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Tuesday, January 27, 2015

Looking to construct your own house on a given piece of land? Pay attention to stages of construction and the cost part of it.

Planning to build your home on a piece of plot? What are the things that one needs to keep in mind before embarking on a year long journey of construction and dealing with multiple contractors, suppliers, etc? Surely, as an owner of the plot, you would have got multiple offers from architectural firms, contractors about the cost estimate. However, before even talking to these firms, one need to do his/her cost estimation.

Constructing one’s house is not easy because of the nature of the work. One needs to work/deal with professional firms such as architects, contractors and at the same time deal with labor. Therefore, you not only need to plan the stages of construction but also the costing part of it. Doing the cost analysis helps you in analyzing what you need to build and what you can postpone for future dates. For example, if your budget is limited, then in all likelihood, you may not go for modular kitchens, lavish bath fittings, etc.

Here we present the quick ‘to do’ list for you to arrive at a guesstimate of cost that you may incur during the construction of your dream house. This will help you in planning your construction stages as well as cost part of it.

Friday, January 23, 2015

List of Housing Finance Institutions of India

Owning a House is a dream for every household in the country. The new government has also set an ambitious target of ‘Housing for all’ by 2022, a challenging yet achievable task. To fulfill this objective, providing housing finance at affordable rates is paramount. Therefore housing finance companies will play an extremely important role in this noble endeavor.

Who are the major players in this area currently? Can the list be expanded given the enormity of task? Things will unfold as we move along.

There are 2 kinds of housing finance companies, one, which accepts public deposits, and the second kind do not accept public deposits. Housing finance companies are regulated and supervised by National Housing Bank. Housing finance companies offer loans for purchase of commercial and residential properties. Find below the detailed list of Housing finance companies in India:

Monday, January 19, 2015

Social Media-The Most Effective Marketing Tool For Real Estate Agents

Real estate is a business which depends greatly on personal contacts. But in order to succeed in the industry as a real estate agent, one needs to have a good presence on social networking sites like Facebook, Twitter, LinkedIn and Stumble Upon. Here are some points which you need to follow to find out why social sites are important for real estate agents:-

  • Realtor with a good presence on social media make a great number of connections 

As a real estate agent, you need to post the listings of your services on social media. If you are new to this profession, post about your services in the neighborhood, explain about the plus points of your services and how people can avail it. What are your prices? How do you charge your clients? What are the new offers that you intend to launch in coming weeks or months? Be as transparent as possible.

  • Promote social events which take place in your locality

Post social events that are taking place in the immediate neighborhood on social networking sites. This will make people living in other areas familiar about your upcoming seminars, info sessions, and networking opportunities.

  • Pictures and videos speak a hundred words

You can also share pictures and videos which tell stories. This is because most people, who use social networking sites prefer to go through stories that involve photo, video and audio content instead of text alone. There is no need to spend a huge sum on that either. Use your Smartphone in order to take pictures and short videos of clients and all the exciting things happening in your target areas. You can easily upload it to any other social networking site. At the same time, try to make sure that the posts, which you share on Facebook or Twitter, are not too generic or too promotional.

In case, you find something interesting about the realty sector in India such as useful data, price trends, government notifications, etc., then don’t hesitate to share it on these sites. It will help in building your brand within your locality. Your priority should be on creating posts which show your company’s verticals in an interesting manner. Keep a track of the people who are following your online social pages and find out how they are engaging with your page.

  • Pay special attention to increasing number of likes on social media pages

One of the key factors behind the success of your company’s website on social media is by delighting your clients on a regular basis. Create contests and encourage your clients to join a conversation for a chance to win gift cards. Delighted clients will share their experience with people who are close to them.

  • Judicious use of Facebook

Compared to other social networking sites, Facebook is one of the most suitable places for promoting Real estate services. Make sure that most of the content is dedicated to property news, trends, and anything that is of immense importance to your clients.  While the remaining content or posts can be about the services you are offering to them.

Guest Post by: Sheela Joby is a freelance writer with an experience of 10 yrs. Apart from writing, she is into photography, traveling, music etc.

Thursday, January 15, 2015

Why Is Real Estate Industry Said To Be a King of Investment??

Stocks, bonds, mutual funds, investments, and real estate - though the list seems to be endless and making a choice is still considered to be a Herculean task. Especially for a family with two children in school, with a career that has just started and it can be extremely crucial decision for them. Given below are some of the reasons as to why real estate industry is believed to be the king of investment.

  • Inflation Hedging: 

The relationship between real estate and GDP has grown on the basis of the ability of real estate asset class to foster with inflation hedging. In simple terms when the economies grow and expand, the demand for the real estate industry consequently increases along with the increase in rentals and that translates into higher capital land prices.

  • Retirement Income: 

The pressure on the current income that has to be spent on varied channels is high. Between the school fees, fuels, and marriage funds, almost each and every one’s saving account will continue to get thinner and thinner with time. Therefore, investment in real estate can be extremely useful for people in their retirement days.

  • The Positive Cash Flow: 

It is the real estate industry that generally gives you huge investment options wherein you could receive a guaranteed and tangible income throughout the year. This is what exactly a positive cash flow is.

  • Scope of appreciation: 

The real estate industry is generally considered to be one of the safest options in long term no matter what. Industry Experts in the realm of real estate industry agree that in a period of ten years the real estate industry has seen the highest scale of appreciation in comparison with any other class of investment.

