Tips on Owning Property Under Five Lakhs

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If you live in a country like India, you will know that not everyone can afford luxurious or mid-range houses. But, everyone is entitled to own a house of their own. If you fall under this category, and you are not willing to take a home loan, there are still ways in which you can buy a low-cost property. This article gives you some tips on owning property under 5 lakhs in India.
Invest in Property Through Fractional Ownership
Fractional ownership is a process by which you can invest in a high-end property with several other investors. The primary intention is to share the cost of the property, and then divide the returns from investment.
If you are expecting capital appreciation, investing in residential properties is the best option for you. However, if you invest in commercial properties, you can expect a rental yield of 7 to 10 percent. Over the past 3 decades, rental yields from residential properties have remained stagnant at 3 percent. According to real estate experts, a minimum amount of Rs 2 to 3 crore is needed to buy commercial and retail spaces.
Contrary to commercial assets, you can invest in residential properties with a few lakhs. According to commonfloor.com, you can buy properties in the price range of Rs.40 to 60 lakhs in cities like Bangalore, Chennai, and Mumbai. In a city like Bangalore, you can easily expect a capital appreciation of 15 percent in prime locations such as Sarjapur Road and Whitefield.
Some real estate companies can help you in investing through this platform. These companies will help you find tenants, negotiate rents, and also take responsibility for the sale of your property.
Own Property Through Organised Co-Ownership
Organised co-ownership is a platform that lets you invest in the real estate market directly with other co-investors. Through this arrangement, you will either get joint-ownership or a stake in a company that owns the particular property you are interested in. It all depends on the number of investors.
If the number of investors in a co-ownership is too less, then the company may make special arrangements. You will be an investor as well as a shareholder. In such cases, you have to sign an agreement that states your investment amount and the fragment of ownership.
You will only account for the capital invested by you. This type of investment is different from investing in real estate investment trusts, where you invest in a wide range of properties. Here, you can choose a residential property, visit the site, and then make payments. The best part, is you also get to know your investors. But, remember that if you are investing as partner in a company, you are not eligible for a home loan.

Hire Good Architects and Contractors
If you are not willing to invest in fractional or co-ownership, but prefer having a house of your own, there are some options still open for you. Search for architects and builders who have a reputation of constructing houses fewer than 5 lakhs. Ask the builders to use interlocking bricks as they are cheap and keep the interiors of the house cool. You can also opt for terracotta roof tiles.
The success for this kind of project depends on the meticulous planning and selection of construction materials. You can use ceramic tiles and recycled windows and doors. The recycled items can be polished and used in your house. This way you will save a lot of money. Remember, to chalk out a detailed plan so that you don’t have to undertake extra costs at the end of the project.

Now that you have learned about the various options available to you, invest in a property of your choice. You will not have full ownership of the property immediately, but when you earn high investment after selling the property, you can definitely purchase another property and call it home.

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