This festive season focus on Investing rather than Buying
It’s all or no buying for us. Name a season and almost everyone in India follows the same code. No rationale or reason, because it’s just the season! People consider it auspicious to buy on Diwali and Dhanteras. They believe that buying real estate or gold means invoking the blessings of Lakshmi – the Goddess of wealth. ‘Dhanteras’ means wealth and it is the season to simply bring wealth into our homes by purchasing gold, real estate or anything that you think the house needs.
But hold it! Are we saying ‘buy’ instead of ‘Invest’ in Gold and Real Estate. Yes. Investing is an analysed, prudent, well-thought initiative that does not swing in and out based on seasons or sentiments. For example; buying a home is an investment. You invest based on your need or a financial goal. It is definitely a big bet that will cost a sizeable amount of your earnings in the coming years unless, you have some income stashed away to buy a home completely from your savings.
Real Estate: So what is the ideal deal? What can one do with all the freebies that come with the festive season. Real estate sellers are also wary of the sentiments during the season and do their best to ride the wave. The discounts that come as Pre-launch offers or Festive bonanza’s make you bite the bait. Well it’s no crime to check them out or buy if they sound like the deal you’ve been looking for. But should you be on guard when it comes to booking a home under a Festive offer? Yes.
Freebies for booking during the festive season can have real estate seller’s throw away two-wheelers, Air conditioners, cars and even a world –trip. But that isn’t our goal here. When you can buy a home, why not a two or four wheeler? So before you say ‘yes’…….
Get it appraised professionally: Most of the time these festive deals are just an eye-wash. The price of the freebie is included in the price of the home and sometimes, the real estate seller makes a margin on that too. So seek a professional appraiser to see if you are paying a fair price and the property is in par with the price of other properties in that area or locality. The professional appraiser will also make an inspection on the amenities and documents and give you a detailed report on the worth of the property. After this, if you still find the property attractive with the freebie, go for it!
Do a background check: Before you book the property, do a background check on the builder. Survey or take a look at the properties done by him before, and the present condition of those buildings. Check on the number of properties that are ‘under- construction’ and the time they have been so. Customers and client feedback about completed projects also stand testimony to the builder’s credibility. Honestly and truly introspect to see if you can give the builder a clean-chit.
Mind the Maintenance: If the building is heavy on maintenance that also forms a part of your total outgoing expense for the home along with the EMI every month. Understand that part clearly and completely from the builder.
While there are a number of things that you must verify before you book a property, it is wise to book the property during the festive season only if you have completed all the initial exercises required before you decide on the property.
Arjun has been looking for a 3 BHK flat at the Electronic City in Bangalore. He has been doing a lot of home-work on the probable ones that might fit his budget. Finally, after a lot of verification and vetting he froze on two properties. Both were equally good and he was trying his luck at getting a discount with the builders. Picking anyone of the two will have him neatly manage his margin money and the EMI for the following years. This festive season one builder on his list offered a 3% discount on the overall price of the property and was willing to issue a letter with the revised price.
Arjun jumped at the offer. He would save INR 135000/- on the approximately 45,00,000/- property. Buying real estate for a festive freebie is good only when all the homework for the same is done and dusted and you are just waiting for it to come at the right price.
Gold: Buying Gold during the festive season is also a good thing to do, just be clear that jewellery isn’t an investment because the money you lose as making charges and wastage are irrecoverable. Buying Gold as coins or as ETFs is a good thing to do.
Consumer durables: Here’s everyone’s favorite. True. Sellers and Consumers benefit during the festive season on Consumer durables. The festive rush has the sellers benefit from the economies of scale and the buyers benefit from the resultant discount. All of this, backed by a sentiments driven demand create a need for seller’s to flood the market with goods. The increased competition among sellers to make a killing during the festive season has scream out attractive discounts and offers which ultimately benefit the buyer’s purse.
Dhanteras and Diwali are a great time to buy the things you have been wanting for a long time. Just be sure that you pay a fair price or a price that you may not get during any other season. Buying or Investing for auspiciousness does have a price!