  • The Tax Benefits: 

Real estate sector is one of the major contributors to the country’s GDP. And since the government wants to promote affordable housing and housing for all, the investments in the real estate is bound to give you tangible tax benefits of as much as INR 1, 00,000 in the upcoming year.

  • Leverage: 

Leverage here in simple terms or in terms of the real estate industry would mean the ability to use the borrowed capital in order to ensure a potential return on investment. Real estate industry is the only possibility among various investment classes that allow for leverage. For example by paying a minimum of 20% of the cost of property, you as the owner could control the income from the property. The remaining 80% can be availed from the bank in form of home loan.

  • Diversification in the investment portfolios: 

Having a diverse investment portfolio would only help you in diminishing the risks and increase the returns on investment. Assets which are not co – related to each other in the same portfolio would decrease risks.

This is a guest post by Ava Jacob who is working for a real estate project named bren imperia bangalore. The developer has more than 7 years of experience in large-scale real estate development involving construction of luxury apartments.

Monday, January 12, 2015

What is the impact of Interest (Repo) rates on Housing & Housing Prices Appreciation in various cities in India? Is there any direct relationship?

Ok, everyone including the real estate developers, builders’ apex bodies such as CREDAI, brokerage houses, and other related industries are shouting from the roof tops for interest rate cuts to revive the demand in realty sector. Every time there is a review of monetary policy by RBI, numerous articles in leading newspapers are published on how the rate cuts can boost demand and bring back fence sitting customers in investing in real estate in India. However, RBI has resisted such calls and instead has focused on bringing down the inflation. Now that, inflation has come down, can we expect rate cuts? Mr. Raghuram Rajan knows it best. Let’s leave it to him and his team at RBI.

But, let’s explore, is there any merit in the builder’s argument for reducing the interest rates? Will rate cuts boost demand?

For that, we need to examine the housing price appreciation in various cities across India and the impact of repo rates on housing price appreciation.

Let’s go one by one.

  • Appreciation in Housing prices across India

As can be seen from below graph, the pace of housing price appreciation has slowed down since 2010. What does it suggest? Well, it suggests, that demand has been falling gradually since 2010. End-users or investors are postponing their decision to invest in real estate. Assuming influx of new housing supply to be constant from 2010 to 2014.

  • Increase in repo rates

Repo rates have increased from 5% in March 2010 to 8% now. Repo rates are rates at which RBI (central bank) lends money to banks or housing finance companies.

  • Impact of increase in repo rates on housing price appreciation

This graph tells the whole story. As the repo rates started moving up from 2010 to 2014, the housing price appreciation started to come down. In 2010, most cities witnessed substantial appreciation in housing prices with Bangalore, Ahmadabad, Kolkata, Mumbai, and Chennai appreciated upwards of 30%. Whereas in 2014, the highest price appreciation was witnessed in Pune at mere 3.88%.

  • Conclusion

While rate cuts will certainly bring back customers to market and we may see improved activity in real estate investment. However, just like demand waned gradually from 2010 to 2014, similarly, demand will pick up gradually and we may see the full potential somewhere in 2017.

Friday, January 9, 2015

The fibre optic cable makes its way to Chennai

The fiber optic cable technology has made the improbable possible in the field of communication. Fiber optic cables will now provide access to a host of other essential services to all sections of the society by bringing costs down and making it more affordable. This technology works on fiber optic cables and optical electronic devices, which analyse data and allow seamless transmission. In terms of quality, this shift from conventional copper wire cables to optical fiber is a paradigm shift.

  • What is an optical fiber?

Optical fibers are thin, flexible strands of extruded glass or plastic, which are slightly thicker than human hair. They are used to transmit huge volumes of data from one point to another by utilizing the properties of light. They are essentially pipes that transmit light between both ends. The world is moving towards optical fiber communication for various reasons as they make it possible to transmit larger volumes of data across longer distances than conventional metal wires. They also ensure significantly less data loss and are immune to electromagnetic forces, which is a blessing for communication technology and mankind.

  • What are the benefits?

Fiber optics can make lives easier for the entire nation. In India, the introduction of optical fiber will make high-speed Internet access a reality. These cables can be safely placed next to the high voltage power transmission lines as they do not conduct electricity. They are also less likely to be stolen. Theft has been an issue across the country because copper wires used to provide the Internet access to homes and offices have a high resale value, making them an easy target for thieves. Optical fibers are also safer to use in areas prone to lightning strikes as they are poor conductors of electricity. They will essentially protect your computers and other electronic devices such as routers from damage.

  • Who is bringing FTTH to India?

The House of Hiranandani is among the first developers in the country to offer the optical fiber technology through their development projects. With advancements in technology, portable devices such as smart phones and laptops and a genuine demand for better Internet services, the developers have taken matters into their hands. They ensure that each home in various housing projects across the country has access to high-speed Internet. The beneficiaries of this service, the homeowners will have access to VoIP (Voice over IP) calling, IPTV (Internet Protocol Television) and streaming audio and video at blazing speeds. This optical fiber communication technology has been tested at OMR, a residential development in Chennai, by the House of Hiranandani. It is in the process of being scaled to projects in other parts of the country.

