Think Once Should Buy or Lease a House is Better In India?

Buying or leasing a home depends on various factors. As real estate prices rise and fall in India, it becomes difficult for home buyers to decide whether to buy or rent a property. It is necessary to do a thorough research of the city's property trends and decide whether to buy or rent a property. The decision also depends on the financial status of the person.

A wrong decision will lead to huge debt or illiterate assets. Many factors will help you decide whether to buy or rent a house in India:

High property prices: Property rates are skyrocketing in cities like Mumbai, Delhi, Chennai, Ahmedabad. So it becomes difficult for buyers to buy a house. Renting a house is a wise decision. Due to the rise in property prices, Mumbai is witnessing high demand for rental properties. The rental rate in Ahmedabad is quite stable, so renting is better than buying a property.

Low or stable property prices: Cities like Pune and Hyderabad have stable property prices, so buying a house in these cities is convenient. These are neutral cities for property investment. You can buy or rent property as per your convenience. Although Bangalore is a metropolitan city, properties prices are significantly lower than other Tier I cities. Therefore it is advisable to invest in property. In fact rental rates in Bangalore are very high compared to property prices. Even Hyderabad has cheap property prices and remains an ideal property to purchase destination.

Financial condition: Buying or leasing a property also depends on the financial condition of a person. If a person is financially strong, he can buy property even if the prices are high. Investors in cities like Chennai, Delhi, Gurgaon, Faridabad, Pune can take decisions based on their financial condition.

Duration of your stay: One of the factors to consider when buying or renting a property is how long you are going to stay in that place. If you are transferred to a particular place for a job or educational purpose then it is advisable to plan and decide the duration of your stay. If you are living for a short period of time then you rent a property instead of buying and paying a home loan. If you are looking for a long term plan then you can buy property.

Inactivity: Since large amounts of capital are invested, disposing of the house is difficult. Invest in an area that has strong infrastructure facilities such as connectivity, schools, parks, etc. Rather, it is better to rent a house, being stuck with an illegal property that is not easy to dispose of. Therefore it can be concluded that, if property prices are high, it makes sense to rent instead of buying property. Buying or renting a property depends on the person's choice and the above factors.

What are Implications of death of home loan borrower?

Buying a grand house is every Indian's dream. While earlier most people bought a house after their retirement, modern people can become a homeowner in the early stage of life. This has been possible due to relaxation in home loan policies. In India, many people have successfully purchased their first home under PMAY. The scheme provides subsidy on interest, which makes loan repayment easier. But this does not mean that you will get any debt forgiveness.

Among the various reasons for nonpayment of a home loan, the borrower's death is the most common cause. The common question for every home loan borrower is what will happen to their home in case of their death. Will it force his family to vacate the house as the bank immediately takes over the property? Or, will all the installments of his home loan go in vain upon his death?

Well, before taking this topic further, let us explore the different categories of loans and the provision of loan repayment in each case.

1) Joint Loan - This type of home loan is taken jointly by two borrowers. If the primary borrower dies, the right to repay the home loan is given to another borrower. However, if the surviving co-applicant refuses to repay the loan balance, the lending bank may seek legal recourse in the civil court or the Debt Recovery Tribunal.

2) Secured loan- A secured loan is one in which the borrower pledges certain assets in case of failure to repay the loan. If the borrower of the secured loan dies, his / her spouse or heir will have to inform the bank about the same by presenting the death certificate.

In this case, the bank cannot take any coercive measures to force the surviving spouse or heir to repay the debt. In addition, for the recovery or enforcement of security, it must comply with the law.

3) Unsecured loan- In this case, the lending bank cannot claim unpaid loan from the surviving borrower or heir of the deceased borrower. However if the deceased borrower has left any property in the name of his partner or heir, the creditor can recover the outstanding amount by selling them after initiating appropriate legal action.

We conclude that things do not change much by the borrower's death. The loan still exists and has to be repaid by a co-partner, spouse or legal heir. The family of the deceased borrower can handle the mortgage in several ways. Here, we have mentioned some simple tips in this regard.

Tips 1- Repay the loan as per your convenience

The survivors can inform the bank about the demise of the borrower and continue to repay the loan. It can be difficult to arrange money. But in that case, you should inform the bank about your current financial situation. Most lenders are supportive of their customers and will provide them with suitable suggestions for repaying the mortgage.

Tips 2- Repayment and Refinance

The legal heirs of the deceased borrower can refinance the loan or they can repay the loan in full.

Tip 3- Sell or rent a house

If the spouse or heir has no regular source of income to repay the loan, they can resell or rent the home. Money received in this way can be used to repay the loan.

Tip 4- allow the bank to occupy the property

The survivor may allow the bank to recover the loan by selling the house at auction. If the immovable property is more than the debt owed on it, the difference from the sale proceeds will be transferred to the heirs.

How to Increasing demand for commercial property in India...?

