Investment Roadmap for Millennial Homebuyers
Vimesh P, Vice President of Marketing, CASAGRAND shares his opinion on what constitutes a better and safer investment for millennial homebuyers.
The widespread pandemic has generated a tremendous impact in diverse sectors of our country where residential real estate is one amongst those which has undergone robust changes in terms of its approach and strategies. Even though the prevailing pandemic has created a lot of uncertainty in the market, the thriving passion of home-ownership continued to prevail amongst Indian homebuyers, where millennials buying their first home emerged as prominent home-buyers in the market. While research shows, a significant number of millennials investing in real estate have at least one regret about purchasing their first home, owing to the lack of experience and proper guidance, here are a few tips that will direct millennials to well plan their real estate investments.
Plan Your Finances – Millennials are undoubtedly one of the highest-paid people worldwide and are despairing to invest their money in resources that are profitable in the future. The latchkey to succeed in anything is to have a well-devised plan, likewise, millennials must carve out a well-organized plan of their finances for assisting investment. Key facts that millennials should consider before they make their investments;
Tangible Investment – We often hear that we must make our money work for us. While investing in any kind of commodities has its charm, nevertheless it comes with a wagon of risks too. It is necessary to look for commodities that offer a sense of safety and long-term financial security, grants tangible returns, and better appreciation values.
Investing in Real Estate – Investing in real estate is simply an exceptional approach to put your money at work now and allow it to multiply in the future. For first-time home buyers like millennials, it can be as uncomplicated as playing monopoly once they get the fundamentals of strategic investment. Reckon that, unlike other sectors, investing in real estate can be a perpetual benefit, as the value of the property will progress steadily as and when there is a shift in the market, offers substantial savings on income tax, offers high rental yields, and undoubtedly, with the strict implementations of RERA and other policies, real estate investments have become safer and secure compared to any other investments options in the country.
Know Your Benefits
The best way to achieve wealth and financial freedom is to invest in real estate. Millennials who fancy investing in the real estate sector are often first-time home buyers and are mostly unaware of certain privileges that they can avail themselves of from the builders in conjunction with the government. From the exemption in tax to availing other privileges, the millennials can cut down a lot of expenses while buying their dream house. A few of which are:
Tax Privileges: First-time homebuyers are generally unaware of the available tax benefits that are being offered to them. To assist the dream of every first time homebuyer in the country, the government of India has aided with various tax benefits on home loan principal and stamp duty, benefits on home loan interest rates, and more up to Rs 5 lakh per annum under Section 80C, Section 24 and Section 80EEA of Income Tax Act. Besides this, there are few other tax benefits offered to homebuyers like, according to section 54 of the Income Tax Act, any individual who acquires an added residential place within a specified timeline, then the money invested in the new house can be deducted from taxable capital gain. Furthermore, even in this case, when the home buyers acquire the property jointly with another individual, each individual can diminish their expenses from taxable capital gain independently. Hence homebuyers must analyze the various tax benefits that are offered to them.
No GST: While the millennials invest in real estate, they need to stay aware of the GST policies which the government and the industry have imposed for home buyers. The government of India has declared no GST on properties that are under construction or ready to move-in homes, where the completion certificate of the property had not been issued during the time of its sale. Therefore the millennials have a bingo opportunity to buy property at a low cost.
Home Loan Subsidies: First-time homebuyers under the economically weaker section (EWS) category with an annual income of less than 3 lakh and low-income group with an annual income between 3-6 lakh can avail a maximum subsidy amount of Rs 2.67 lakh upon borrowing housing loan up to Rs 6 and 9lakhs respectively. For middle-income groups earning an annual income between 6 lakh-12 lakh (MIG1 Category) and 12 lakh-18 lakh (MIG2 Category) can avail up to 2.3 lakh and Rs 2.35 lakh respectively upon borrowing housing loans up to Rs 12 lakh.
Before Buying A Property
Before you invest in a property, take a good survey of the neighbourhood and location. Ensure that the proximity of all necessary services such as – hospital, education centre, shopping centre, and other essential services is convenient from your home, as it is ideal and recommended
While you step up to put forward your lifetime investment, it is essential to analyze the credibility and track record of the builder. Identify builders who are members of reputed builders or construction associations. A reliable developer will have necessary permits and sanctions from authorities, like approved layouts, no-objection certificates from varied government departments, etc. Hence it is necessary to check if the documents are true, authorized, and original. It is fundamental to check if the developer is ISO certified, has liability insurance, and it is very important to check the developers’ financial records. Though technological developments are making life easier, yet it is crucial to visit the property, interact with the people in the surroundings to understand the builder’s track record, etc.
As a millennial, there are a few key features that have to be taken into account like, conveniently spaced portion constructed with zero dead space, exceptional architecture, and eccentric designing, which supplements superior comfort to the buyer when used. While privacy is one of the main concerns in architecture as it gives a sense of security in a physical space. Hence it is necessary to look for properties that offer complete internal privacy, where balconies and bedrooms overlook either the podiums or exterior, the property ensures proper grouping of rooms, and positioning of doors and windows offers a sensible division of space that makes the home both multipurpose and practical for use. Moreover, millennials must have to take into consideration of the built-up area of the property as it will come in handy for living at a later stage of life with superimposed members in the family.
When indoor conveniences have their traits and peculiarities, the exterior features of our property are no less important. Huge open space area, dedicated business center with all modern facilities to enable residents to comfortably work from home, uninterrupted access to high-speed Wi-Fi, and well-equipped fitness centers are some of the basic amenities that a millennial will majorly require. Besides this, dedicated spaces for entertainment like a clubhouse, multipurpose party hall, swimming pool, Movies Theater, open party lawns, outdoor seating areas, and barbeque counters will help host hassle-free social gatherings.