Fiber optic cable technology is paving the path towards a better future. Yes, there are other ways to provide homes with the Internet access, but these are not always cost-effective and as reliable as optical fibers. The technology will help the country surge forward.

This is a guest post by Deepak Yewale. To submit guest posts, write to us at

Tuesday, January 6, 2015

Master Plan 2021 Delhi - What are the opportunities and where shall I Invest in new zones?

The mushrooming of satellite towns such as Gurgaon, Faridabad, Noida, and Ghaziabad around Delhi in 80s and 90s virtually put a stop on new development in Delhi, the capital city of India. However, in 2003, the Ministry of urban development issued guidelines and activated the bureaucracy and think tank for the streamlining and preparation of master plan 2021 Delhi. Among many guidelines, it focused on emerging need to explore alternate methods of land assembly, private sector participation, and flexible land use and development norms. DDA Land pool policy is the result of these guidelines issued in 2021.

The final master plan 2021 was accorded after much deliberation for 4-5 years. Therefore, as an investor or end-user, one would like to know where in Delhi can I invest or can I buy for my own residential use? One would also be tempted to ask why I should invest in Delhi when there are ample opportunities to invest in satellite towns. Will the opportunity presented by master plan 2021 Delhi be a sustainable opportunity? Is it the right time to invest now or wait? These are some of the questions, a common end-user or investor will have, and therefore, we try to answer them in here:

Find below the detailed document titled ‘Opportunities under Delhi Master Plan (MPD 2021) ‘in order to make an informed decision about investment in Delhi. The document elaborates on what is the scope of opportunity, where can you invest, why should you invest and how much should you invest.

The document also includes the maps and plans of different notified zones. Go through the pros and cons of each zone before making an investment.

Thursday, January 1, 2015

Wishing all stakeholders of real estate sector a positive and Happy New Year

2014 was sluggish to say the least for realty sector. One prominent developer described year 2014 as worst for realty industry in decades. Home sales were muted in some pockets and virtually dead in some markets.

Property developers and other stakeholders were hoping for a turnaround post election 2014 in the realty sector which has been reeling for some years now. But that did not happen and in fact housing sales were low even during the festive period between Octobers - December 2014.

What were the challenges faced by real estate developers?

  1. Unsold housing stock of 7.6 Lacs housing units across India till June 2014
  2. Protest and legal recourse by buyers in cases of delayed projects
  3. High interest rates
  4. Realty sector in 2014 also witnessed adverse court judgments and regulatory orders against some developers including DLF

Positive steps were taken in Budget 2014 that will have positive impact in coming years

  1. Relaxation in FDI Norms
  2. Nod ahead for setting up of Real Estate Investment Trusts RETTs
  3. Announcement of 100 smart cities
  4. Focus and budget allocation for affordable housing

Other than the budget 2014, there were some positives as well:

  1. Improvement in office space leasing activity in second half of year
  2. Private equity (PE) investment in the realty jumped more than two-fold to Rs 8,900 crore in January-September period and the figure is likely to cross Rs 12,000 crore by year-end.
  3. Probably Real estate regulatory bill will be passed in 2015
  4. Possibility of Single window clearance system for realty projects in 2015

Therefore, the steps have been taken, however, to turn around a big wheel; it will take time when results actually show up on ground.

There is also a possibility of interest rate cuts in first half of 2015 and that shall also encourage home buyers to enter the market and book their home.

So, all in all, 2015 appears to be more promising.

Sunday, December 28, 2014

The process of an ‘NRI buying a piece of real estate in India’. Do's and Don’ts

In our earlier articles about Non Resident Indians (NRI) and Person of Indian Origins (PIO) with regards to their investment in India, we covered, range of topics such as:

  1. Guidelines that an NRI or PIO must adhere to for selling, purchasing, and financing a property in India
  2. Taxation aspects for an NRI, PIO, or a Foreigner for buying an immovable Property in India
  3. Opening of NRE-NRO-FCNR-bank accounts in India to buy, sell, rent out immovable property?
  4. Reasons why NRIs prefer investment in Indian Real Estate
  5. Impact of falling Rupee on investment in real estate sector in India by Non Resident Indians

Having covered the above topics in details, we now move on to the process of an ‘NRI buying a piece of real estate in India’. If the process described below is followed diligently by an NRI investor, then investing in Indian real estate can prove to be rather rewarding.

  • Research
First thing first, before you embark on your journey to real estate investment in India, carry out comprehensive online research. How is the builders’ reputation in the market? Locality price indices, city master plan, infrastructure project announcements are some of the things that one should note down. Compare builders’ pros and cons, compare locality pros and cons, and assess the city master plan by visiting the urban development authorities websites. A number of online forums to discuss real estate projects are also available. Visit these independent forums and gauge what others are saying, ask questions if possible. 

  • Depute someone or visit the site yourself
“Pictures tell the story” is a proverb which maybe applicable to other sectors but not to real estate sector in India.  Many newly launched websites focus on ‘Real Photos’, but ask yourself, can they tell you the actual story? Can they show you the approach road towards the project? Can they highlight slums in the nearby areas? Can they highlight the construction quality? The answer is big NO. Therefore, when it comes to buying or renting real estate in India, visit the site yourself. With NRIs living in far away countries, it becomes difficult for them to visit the project site location. Instead, ask one of your friends or relatives to do this on your behalf. The bottom-line is ‘One should never rely on pictures shown in glossy brochures or websites’.

