It is a general practice among buyers of real estate to avoid site visits or the purchase of a resale home during monsoons. In contrast, buyers can take advantage of this season to evaluate the location and construction quality and fix a favorable deal.

In this season, the surrounding areas and the property put a very different picture in comparison to the remaining part of the year. Resultant, the would-be homebuyers get an opportunity to have a precious insight of the property they propose to buy. Here we shall detail some reasons that will support your idea to invest in the property during monsoons.

Infrastructure and amenities in the area

Real estate experts advise that home seekers should visit the construction site more than once, before making a final decision. Visiting a site in the monsoons when the traffic is at its worst, in most places, will provide insights on the waterlogging situation, as well as travel and access to the area. Monsoons are an apt time for buyers to go house hunting in a country like India and assess the condition of the building and the area around it. During monsoons, getting transportation from your home to the nearest railway station or bus depot is a nightmare in cities and this aspect cannot be overlooked during such site visits.

Construction quality

Monsoon is the best period to check the overall quality of construction of a house. Issues like seepage in the ceiling and near the washrooms are quite common during rains. Heavy rain will reveal the construction flaws, like seepages/leakages, quality of plumbing and drainage, waterlogging, traffic in the neighborhood, etc. It is thus, the best period to visit the site and should not be avoided.

While ascertaining construction quality may not always be possible in an under-construction property, the rainy season is the perfect time to check the quality of a resale house One of the factors to be considered, while finalizing a top-floor flat is the possibility of leakage issues. This is particularly important in a resale property. Go ahead with the deal, only when one is assured that the flat could withstand the elements of nature. The monsoon actually puts any building, even if it is from a reputed builder with a high quality of construction to the test.

Best time to negotiate

Issues like leakages during the monsoons can also be used by buyers to make the deal work in their favor. If a buyer likes a particular property that has an issue of water-logging in and around the building or a leakage problem, then, the prospective buyer has a chance to bargain further and get a fairly good deal and get it solved. This may not be possible in dry weather conditions.

Raining discounts

As the demand for properties tends to dip in the monsoon season, it is an ideal time for discounts. The monsoon is generally regarded as a lean period for the realty sector. However, it is a good time for home buyers, especially for those looking at resalable properties. This is the time when demand is less and sellers are willing to negotiate on lowering the price for the serious buyer. Moreover, with people preferring to invest in real estate during the festival season, which begins in September-October, builders offer attractive discounts around monsoon to boost their sales for that quarter.

Advantages of selecting a property in the monsoons:

• Buyers can gauge whether the property has problems pertaining to seepage, leakage from the terrace, drainage issues leading to stagnation of dirty water, etc.
• For a resale home, a final inspection in this season can reveal construction quality and how the house has been maintained.
• Low-lying areas are prone to flooding, leading to traffic jams and transportation woes. The extent of this problem can be best judged in the monsoon season.
• In cases, where flaws in the project become evident during the rainy season, buyers can bargain and also ask the developer to mend the same.
• As it is a lean period, vis-à-vis sales, sellers may be willing to negotiate on the price.

Non-resident Indians or NRI’s as they are popularly known as have contributed a lot to Indian Economy with their investments and remittances. To maintain their connections and bonding with their native place, they have generously invested their savings in Real-Estate sector.

Apart from investing in property for self, many of them have bought apartments and villas either for their parents or near relatives. NRI’s have also made use of Home financing options for obtaining a property in India. The government viewing the growing trend among NRI’s to invest in Real Estate sector have made some regulations. The main purpose of these regulations is to firstly save them from any cheating, to ensure that the money coming to the country for the purpose is through neat and clean channel and NRI’s can avail the facility of home financing without hassles.

Home financing options for NRI buyers

Besides regulations for the type of properties that NRIs can purchase in India, legal provisions also exist on the mode through which these purchases can be financed

When a non-resident Indian (NRI) opts to purchase a property in India, there are several regulations that govern how such a purchase can be financed.