The real estate sector has been a major contributor to the growth of the entire economy and is expected to contribute in approximately 13% of the country's GDP over the next 5 years. If we talk about improving the business environment, then the commercial real estate sector can be considered a major beneficiary. The sector has been promoted with government initiatives such as RERA and GST, which allowed large institutional investors to make large investments in commercial property in India, thereby improving the overall business conditions of the country.

The continued expansion of the service sector has led to the increasing demand for office spaces and thus can be considered as one of the major growth factors of the commercial real estate segment. It is estimated that the average demand for office space across India will increase to 46 million square feet by 2021.

Policy reforms such as REITs (Real Estate Investment Trusts) will further promote the development of the commercial real estate sector by reducing the burden of capital costs of projects financed on real estate developers.

Increasing FDI in the e-commerce markets has fueled the growth of the warehousing and logistics sector and further increased the demand for commercial space benefiting the commercial property sector in India.

The retail space is also expected to witness strong growth in the coming years and is expected to grow at a rate of 25% to 30% in the next financial year. Finance Minister Sitharaman's Budget 2020 has also brought some good news for the commercial real estate sector. Establishment of new smart cities, development of around 100 new airports across the country, formulation of national logistics policy, announcement of National Infrastructure Pipeline will likely increase the demand for commercial real estate sector especially office segment.

Trends in Real Estate Market in Chennai 2020

As understood by recent reports, despite the decline in the economy in 2019, the real estate market exhibited signs of strength with continued growth in India. In the previous year, the trend remained as follows:

There was a short-term decline in real estate rates or held steady. Well, come to the types of construction, more than 60 percent belonged to budgeted areas.

In the current scenario, in 2020, according to experts, the real estate sector is expected to have an unprecedented growth. And there was a more than 8% jump in housing sales in Chennai, especially South Chennai, where the total number of new launches was consistently at a high.

In an attempt to shed light on what to expect from Chennai's real estate segment, here are some trends to look forward to in the ongoing trends:

Events in North Chennai

With the eagerness for the benefits of end users, the real estate segment of Chennai city is growing by leaps and bounds with a lot of industrial expansion especially in the northern part of the city. From North Chennai, one is just away to reach the port. This is a major reason, there has been a lot of industrial development in the northern part of Chennai and serves as the hub of business activities.

North Chennai also has a host of IT companies and ITES service solutions, promising to increase the real estate market value of North Chennai in 2020. In addition, there has been considerable development in terms of connectivity in the northern part of Chennai and a lot of infrastructural enhancements which serve as the reasons for the growth of real estate as a whole.

Dreams come true! Welcome homeowners

According to the news, many renters living in Chennai are set to acquire their own property in the city in the year 2020. The two main reasons for this change are both the real estate market rates and the fall in home loan rates.

Which are especially beneficial for the middle class population?

Outside real estate builders, it's your turn to attract candidates with exciting offers!

It should also be noted that no GST has been imposed on ready-to-move houses which adds to the reason for purchasing new houses.

Balancing the residential and commercial sector

With significant traction in commercial building locations, as the city has many IT and ITES companies, which holds great potential for the commercial real estate sector. There is substantial urbanization and people are eyeing white-collar jobs, which takes the commercial sector to great heights. This will naturally increase the demand for the residential sector which brings balance between the two.

Support green living concept

Green technology is largely received by potential home buyers as well as real estate developers. In 2020, this trend is promising to continue with the potential for substantial growth in terms of technological progress. It involves the purchase of raw materials, creating a sustainable design that is robust despite changes in environmental conditions. And there are those who are opting for smart homes, which not only add to the comfort of living space, but also provide permanent living conditions.

How GST Impact on Real Estate?

Under GST, the treatment of rent is very clear. Landlords who are earning rental income by giving their properties for residential use will not be taxed under GST - thus there will be no GST on rent for houses. However, the GST rate on commercial property rent will be 18%, and it will be levied only by those who are earning more than Rs 20 lakh annually. If the landlord is unregistered due to the threshold limit, the taxable person has to pay GST on rent under reverse charge - at standard GST rate on commercial rent.

Goods and Service Tax impact on home loans

GST impact on the loan taker

Before evaluating the potential impact of GST on home loan EMI and costs, let us understand the components that are bound to be affected under GST. The main cost of taking a home loan is the interest payment on the principal amount. Similarly, any stamp duty levied in respect of documentation of home loan will also not change with GST, as stamp duty is not levied under GST.

GST impact on lender

Lender - In other words, banks and financial institutions that extend loans for real estate will receive ITC in relation to the services received. Also, purchased goods, which they can use against their GST output tax liability, which is good news.

Reduction in black money in the era of GST

GST will help cut down on the cash component in construction, as input will now have to be obtained from registered vendors to get the input tax credit. This would go a long way to reduce the black money component in real estate. In addition, the GST return process will ensure that both the supplier and the recipient of the goods and / or services are liable to disclose transaction details. Price, amount, GST rate etc.

FDI increase under GST

Investments coming from foreign shores are likely to have a positive GST effect - benefiting the NRI community, mainly due to a seamless-inclusive channel. Simplification of taxation is possibly the most positive GST effect on investment, which will also increase the confidence of the NRI market to invest in Indian real estate.