  • Check the bank approvals
Now, that you have zeroed on 2-3 projects after having done the online research and visiting the project site, the next step is to check the bank approvals. Which are the banks that have approved the project for home loan sanctioning? Kindly note, a bank or housing finance company invests about 70-80% of money in the project in form of home loans sanctioned to buyers. Therefore, they will definitely carry out proper due-diligence including the project approvals, clearances, title certificates, etc. Ask the builder about banks which have approved the project for home loan. Talk to these banks. Go ahead with project that has a minimum of 3 banks approving it for home loan.

  • Project approvals
Even though, you have got assurances from banks about project approvals, it doesn't mean that you turn a blind eye to check the approvals yourself. Ask the builder to show you the necessary approvals such as license number issued by Town Planning Department, approved drawings, NOC from various departments. This is to double check that everything is fine with the project and you won’t end up in a soup.

  • Ask questions
Be an extrovert buyer; ask questions to builders, banks, brokers. There is never a silly question. You would be investing a size-able amount of your money, therefore, be proactive.

  • Builder buyer agreement
In recent times, some of the major developers have landed in trouble with authorities and CCI for sticking to one-sided builder buyer agreement. Read the document carefully, and clarify things before you sign the agreement.

  • Hire a lawyer
Despite all the research, one can never be 100% sure. For this, the NRI investor can as well hire a lawyer to do the title verification. The lawyer will ensure that the builder has the ownership title to the land on which he is developing the project.

  • Never pay in cash
Whether one books property online or directly at the builder’s office, never pay in cash. Pay by cheque or via the formal routes such as online transfer. Keep receipt of every payment you make to the developer.

Happy investing :)
Do share if you liked the article!

Thursday, December 25, 2014

Merry Christmas 2014

NirrtiGo wishes you Merry Christmas

On this joyous day, and throughout the coming year, may your business initiatives be filled with good luck and prosperity.

Warm wishes to home seekers, landlords, Realtor, and property developers.

Monday, December 22, 2014

Looking to sell your home in 2015, pay attention to these 5 tips!

Without doubt 2014 was tough for sellers and investors who were looking to sell their properties to make a profitable exit. It can be safely said that, 2014 was buyer’s market. Will 2015 be the same? We can’t predict, however, with improvement in economy and possibility of interest rate cuts, there could be a turnaround. We will see. But sellers and investors looking to exit must pay attention to following tips in order to attract prospective buyers or renters.

  • Attract web and mobile buyers

Today nearly all preliminary property searches in India are online. Gone are the days of newspaper classifieds. Even among online users, there is a significant portion of people who use mobile phones over web search. Therefore, if you wish to get leads from the right kind of buyers or renters, you need to focus on optimizing your property listing for mobile and web devices. Make sure you enter the right information about your property including the size, rate in Rs / SqFt, amenities offered, photos, specifications, locality, and detailed description. If you miss out on providing the right info to prospective buyers, they will simply move over your listing. Therefore, be as detailed and accurate as possible.

  • Be an investor

Put aside your feelings or emotions when you enter the market to sell your property. It might be possible that you have lived in the house that you are selling and may have memories of living there. However, when it comes time to sell, it’s crucial that you realize that your home is also an investment and shall produce market rate of return. Therefore, don your investor hat. Negotiate well with the buyer and showcase him/her how your property is different from other properties in the same locality.

  • List or advertise only when you are ready to sell

Many sellers advertise their property just to assess the market. If ever, you wish to assess the market, take advice from local agents or go through the research section on many websites about locality prices. Listing your property before assessing the market, or before doing the cash flow analysis, or before finding yourself a place to live, or before cleaning and staging your subjected property is like inviting trouble at a later stage. Don’t rush through the ‘sell’ process. In order to justify your return on investment, make sure your property is ready to be occupied by prospective buyers.

  • Hire trusted agents

Never ever list your property with multiple agents; it will bring down the property value. Instead, hire 2 to 3 professional real estate agents and persist with them even in difficult market. Choice of agent can make a substantial difference to your property and its capacity to generate higher ROI.

  • Pay attention to First impression

First impression is the last impression. Keep that in mind. Advertising online with accurate and detailed details shall be the first objective. The second task shall be to clean and stage the property. Nothing frustrates prospective buyers and renters more than inaccurate property details of your property. If the buyer is visiting for the first time, make sure your property is cleaned and staged.

Friday, December 19, 2014

Which are the Research organizations in real estate sector in India?

Real estate is a large sector and contributes about 6% to nation’s GDP. The sector is also the second largest employer of labor (formal and informal), just behind agriculture. The practices that were followed 10-20 years ago may not be relevant in today’s fast paced economic growth. The sector as a whole and its participants carry out research & development on a regular basis to improve upon construction methodologies, manpower skill enhancement, and improvement in building technologies, housing finance, and production of raw material.

India aims to house all its households by 2022, an ambitious target. There is a shortage of about 18.76 (till 2012) million housing units at the ‘bottom of pyramid’ segment of the society.  With so much at stake, the focus on research and development shall increase manifold to achieve the goals set up by government of India.

While builders, housing finance companies, material manufacturer focus on building & delivering short term targets, organizations involved in research & develop continue to innovate for long term results.