Sources, for financing a real estate investment in India

The money for purchasing a property in India, has to come through banking channels only. Consequently, the payment cannot be tendered in the form of traveller’s cheque or foreign currency. An NRI can also use the money in his/her credit, in non-resident external (NRE) rupee or non-resident ordinary (NRO) or foreign currency non-resident (FCNR) account, maintained in India.

NRIs are allowed to purchase property in India, by availing home loans in Indian rupees, from banks or housing finance companies. The home loan can also be granted by the Indian employer of the NRI employee, for the purpose of financing of the property.

Obtaining a home loan

As NRI investment in Indian real estate is only allowed in residential or commercial properties, banks too, can finance only these properties. Almost all banks offer home loans to NRIs for buying a house or constructing one. One can also get a loan, for purchase of land (non-agricultural), for constructing a house in India.

The application for the home loan can be made online, as well as offline. The nature of documents that need to be submitted, will depend on whether the NRI is a salaried employee or whether s/he is self-employed. It will also vary, depending on the NRI’s country of residence. Nevertheless, copies of one’s passport and visa, passport-sized photographs and proof of residence in the foreign county, will be required in all cases.

Depending on whether the NRI is salaried or self-employed, s/he also has to fulfil a minimum period of stay in the country of present residence, to avail of the home loan. Banks may also insist on an acceptable co-applicant, or an NRI guarantor. The NRI guarantor too, has to submit documents pertaining to identity proof, address proof and income proof.

Servicing the home loan

EMIs on the home loan can be paid through remittances from outside India, through a proper banking channel, or by debiting the NRE, or NRO, or FCNR account. In case the property is let-out, the rental yields can be used for servicing the NRI home loan. Money transferred to the NRO account from close relatives, can also be used for servicing the home loans. In case the property is purchased for self-occupancy, the NRI can avail of a loan against the FCNR or NRE account deposits, of up to Rs 1 crore, for servicing the home loan.

Remittances out of India

An NRI is allowed to repatriate some of the funds, in case the property so acquired is sold.  However, the number of properties (whether purchased or inherited), for which s/he can remit or send money to India, is restricted to two. Moreover, the amount that can be repatriated cannot exceed the amount (denominated in foreign currency) received as remittances from outside India, either for purchase or servicing of the NRI home loan. Under normal circumstances, an NRI is allowed to remit an amount of USD 1 million in a year, out of India, from his NRE, NRO, or FCNR accounts, which includes the amount remitted for sale of a house.

A few days back, Central Government benefitted its employees by accepting the recommendations of 7^th. Pay commission. The government gave a generous rise of around 25 % of the current pay structure of its employees and retirees. The recommendations of the commission will come into force from 1^st. of January 2016 and accordingly, the arrears of proposed hike will be given from this date. The payment of arrears is expected to be disbursed before beginning of festive season i.e. by the months of September-October 2016. A sum of around Rs. 1.02 lakh crores will be disbursed among one crore employees and retirees of the central government.

The employees will get a substantial amount as arrear payments and with such fat disbursements, they would go for some suitable investment opportunity. There are many investment options such as Bullion, Share market, Bank Deposit and Real estate etc. are available with them and amongst these options, Real Estate is the first choice of investment for government employees, after the hike announced in the 7th Pay Commission.

Real Estate has emerged as the first choice for investment, among serving government employees, as well as those who have already retired, with close to half of the employees in 20 cities of India, preferring to invest in real estate, following the 7th Pay Commission’s salary hike. As many as 44% of government employees across the country, wish to invest the entire salary gains into the Real Estate market. These are the findings of an exhaustive survey on consumer behavior patterns of government employees.

The major findings of the survey are:

44% of the government employees would invest the benefits of the 7th Pay Commission into the real estate.

34% of the respondents would invest in financial schemes for retirement gains; 12% to save money for education and marriage of children; and 10% would opt to upgrade their lifestyle.