GST applicability on FSI / TDR

Floor Space Index (FSI) / Transfer of Development Rights (TDR) - Used by developers, are rights in land. As per GST law, not all immovable properties are excluded from the purview of GST, such as sale of land. There is a lack of clarity on whether FSI / TDR sales are to be considered "part of the land" - if they are, they too will stand out from the GST; If not, GST will be applicable.

GST on intellectual property rights

The GST law provides for the taxing of the supply of goods or services, or between both the concerned persons or different persons, without consideration. Typically in the real estate sector, multiple entities in the same group use single logos / trademarks without consideration, which can take advantage of GST, while no tax was previously applicable.

GST on barter Transactions

Many barter transactions are seen in the real estate industry. For example, giving free flats in exchange for 'development rights'. In the previous regime, barter transactions were mostly exempted from VAT, as a 'price' was not included. However, under GST law, all types of supplies such as barter, exchange, and so on, and the value of supplies will be taxed according to GST rules.

Buying a Commercial Property That Guarantee Success and Prosperity

The real estate market in India has grown by leaps and bounds since the implementation of RERA, Smart City Mission and Start-up India Mission. These schemes created high demand for commercial establishments. As the Indian population is growing rapidly, the demand for commercial real estate will never decrease. Therefore, investing in commercial properties can help you achieve a higher return on investment. Okay, investing in a commercial real estate can be a bit scary because you need to invest more money. But with a few simple tips in mind, you can invest in a property that will help you emerge successfully.

1. Research the market

Before investing in real estate, you need to pay attention to market trends. Also find out what kind of qualities are in high demand. Before deciding on what to buy, you need to analyze the scope of future development in the regions.

Buying a property in a developing area is much better than buying a property in a well-established location. The former choice is cheaper and it gives you a higher return on investment.

2. Consult a financial expert

When you have no prior experience in this area, it can be difficult to estimate the exact cost of purchasing a commercial actual. Therefore, before purchasing a property, you should consult a financial advisor and plan your budget accordingly. Tax implications can be complex to analyze in a real estate transaction.

3. Analyze your financial situation

Before investing in a commercial establishment, you should analyze your financial situation. Make sure you will be comfortable paying its EMI, even if there is no rental income from the property. Also, before purchasing a property, you should analyze the scope of income from it. In addition, you should also calculate the risks involved in the entire business.

4. Plan your layout well

Whether you are building an office space, shop, mall, or simply renovating it, the layout has a big impact on operational efficiency. This will directly affect your scope of making money by rent or reseller. Therefore, you should prepare a smart plan to refurbish or design the property. Seek the help of an architect if needed.

5. Choose the right builder

You should always buy a commercial property from a reputable builder. Therefore, does a background check of the builder and take a review from those who have purchased the property from the builder. Also, make sure the builder is specialized in the field. The history of a builder should also be considered in the context of the completion of the project.

During Financial Crisis How To Manage EMI Payments?

Unlike our ancestors, who worked hard for years to buy their home are open to the idea of ​​purchasing their property for home loans. There is no doubt about taking home loans due to government policies. But at the same time, motivating oneself has made the youth tense and fearful about the unexpected future. Out of all the loans a person takes for a lifetime, the home loan is the most difficult to repay. A normal home loan is taken for a period of 5 to 30 years. EMIs are easier to manage when a home receives some rental income, but this is not the case with self-used property.

Well, we have never seen the future. But at least we can be ready to face it. In this writing, we have shared some great tips to help you manage the payment of EMI during financial stress.

1) Don't Overload Yourself - If you have invested in multiple properties, and repaying a home loan is a difficult task that makes you feel stressed, and then take action on time. Instead of living a stressful life, you should consider getting rid of the burden. These days, you can easily sell a property, even if it is under debt obligation. Alternatively, you can rent it to a suitable tenant or real estate company. By renting property or renting it to a person or business organization for a long period, you can earn a regular income that can be used to pay off debt.

2) Speak to the bank at the right time - Whenever you feel inability to repay a home loan, do not hide the truth from the bank by avoiding its message or call. Rather, you should be transparent about your position to the bank. In general, banks try to support their customers in adverse circumstances.

3) Maintain a contingency fund- To face the effects of adversity such as job loss or economic downturn; you should maintain expenses for about 6 months as a contingency fund. Due to low interest rates in savings accounts, you can keep this money in fixed deposits.

4) Get insurance - Does not come with a life guarantee card. In certain situations such as job loss, economic downturn or death, loan installments may not be paid on time. Failure to pay a home loan can lead to a situation when the house or its collateral will be confiscated. To prevent such situations in unexpected future, you should get home loan insurance.

5) Make quick payments - In some situations, it can be difficult to repay the EMI of a home loan. But reducing EMI payments every month will increase the outstanding principal amount. If possible, try to make a quick repayment of the principal amount as it will reduce the financial burden. Remember that repaying home loan should be your priority over other expenses.