Several institutions, organizations and companies in India and the world offer educational and research opportunities in the field of housing and housing finance. Most of these institutions promote technical education and cultivate a constructive environment for promotion of scientific methods and technologies to improve quality of products and services offered.

Which are these organizations and institutions in India? We list them below:

Monday, December 15, 2014

What are the benefits of applying for a home loan in Joint name?

Sumit Sharma had planned to buy his home from a reputed developer in the locality that he was satisfied with. The cost of home was rupees 75 Lacs. Sumit had arranged for the 20% payment (Rupees 15 Lacs) from his pocket. For rest of the payment, he approached the bank to avail home loan.

Before sanctioning Rupees 60 Lacs, bank asked Sumit for following documents:

  1. Salary slip/Form 16 A
  2. A copy of the first and last pages of the ration card or a copy of PAN/Telephone/Electricity bills as a proof of residence
  3. Details of investments (FD certificates, shares, any fixed asset, etc. or any other documents supporting the financial background of the borrower)
  4. A photocopy of LIC policies with the latest premium payment receipts (if any)
  5. Passport size photographs (as applicable)
  6. A copy of bank statement for the last six months
  7. Age proof
  8. Financial details of guarantor, wherever guaranty is required

Having produced the above documents, Sumit was confident that his loan application will be approved. However, to his surprise, bank rejected his loan application on account of low monthly salary.

As a thumb rule normally most of the banks/HFCs (Housing Finance Companies) have a provision that one should be left with at least 50% to 60% of income after repayment of monthly loan installment, to take care of the family expenditures.

Sumit’s monthly salary was Rupees 80,000. For which he was eligible to avail about 40 Lacs Rupees as loan amount from his bank.

Cost of home: 75 Lacs Rupees
Upfront money arranged by Sumit: 15 Lacs Rupees
Loan eligibility: 40 Lacs Rupees
Remaining amount: (75-15-40) = 20 Lacs Rupees

Now, how will Sumit arrange for the remaining 20 lacs rupees?

To this, Sumit’s bank manager suggested that he can make his spouse as joint applicant for the home loan. Sumit’s wife was employed for last 3 years. Her net monthly income was Rupees 60,000. By combining the monthly income of both Sumit and his wife, bank was willing to sanction the loan amount of Rupees 60 Lacs. Finally, Sumit was able to buy his dream home jointly with his wife.

So, what are the benefits of applying for home loan in joint name?

  1. As can be seen from Sumit’s case above, applying jointly for home loan increases the amount of loan that bank can sanction for people to buy home.
  2. Moreover, banks or HFCs feel comfortable to sanction the loan in joint name because of greater security for the lender in view of the option to take recourse to either of borrowers.
  3. Besides improving your loan eligibility and enabling you to get a larger amount of loan, co-borrowers are eligible for deductions under the Income Tax Act. Both the borrowers can claim deduction, to the extent of their share in the loan, under Section 80C of the Income Tax Act 1961 for repayment of loan, subject to the condition that they are joint owners as well.
  4. Section 24(b) grants deduction for interest up to Rs 150,000 per year on a loan for acquiring a residential house. This deduction is available individually to both the co-borrowers. To be eligible for the deduction, the home loan needs to be taken in joint names, property be owned and financed jointly in equal shares, with both spouses being joint owners.

All the co-borrowers or joint-borrowers are jointly and severally liable to repay the loan availed from the bank/HFC, subject of course to the terms and conditions stipulated in the loan agreement. Thus, before volunteering to become co-applicant in a loan transaction, it is advisable to properly understand the implications of such decision.

Thursday, December 11, 2014

What landlords need to know about renters given the sluggish real estate market?

If you’re a landlord owning a residential or commercial property for the purpose of renting it out, then you’re probably well aware of the rental market. Demand is limited but there is ample supply of real estate including the office space properties and residential houses. So, your property would fetch less. Except for the markets of Bangalore, and Pune, rental market is sluggish across all other cities in India.

A look at the commercial office space market in Gurgaon. See how rents have fallen across micro markets during the period of July - September 2014.

source: Magicbricks

It’s a buyer’s market to say the least. As renters sit comfortably in the driver’s seat, here’s what else they are up to:

  • Saving money:

Renters who are looking to rent out office space or residential houses are able to save more in current market scenario. Barring the places like Pune, and Bangalore where there is steady demand for real estate, all other markets across the country are in downturn. Renters are getting office space or residential property at a substantial discount, thereby, able to cut their operating expenditures.

  • Negotiating harder:

Renters are able to negotiate hard with landlords. Whether they are looking to rent office space or residential property, tenants are taking their time, sometimes months to finalize the deal. By doing so, they are being able to get substantial discounts on rent paid to the landlord. Many well settled tenants have also moved out of their existing properties to get new spaces at lower rates.

  • Getting lucrative deals:

A rent deal these days is not just about rent and maintenance charges. Tenants are having a considerable say in the use of common facilities of the building. In addition to getting price cut on rent, tenants are bargaining for free car parking spaces, shorter lock-in period, and less upfront money which goes out in form of security deposit & advance rent. For example, a typical office space deal in past would have standard lease terms of 3 years lock-in period, 6 months security deposit. However, tenants are now negotiating hard for 12 months lock-in period and security deposit of just 3 months.

