good housing loan schemes, so I opted for a smaller loan and have been repaying it according to the payment schedule,” says Jigar Shah, who didn’t want to take a loan from his parents for a property investment.