Realty News

Soft Launch stage: To invest or not to invest?

Planning to buy an apartment? Confused? Skeptical about that first step?

We won’t be surprised if you answer all the above questions in affirmation. Buying an apartment is unlike buying a fancy gadget, something we are all masters of, thanks to the social media age. But here’s a tip that will help you go a long way when investing in a property- If you are planning to buy an apartment in an under-construction project, investing at an early stage of the project can get you reasonably lower rates but then it comes with risks attached.

There are two stages in which a project is launched:

The soft launch stage: This is the first phase of the launch when the developer opens the booking for brokers and select investors.

The launch stage: The second phase is the formal announcement of the project. This is when the booking opens for the general public.

Searching for a property is definitely one of the most time consuming and risky activities. You start with reading advertisements, then talk to real Estate developers, then read more advertisements, come to a conclusion and then change it again because of 3rd party interventions. In short several weeks pass by before you identify a property. And by the time you approach the builder, you notice increased prices.

So what should you do in such a situation?

They say the early bird catches the worm. Same is the real estate story. You can take advantage of the soft launch stage, when homes are offered at an inaugural discounted price as the developer is in the process of getting approvals. During this stage, the developer tries to sell a certain amount of units in the upcoming project through brokers and investors to raise early money for its projects. At this stage the developer is usually ready to reduce the prices further with higher upfront payment. The only concern with booking in the pre-launch stage is on the project getting delayed because of the delay in getting approvals but if you are an investor and going with a trustworthy brands, this is the best time to get into an under construction project. The logic is that more buyers in the initial stage mean more advances coming in, which in turn facilitates the builder to start the construction of theproject .

Just remember that builders first invite their existing customers in other projects and investors and brokers in the region. In order to become a part of the soft launch phase, you would need to express interest in the property beforehand for the developers to shortlist and invite you.

Stick to a trustworthy brand name, because then you can see their work portfolio of their other projects and have no worries. It’s not that we are suggesting you to invest in property at the early stage. But consider the option. Talk to a good property dealer in the area and ask him to keep you updated on new launches.

TIPS FOR NRI INVESTORS TO BUY A HOUSE IN INDIA

tips

It’s a daunting task for NRIs looking at investing in Indian property today. On the outside, with the rupee touching all-time lows against the dollar and India’s ‘real estate’ growth story looking bleak, the prospect for investments in property for NRIs seems like an uphill task. But this hasn’t deterred them from investing in India because, though for Indians property prices have appreciated significantly, for the overseas Indian, it has only been a marginal increase. So, whatever be your reason for investing in India, make sure that you are diligent and careful. Some important questions you need to ask yourself are:
Which city do you want to invest in?
In whose name do you want to buy the property?
If you have invested in a ready property, how do you plan to fund it?
Before any kind of an investment, engage in sufficient research or you may end up buying into micro markets. Also, make sure that the property has secured all clearances required by law. Insist on legal documents to ensure that your investment is safe.

Logically speaking, your first action plan should be to determine the nature of the property because NRI investment rules are different as per RBI guidelines. Buying a property requires time and energy and hence it’s advisable to not fall prey to hoax calls or ‘gut instincts’. Before you zero on into a project, speak to a few builders in the locality on the initial prices and the price for the last transaction. Make sure you visit a completed project by the builder to assess quality before deciding to buy.

Check the developer credentials, prime location, potential for infrastructure development and quality of property management in the project. Remember that apart from the registration cost and stamp duty, there’s also a service tax that will be levied. Once you arrive at a price at which the sale is agreed, pay through rupee denominated non-resident ordinary (NRO) or nonresident external (NRE) accounts and foreign currency non-resident (FCNR) accounts. It’s always suggested to invest in mind-sized property with high-end amenities.

Before you finalise on any property, find a good real estate adviser who will help you out with all the details. It’s advisable not to go to a broker. Most NRIs get tempted to purchase a holiday home in a hill resort or beach property or a retirement home over buying yet another flat in the city. But keep in mind that residential land purchases usually pay off well for most investors. Have any more tips? Share it with us.