Contrary to the general perception that youngsters drive the property market, officials who are close to retirement, are more inclined to invest in property (as many as 78%).

Metro cities with expats to attract more government officials (68%) into the property market.

Peripheral locations and emerging markets are likely to attract more government officials (68%) in Real estate sector.

Lack of affordable housing and the possibility of inflation, are the major deterrents for investing in real estate.

 Preferred locations

The study found that the main city areas are likely to benefit less, as compared to the outskirts, owing to affordability, the urge for a relaxed lifestyle amidst open spaces and appreciation potential. With retirement in mind, as many as 74% of those who are investing in the property market, prefer emerging locations rather than established markets. Even those who have retired, prefer these locations, with a majority of them are already living in such regions.

The quest for Real Estate is more among the older generation, compared to young buyers. While one-fourths of the young generation (as many as 22%), wish to upgrade their lifestyle first and then diversify their portfolios, 78% of those above the age of 45 years wish to invest in the property market. A majority of the employees in the survey were closer to retirement and only a small set was below 30 years of age.

Investment options and concerns

While real estate emerged as the first choice of investment, 34% of the respondents said they would invest in financial schemes with fixed returns, post retirement. Education and marriage of children came next, with 12% saving the 7th Pay Commission’s benefits for it and the remaining 10% said they would like to upgrade their lifestyle. The survey noted that nearly all of the respondents wish to avoid speculation, even with their investment in the property market.

As many as 74% of those planning to invest in property, did not have a house of their own, while 22% said they would be investing in a second property for rental income. Only 4% said they would invest in a weekend home.

Less than one-third of the respondents (30%), felt that the 7th Pay Commission’s benefits would improve consumer sentiment. The biggest deterrent to investing in the property market was the absence of affordable housing options (55%), while 45% were apprehensive that inflation would eat up the benefits.

The survey demography was a carefully chosen mix of government employees across the hierarchy. The survey was carried out in Delhi, Noida, Gurugram, Ghaziabad, Mumbai, Pune, Nagpur, Nasik, Ahmedabad, Bangalore, Chennai, Hyderabad, Coimbatore, Kochi, Kolkata, Bhubaneswar, Jaipur, Bhopal, Lucknow and Patna.

Among the many customer- friendly features of Real Estate Bill (Act), one is the abolition of Super Built up area. Now buyer has to pay only for carpet area which as defined under the Act is:

Carpet Area is the net usable floor area of an apartment excluding the area covered by the external walls, areas under services shafts, exclusive balcony or verandah area, and exclusive open terrace area, but includes the are covered by the internal partition walls of the apartment.

Though implementation of this definition will result in an escalation of per square feet cost of the apartment but the buyer will have the satisfaction that he has paid for the actual area under his possession, not for the superfluous area which he intends to use rarely. In market parlance,

Super Built Area is the built up are plus proportionate area of common areas such as the lobby, lifts, shafts, stairs etc. Sometimes it may also include the common areas such as swimming pool, garden, club houses etc.

Generally, CARPET AREA is around (70 to 80)% of SUPER BUILT UP AREA. But note that this percentage varies from project to project and builder to builder. Payment is made on “SUPER BUILT UP AREA”.
Prior to this act, Super Built Area was calculated in the manner given below:
If CARPET AREA is 600 sq ft. What would be SUPER BUILT UP AREA?
Let’s assume the ratio is 75:25.
Means CARPET AREA is 75% of SUPER BUILT UP AREA.

SUPER BUILT UP AREA = 600 + 25% of 600 = 600 + 150 = 750 SQ FT

So the payment will be made for 750 sq ft, not 600 sq ft.

Thus the buyer had to make an additional payment of 150 sq ft
Any violation in this regard will entitle the buyer to file a complaint against the builder before Real estate regulatory Authority having its bench in every state of India .

Apart from clarification on Super Build up Area in Apartments, Real Estate Regulatory Act has come up with many measures which will strengthen the buyer’s faith in Realty sector in coming days.