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Four questions you must ask before buying a property

Four questions you must ask before buying a property

Four questions you must ask before buying a property

One morning, let’s say, you decide to buy a house, but you have serious reservations in your mind. You might be a little nervous and have questions, as you are about to make the most vital financial purchase of your life. Buying a home isn’t as difficult as you might think. If you give a serious thought to your requirements before you begin with this journey, the process can be smoothened as a piece of cake.


The 4 basic questions you need to ask yourself before looking for a property are:


1. Reason for buying the property?

Understanding the purpose of your purchase is extremely important, as that will define the kind of money and time you should invest in it. It might be a home, a long term investment or a regular source of income. For example –You might invest in an assured returns commercial property if you are looking for a regular source of income. Though this might carry a higher risk but will also help you drawing higher monthly income. Buy-to-let is another option that people opt for, where you buy the property to let it on rent. This will require higher investment as you will be buying a completed property. It may not be very attractive but might be feasible as the EMIs can be paid off by the rent and can prove to be a source of regular income.

2. What is the kind of property?


For a residential property; plot, apartment, villa, independent house etc. are some of the options to choose from. What kind of property you eventually buy depends majorly on your budget. For example –majorly the affordable plots are available in the outskirts of city whereas apartment options are open anywhere across the city. Within apartments the budget requirement varies depending on whether it is 1/2/3 or 4 BHK. Villa though an attractive option will require heavy investment when compared to apartments.

3. Where do you wish to buy the property?

Location of the property is another important aspect. This too depends on the purpose of the property. If you are looking for a long term investment, then invest in a property that is located in an upcoming area. You need to ensure that the area is set to have complete infrastructure in near future and has important commercial projects coming up. This will largely appreciate the value of the property. Also, if the area is not yet developed then it may be available at a lower price. Ensuring the access to public and social amenities like bus stops, railway stations, health care centers, schools and commercial areas becomes important, if you are planning to buy a property for end use purpose. Similarly, if it’s a commercial property, then make sure that the property is well connected with proper transport facilities.

4. How to get finances for your property?


You can either use your savings and make the entire payment through cash or use the same for the initial down payment. You can also go for a property loan in case you don’t have ready cash. You can avail up to 85 per cent of the value of an apartment (for an apartment of Rs 20 lakhs) and up to 80 per cent of the value of an apartment priced above Rs 20 lakhs as loan amount. While for a plot, the loan available could vary from 70-75 per cent depending upon the plot size. For a commercial property, 50 to 60 per cent of the value of the property can be availed as a loan amount.Salary package, background and company details are some of the major criteria that the banks take into consideration, before sanctioning the loan. While applying for a loan, make sure that you check the interest rates for the loan plan.


These are some of the legal and technical issues involved in buying a property; however you can always choose the option that fits into your budget and works the best for you.

Last Updated: Thu Oct 01 2015

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