'Be clear on what kind of lifestyle you want...'

E Jayashree Kurup is a business journalist and an expert on real estate, city management and information technology. She recently released her book How to buy a house that explains the nuances of home buying — financial elements, legal terms, choosing the right developer, Return on Investment (ROI) and capital gains. In a chat with Deccan Herald, she sheds light on some vital parameters.

Bengaluru has emerged as the top real estate investment sector in India. Your thoughts...

Bengaluru has strong economic drivers. IT has been a traditional strength and its product development too has been strong. In addition, the spate of start-ups in the city has made it an attractive investment destination for property buyers. Our research shows that more than half the property available in the market is in the Rs 30 to 60 lakh category. Even though there is a lot of luxury supply, the developers have been building for every segment of the market, which is why this market remained active even when large real estate markets like Delhi and Mumbai crumbled under the weak buyer sentiment in recent years.

Is it prudent to buy a home online?

Online property portals have brought a level of transparency to the real estate markets that did not exist earlier. It allows the consumers to search from a larger database than if they went to local brokers. It allows them to search, compare on the basis of features, localities, price and amenities. As a result, I would say it is very reliable. However, it is important that the consumer actually do a physical verification before buying.

What’s the rationale behind your mantra ‘Buyer Serve Thyself’?

Every person’s preferences in real estate are unique. It has a huge emotional quotient to it. This selection is based on lifestyle, proximity to workplace, family, friends and amenities that match their lifestyle. As a result, for that best case buy, it is imperative that the consumer search for the property based on the features that best match their requirements. Also, since this is such a high ticket investment, it is important to use the information that is available online and offline to make an informed choice.

What are the things to consider before buying a home?

Firstly, look at whether you need to buy a home and why. Sometimes, you want to stay in a certain locality but cannot afford to buy there. In that case, it would be better to lease the house you stay in and buy further away near the fringes, where the values are less. Location is of prime importance. Then look at what you can afford. The monthly outflow as Equated Monthly Installments (EMI) should not be more than 30-40 per cent of you family income. Otherwise, your lifestyle will be compromised. It is important to look for a builder with a good track record of delivering quality products on time. Look for only those amenities that you use or you will end up paying for a golf course even though you do not know how to handle a club.

What are the most common mistakes home buyers make?

 They follow the advice of random people like friends, family and so on, who may not know enough to advise them. They also go for unknown developers with no idea of whether the developer is capable of delivering quality products. This is normally to save a few lakhs in the beginning but ends up as a costly mistake.

 They go for facilities they may never use in their life and end up paying hefty monthly charges.

 They do not check out the quality of neighbourhoods. Sometimes, just a bad neighbour can cost you your peace of mind.

 They do not check on the legality of the titles and complete their paperwork. Since you are spending so much on buying a property, it is wise to spend a few thousands to get the titles and legal documents checked.

 They buy very far outside the city and find that their travel cost and commute time becomes a pain point.

Is there a right time to buy or sell a home?

The best time to buy or sell is when you need to do so. However, as a rule of thumb, don’t sell when the markets are at their lowest or buy when the markets are at their highest values, unless you have a genuine need to do so at that time. Also, don’t defer the first buy for too long. Buying at early stages of life ensures that you have a longer period to pay back the money. Don’t overstretch also. Buy for today’s need. You can sell and buy bigger or better apartments when you need to do so.

Is renting a home more viable than buying one?

Having the security of your own home is important. Property buying has not much to do with inflation. If you have your own house, you don’t need that monthly outflow for life. Some people prefer to invest their money in equities and live in rented accommodation. That is actually a personal preference. However, having one home, I think is a sensible thing to do.

What’s the difference between a home for end-use vs investment purposes?

When you buy for end-use, the decision to buy is emotional. You buy near your workplace, in the type of neighbourhood you like to stay in, near your family and friends and near those facilities you are most likely to use again and again. When you buy as an investment, you buy in those localities that are early in development cycles, so you pay less to buy but benefit from future gains. You also look at the purchase more objectively.

Is it a good idea to buy a luxury home in the city peripherals?

Buying in peripheral areas gets you cheaper homes. However, they are normally at early stages of development and therefore, have weaker infrastructure. City areas are normally well serviced with transport, shopping, medical and educational facilities. Luxury essentially means quality. In some cases, it means larger spaces. Today, however, there are smaller luxury spaces that have high quality specifications.

These make up in common facilities such as clubhouses and swimming pools, sports and entertainment facilities etc. Essentially, it has to match your requirements and lifestyle with best in class features. You need to be clear on what lifestyle you are looking for, which part of the city you work in; live near your workplace because traffic situation is bad. Buy from good developers who deliver quality on time. Buy for today’s needs. Check out locality values and buy what is best priced.

What are the problem areas of the realty industry?

It mainly includes timely delivery, uniform specifications according to the promises and commitments made, quality on-site and off-site infrastructure and good social infrastructure such as schools, hospitals, retail and entertainments centres and good transport connectivity. Long-term asset maintenance is also important.