These are some of the measures which would help you in staying away from deception while investing in Real Estate Sector.

1. Before investing in real estate, you got to analyze it from various angles. The most important aspect relates to reputation and credibility of the real estate developer. In the case of new project launches, check for timely completion of the projects in the past.
2. You may follow a checklist to clarify about the property ownership. Trace prior ownership to avoid any dispute in the future. Verify if the seller is authorized to sell the land and there are no pending taxes. Look for approvals by the city development corporation and other local authorities. Seek information about clearances for further development.
3. Make use of leverage prudently. While seeking home loans, scan the state of interest rate regime. Don’t borrow more than your repayment capacity.
4. While taking decisions of investing in real estate, keep your financial goals in mind. If you are aiming for high returns, then commercial properties are a better option than residential properties. Commercial properties provide higher yields as compared to residential properties.
5. Residential properties are suitable for individual investors. People tend to invest the single sum of big amount in a single asset class. Their aim is to hold it for the medium to long term.
6. Commercial properties are regarded as more suitable for high net worth and institutional investors. They are capable of taking more risk.

Bringing Transparency through RERA

The government launched the Real Estate (Regulation and Development) Act, 2016 on 1 May 2017. It provides the real estate sector with an autonomous regulator. It has been launched to remove the irregularities prevailing in the real estate sector in India. Efforts are being made to include industry practices in line with the global benchmarks.

With the inception of this Act, all the brokers and property agents will be required to register themselves. Without registration, they won’t be able to perform property-related transactions.

Also Read About : RERA and GST impacts in India

It aims at protecting interests of the investors and buyers. Now, the developer would have to quote the sticker price based on “carpet area”. Earlier, this was based on “super built up area”. It will give you clarity regarding the space that you are going to buy.

Moreover, the Act will make the developers accountable for the proper management of funds. Additionally, there will be a constant pressure towards the timely delivery of projects.

Conclusion

As a financial aim, the Real estate can become a healthy endowment for your housing needs. To stay protected, make sure that you buy only RERA compliant residential property.

Real estate may be an inferior choice over equity from returns angle as well. Hence, when your goal is wealth accumulation, your portfolio must not be skewed towards property. You may look at equity as an option in investing in real estate. The key to wealth generation lies in efficient asset allocation.

SEE: Documents Required to Buy Property in India