  • Getting posh facilities:

Common facilities such as toilets, corridors, parking spaces, reception, signage boards, etc. are being renovated by the landlords to attract renters. In some instances, landlords are going out of their way to provide high quality interior work for furnished office spaces and residential properties.

Keeping all these factors in mind, many prospective buyers are also evaluating the pros and cons of renting versus owning. And in many instances, buyers are postponing their decisions to buy real estate and instead they are opting for lucrative rental deals.

Monday, December 8, 2014

What are the parameters that I should pay attention to in order to maximize my returns on Property Investment?

Real estate is a complex business to be in. Not only one needs to understand the market (supply and demand element), but at the same time, one should be aware of tax laws, registration processes, title conveyance, planning the development of project, rent laws, and state government’s land policies. Therefore, as an individual investor, what is it that one should take primary note of in order to maximize his/her returns on investment made? Let’s explore below:

  • Micro market trends
Although not foolproof, the market trends with respect to movement of property prices present an insight into the gains and losses of micro markets within a city. If a micro market or locality is showing downward trend for 3-4 consecutive quarters, then it is a clear signal that there is something wrong with the locality that investors are wary of. However, if whole city is showing downward trend because of slow down of economic growth or political instability, then, one needs to be patient before investing in any locality within that city.

There are 3 to 4 major property indices in Indian real estate market. Analyze them in detail before investing in a property. The most talked about property index in India is released on a quarterly basis by National Housing Bank. One should definitely pay attention to this residential index.

  • Master plan of a city
Master plan of a city is another key indicator as far as maximizing returns on your property investment. Master Plan is developed by town planning authorities or city civic bodies. It is a plan that takes into consideration city’s existing population, future expansion in population, need for infrastructure, and industrial development within a city. To accommodate population growth and facilitate industrial development, civic authorities earmark or zone the city. Certain pockets or sectors are demarcated for residential development, and some other for industrial or commercial development. Therefore, what master plan tells you is that how the city’s development would pan out for coming 10-20 years. Pay considerable attention to this aspect before investing in a property. Here are the links of civic bodies across India that deal with master planning.

  • Where are builders building the new projects?
Once master plan is prepared, civic bodies then invite applications from private developers to develop the land. Therefore, it is no surprise that builders are allotted land in one cluster or certain specific clusters of the city. Which are these clusters? In addition to finding it out in master plan, one can simply analyze the market and see the launch of new real estate projects.

In addition, one can find below the detailed document comprising the Guidelines for achieving maximum returns on real estate investment in India.

Friday, December 5, 2014

What Newly Arrived Expats Need To Know About Rented Housing Options in Chennai

Chennai has attained an enviable stature in very short span of time. Industries, modern infrastructure, a lifestyle to go for and booming state economy are some of the factors that have placed the state in a list of developed cities. Southern part of India is developed and has ample opportunities in terms of career and a better lifestyle for one and all. If analyzed broadly, the state’s name shines bright in automobile and the banking sector and these sectors have also created a lot of career options for professionals or entry level job seekers for quite some time now.

Moreover, major IT companies and manufacturing firms have their branches here and this has surged the migration rate to a good number. Job aspirants and experienced professionals from different parts of India are coming to the amazing south Indian state for job and finally getting settled. On the arrival, an expat may look out for a rented accommodation for himself in an area that is close to his/her work setting and is also well-connected to the essential social as well as commercial infrastructure around the locality or the region.

Here are some of the things that an expat should consider when opting for a rented accommodation in Chennai:

Few Important Pointers to Take Note Of

  • North-West & Central Chennai Can Be the Best Deal
Now this is not a hard and fast rule but northern and central part of Chennai can be a best fit for expatriate relocation. There are localities like Beach Road, Egmore and Anna Nagar, to name a few are some of the regions that are a good mix of residential and shopping areas. The localities are also well-connected through roads and also offer close proximity to railway stations and airport. So, the first step could be selecting the right location and any of these localities can be a best fit.
  • Serviced Apartments Are Good to Go
The southern part of India is riding high on realty success and one of the yields is the serviced apartments. The apartments are relatively cheaper than luxurious 2 BHK homes and have all the amenities intact within. The person residing within needn’t worry about adjusting as the apartments are spacious and are apt for both temporary and permanent stay. Expats can have a pleasant stay in such flats and this could be a good bridge towards finding a new and better housing option. Places that have already adopted the concept of serviced apartments include Bangalore, Chennai and similar developed areas.
  • The Cost of Living
Compared to developed cities like Bangalore, Chennai has quite an affordable cost of living. The daily recommended minimum amount of money for food per person is Rs. 240, which is just within the price range of monthly recommended minimum amount of money for food per person (assuming 31 days), Rs. 7,439.88. The expats who have just arrived and have spent a good number of days will find their pockets not much exploited when expending on groceries, healthcare or simply on leisure.
  • Flats For Expats
Areas like Old Mahabalipuram road and Besant Nagar are some of the densely flocked areas; majorly by the expat populace. There are realtors who have constructed a range of residential spaces that are being offered at an affordable price range. Expats are favoring mostly small-sized apartments and 1 BHK house for rent in Chennai. The flats are constructed in areas that are near to the social infrastructures and also have a close proximity to the IT hubs.

