Despite having a great potential, there is a huge risk associated with investing in the real estate. With each passing day, people in this country are weaving plans to buy a new house. This is owing to the trend that is powered by optimism about future income.
However, buying a home comes with many challenges. Adequate knowledge and understanding are the keys to making profitable investments in the real estate world. Hence, mentioned below are 4 things you should be aware of before purchasing properties:
Will you be able to pay off the home loan EMI?
The home loan EMI is usually 40% of the net household income unless a pending loan already exists. In the case of the EMI outgo going high, the household budget might come under pressure. Hence, it is prudent not to stretch the finances to their limits. There have been significant changes in the rules and regulation of home loans. Even though the interest rates have been cut down, investing in real estate has not been facilitated.
What are the hidden costs?
The price that is shared by the sellers for the house is for advertising it. Purposefully, additional costs are kept hidden from the potential buyers to attract more customers. During the time of payment, sellers subtly slip in the charges required for various facilities. Before buying the house, buyers should familiarise themselves with all the rules and regulations in regard to the property and payments. Only extra charges like the preferential location surcharge or the gym membership fee should be entertained.
Are you postponing your primary goals for this?
Worrying about EMI is not the only thing the buyer has to deal with. Buying a home requires a huge investment which comes at a price. This impacts other future financial plans gravely.
Often, it has been observed that people have repeatedly sacrificed their dreams and goals due to insufficient funds. Before buying a home, the buyer should plan his or her financial plan meticulously considering each and every aspect that can be affected. Compromising on health insurance or other significant investments should be avoided as well. Industry leaders like Shahid Balwa of DB Realty recommend using the retirement savings to meet the requirements of their real estate dreams. Otherwise, one can opt for loans from the Provident Fund for building or buying a house.
Is there a backup plan?
Emergencies or accidents can happen anytime. To meet the requirements of these unforeseen situations and ensuring security, people save money that can be used to implement the contingency plan.
Investing in real estate requires a huge amount of fund. This may have an impact on the present financial condition. Experts suggest buyers to always ensure that they set up a contingency fund before purchasing the house. So, even after purchasing the house, the buyer will be able to meet the needs of any financial urgency.
As per Shahid Usman Balwa, homebuyers should be informed about all the aspects that affect their home buying decision since it’s a complex and prolonged process including many legal obligations.