Residential Real Estate or Property in India

Shortlisting of properties in India for purchase is a technical issue, which requires a lot of thought process and due diligence. It needs to be approached in a structured manner as real estate in India is a disorganized sector which lacks user faith and confidence.

Purpose of procurement of Residential Property in India

The method of shortlisting of property is dependent on the purpose for which the property is being purchased.  Therefore, as an individual investor one needs to be clear of the fact, whether the property being purchased is for self-use for investment purposes.

Shortlisting the Location for property purchase in India

The second step is to select the city where the property is to be bought in India. Generally cities in India can be classified into three categories, Class A , Class B and Class C cities. The basis of this classification is dependent on a number of factors, like population, per capita income, contribution to GDP, infrastructure etc. . Class A cities are the major metropolises and cities which have an international airport; these are generally one per state. Class B are the second tier cities, which generally have a domestic airport; maybe 3 to 4 in a state depending on its size; examples are Ahmedabad, Indore, Bhopal. Class C cities are generally more in number; do not have a domestic airport and are in the developing phase; examples are Bhiwadi, Neemrana, Thane.

Once the city has been decided, it is important to home onto the locality. Each locality has its own nuances and peculiarities which need to be understood. Based on a number of factors localities can also be classified into three categories i.e. high end, middle income group or middle class and affordable. This classification generally defines the market rates as well as circle rates of the locality. Purchase of Property in India is a meshed activity, as a number of these factors overlap and there is a need to prioritize each of the contributors in the decision making cycle.

Available Budget for investment in Real Estate in India

This is the single most important factor which contributes towards all other aspects of identifying the piece of residential property in India to be purchased. This varies from individual to individual and cannot be quantified on logic based analysis. However, if house loans are involved then it should be kept in mind that the loan amount does not exceed 45% of the total income.

Accommodation Design or Size of the Residential Property

The two factors which influence this decision directly are the purpose for which the property is being procured and secondly the budget availability. As an example if the residential property is for self-use and the minimum requirement is 3BHK; budget is limited, then one may compromise on the location within a city to match all the aspects.

Purchase of Residential property in India is like a mazed puzzle; one needs to be deliberate; take logical analytic decisions; be able to join all the pieces; and probably the most important of all – have faith on God.4

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