Myths Vs Truth about buying a home in India
Most of us will reach a point in our lives when we take the plunge and decide to buy a home for ourselves. When you reach this point, you will need to do a thorough research about the process of home buying and all that it entails. Here, we have listed a few facts and have tried to differentiate them from the myths about home buying process in India. We have shared this as we believe that buying a home is an important process that needs to be well researched to avoid any chances of being duped.
Myth 1. All projects are covered under RERA
Truth: The Real Estate Regulation Act (RERA) came into force in India in the year 2016, and offers an immense relief to home buyers. It not ensures the regulation of real estate sales but also protects the rights of home buyers. However, one misconception about RERA is that all properties are protected under it. One needs to understand that RERA applies only to projects that are 500 square meters in area or more or have eight or more units. Moreover, to be RERA compliant, a builder has to be registered with the RERA board.
Myth 2: Renting a property is better than buying one
Truth:Truth: While the current millennial mindset may believe that renting is better than purchasing a home, as buying means being burdened by EMIs for the next 30 years, you need to consider that when you purchase a home, you become the owner of the property after the loans have been paid. It is yours for life. This is a huge advantage, especially when you retire. Moreover, while renting a property may appear affordable at first, but it will not have the return on investment and even if one is planning to purchase the property in the future, it is not necessary that the salary increment will match the hike in the rate of inflation. We believe that purchasing a home is a smart choice – given that one gets tax exemptions, and property prices appreciate. Moreover, nothing beats the feeling of owing your home, which is better than renting out.
Myth 3: Tier 1 cities are preferable for investment in real estate
Truth: While a few years ago, people believed in investing in real estate in the metro towns as it had greater in terms of assured rental income and higher appreciation, the trend shows that it is better to invest in tier-II and tier-III cities as it is a more futuristic decision. Tier II and III cities have comparatively good better to grow, thereby ensuring good ROI in the future. Also, with the government's plans to turn more tier II and III towns into smart cities, the value of the place will go up in future.
Myth 4: Under-construction homes are cheaper than ready-to-move-in projects
Truth: Many people who have bought under construction properties will vouch that it was not the best decision of their lives, given that their deliveries were delayed and their money got stuck. Therefore, in the present climate, it appears that under construction projects are not the best bet. There is always an element of risk attached to such projects as one would never know when the delivery may be completed. Moreover, there are chances that the builder may not meet their promises, leaving you disappointed and feeling cheated. The case with ready-to-move-in properties is that what you see is what you get. Additionally, ready-to-move-in properties don’t attract any GST, making them more attractive and affordable.
Myth 5: Subvention schemes will help in cost reduction
Truth: To tempt buyers to invest in under construction projects, property developers come up with innovative schemes. Subvention schemes are a deceptive way to attract and tempt buyers. It is just a strategy to lure more home buyers by saying that the buyer does not have to pay EMI till they take possession of the flat. However, not everything is what it is made out to be. Subvention schemes tie you to the project for a longer time and there is no reduction in the overall EMI that you pay to the banks. Initially, it may appear like a solution to all your money woes, but will result in providing lesser discounts than the usual construction-linked or down payment plans.