Here are some hard facts that reflect price trends in one of the most popular regions of Chennai:

There are other aspects about Chennai’s realty market that an expat needs to understand. The aspects are pretty much related to the rented housing options. Here are the facts:

Few Lesser Known Facts

  • Safety
Safety matters and it definitely holds importance for the novices in town. The expats should make sure that the localities they are choosing is surrounded by friendly areas so that chances of thefts and miss happenings rarely exist. The facts say that Chennai is one of the safest Indian cities and the populace is extremely law abiding.  Still, there are certain things one can take note of:
    1. Huge amount of cash should not be kept in the flat
    2. Dress inconspicuously as Chennai is a little conservative south Indian city
    3. Try to be friendly with neighbors but be cautious while revealing your personal and professional data.
    4. Other safety measures could be traffic safety as the roads in Chennai are crowded and a little carelessness can be hazardous to life.
  • Dig in Company’s Relocation Package
An expat should be aware about all the clauses in the relocation packages and papers. They need to know that there are companies that include finding a home in their relocation clauses. This can be a great helping hand for expats who are relocating for professional purposes and are looking forward to staying there for long.  The best part is that though you will have a rented option in hand, still an expat will be offered information about accessing to maids and drivers as a part of the relocation package.
  • Power of Internet& Agents
While on a search for a perfect home, an expat can take advantage of the realty portals and websites. There are sites like,, to name a few that can be accessed and considered for searching homes on rent. The person can see through the price range, locality and varieties of housing option for himself.
There is another option that will definitely hit the bull’s eye and that is reaching out to the real estate agents. These agents have been into the business and have met the people in the domain. Moreover, the agents will also help you in stopping onto the right deal and making a feasible agreement documents for the expats and people who have less knowledge about the localities.
  • People & Languages
An expat’s stint with the new city can be fruitful as well as challenging both. In an effort to find a rented option in Chennai, an expat should also have some basic know-how of people, culture and language spoken. This makes the scenario, exciting as well as a learning experience. Considering the language here, the people native to Chennai considers Tamil to be their official language, with Telugu at the second rank. If the expat is an English-speaker, then surviving in Chennai will be easier.

Few Final Words

Chennai is a place to be at the moment and an expat can have plenty of options in the rented arena. The apartments are of varied style and are all provided with the necessary facilities. Moreover, the prices tagged on the apartments and housing options are within the reach.

This is a blog post by Pawansingh kumar

Wednesday, December 3, 2014

3 quick tips for a first time Property Investor in Chennai

Chennai’s realty market has shown positive signs of growth which has attracted a number of home buyers and investors here. And with the market being very profitable, thanks to its high ROI (Return on Investment), the city has become a haven for many first time home buyers. Despite the attractive returns, owning a piece of real estate today seems to be a tedious task. From managing resources to zeroing down on the right location, there are a number of aspects that one needs to take care of. If you are a potential first time investors and wants to invest in properties for sale in Chennai then follow these tips before finalizing your property.

  • Buy properties near government approved infrastructure

As a rule of thumb we always tend to invest in an area where infrastructure projects are materializing, thinking that the capital values of homes will escalate. However that is not the case. Investing in areas close to projects like the metro rail, upcoming airport or even any IT Park will result in government taking over your land. Changes in routes and expansions along a tech park and airports are bound to happen which will force the authorities to acquire neighboring land. Once your property falls under the radar, you will not be able to sell your property according to the market prices. The compensation you receive by the state bodies will be based on the government guideline value which is indexed at a relatively lower price. The best thing to do is to wait for the authorities to approve the project and invest in properties for sale in Chennai only after the work has commenced. It will not only save you from hassles but also result in a formidable investment option in the near future.

  • Don’t invest in stagnant suburbs

A number of apartments for sale in Chennai especially in the outskirts of the city are finding many takers due to their affordable prices. However, one should remember to invest in a suburb that is in its growing stage. Peripherals along the north of Chennai especially localities like Ennore, Minjur and Ponneri have several approved industrial projects that are going to come up, however, all those advancements will not be able to formulate for the coming 10 years. So you’d rather invest in suburbs that have already shown signs of growth like Navallur, Sholinganallur and Kelambakkam. Apartments for sale in Chennai especially in the southern region of the city have many buyers due to its economical prices and reliable civic facilities.

  • Strike the right balance while investing in IT hubs

Many IT corridors attract number of investors due to its high rental yield, however it is very essential to understand the market first. The IT/ITes insurgence has already provided many home buyers varied options and investing in an open market would not yield high returns, so it is very important to identify pockets where there is a demand and invest in only those projects that meet the needs and requirements of the working cosmopolitan crowd.

This is a guest post by Sulabha Kulkarni

Monday, December 1, 2014

Looking to buy that elusive dream home for your family? What are the home loan rates in India?

Looking to buy that elusive dream home for your family? Even after identifying the location and builder, the next big question is home financing. Which bank to approach and what are the current home loan rates that are offered by these banks? These are some of the questions that need clarification. At the same time, one might begin to wonder what, if any, are the basic differences between various home loan products offered by banks.

Here we help you in clarifying those questions:

Types of mortgage loan:

  • Fixed Rate Mortgages - Constant Payment Mortgage Loan (CPM):

In this type of loan, the interest rate remains fixed during the tenure of loan. Rate of interest is normally higher in these types of Loans.

  • Fixed Rate Mortgages – Graduated Payment Mortgages (GPM)

Some individuals have less income in starting years of their careers; those individuals are not considered for loan. To overcome this effect, lenders have designed a mortgage loan that retains a fixed rate of interest but includes a series of stepped up payments that are lower in earlier years, thereby better matching borrower’s incomes, and then rising over time.

  • Adjustable (Floating) Rate Mortgages (ARM) also known as Floating Interest Rates:

These mortgages provide an alternative method of financing through which lenders and borrowers share the risk of interest rate changes. In this type of loan, since interest rates are adjustable, they are indexed to say wholesale price index (WPI) or other market interest rates.

  • Hybrid Adjustable Rate Mortgages

This is the most common type of mortgage loan used these days. Hybrid ARMs combines elements of fixed rate mortgages for periods of 3, 5, or 7 years, after which interest rates are reset and the loan becomes an ARM.

Read here for more on Home Loan interest rates and the process of securing home loan in India.

Interest Rates in India – Dated November 28th 2014.

Loan upto Rs 75 Lakh (Floating Interest Rates)
Bank Amount Tenure (Years) Interest Rate (%)
HDFC Ltd Up to Rupees 75 Lakh Up to 20 years 10.15
ICICI Ltd Up to 10 years 10.15
State Bank of India (SBI) Up to Rupees 75 Lakh Up to 20 years 10.15
Punjab National Bank (PNB) Up to Rupees 75 Lakh Up to 20 years 10.25
Punjab National Bank (PNB) Above Rupees 75 Lakh Up to 20 years 10.5
Axis Bank Up to Rupees 75 Lakh 10 Years 10.15
Bank of India Up to Rupees 75 Lakh Up to 20 years 10.2
Canara Bank Up to Rupees 75 Lakh Up to 20 years 10.2
Union Bank Up to Rupees 75 Lakh Up to 30 years 10.25
Dewan Housing Finance Corporation Limited (DHFL) Rs 30 Lakh - 75 Lakh Up to 20 years 11

Loan Above Rupees 75 Lakh (Floating Interest Rates)
Bank Amount Tenure (Years) Interest Rate (%)
HDFC Ltd Up to Rupees 75 Lakh 10 10.15
ICICI Bank Rs 75 Lakh - 5 Crore 20 10.5
State Bank of India (SBI) Up to Rupees 75 Lakh Up to 20 years 10.15
Canara Bank Above Rupees 75 Lakh Up to 20 years 10.45
Union Bank Up to Rupees 75 Lakh Up to 30 years 10.25

Note: Floating Rates changes as and when bank changes their base rates. There are also other kinds of interest rates that bank offer such as 2 year fixed interest rates or 3 year fixed interest rates as described above. Contact your bank for those kind of home loan interest rates.

Friday, November 28, 2014

Selling your house? Enhance its marketability

Ask any corporate honcho or the guys in the sales & marketing division about the product their company manufactures and its marketability, all of them will nod in agreement that besides product features, it should be packaged and presented brilliantly.

Same can be applied to your house. It’s a product and you are the marketing manager of this product. Besides possessing features such as large spacious rooms, attached toilets, balconies, excellent floor plan, it should be presented beautifully to prospective buyers.

Just like a buyer purchases a product he or she feels connected to, similarly, your house that you are putting up for sale shall generate the feeling of belonging to the buyer. How can you do it? How can you make sure that buyer feels attached to the house when he/she visits it? Below are some tips:

  • Stage the house:

Have you ever visited the IKEA store Or for that matter, any other large supermarket to buy furniture; groceries; kitchen utensils; etc.? What you see there is staging of items you wish to buy. A bedroom is staged with bed, table, carpet, etc. Even, walls are designed in such a way that it feels like your own bedroom. One begins to feel it, fantasize it.  Therefore, before you decide to put your house for sale, you should stage it and never keep it empty.

An empty house is a terrible way of presenting your house to prospective buyers. A buyer finds it extremely difficult to visualize him living there. The rooms, kitchen, and even toilets in an empty house appear smaller. Therefore, one should stage his / her house in order to sell at high value.

  • House should be presentable:

While you should never show the empty house to prospective buyers, one should be careful in placing the furniture. The furniture should enhance room’s best features. Be creative and arrange the furniture in such a way that it downplays the negative characteristics of your house and augment the best characteristics. When arranging the furniture, follow the mantra ‘less is more’. Do not ever block windows or crowd out furniture at one place. Keep furniture at an optimum distance from the door.

  • Remove unwanted items and clutter:

There are always some unwanted items in the house that you would have accumulated over a period of time. It was not in use for you but still you kept it in the house. This is the time to sell those unwanted things to make your house clutter free. Any prospective buyer visiting the house will not be distracted by these items and instead will be focused in visualizing the house for his / her family. At the same time, keep away all extraneous things like bottles, papers, cosmetic items, bathroom collections, etc. The idea is to present your house as neat as possible without all these distractions.

  • Keep it clean:

No point in highlighting this simple yet overlooked fact. Many a times, we have seen, seller becomes callous and on a typical house tour what one find is unclean toilets, unhygienic kitchen, pile of newspapers, poorly maintained cupboards, greasy electric boards & switches. This surely puts off the prospective buyer. All it takes is 3-4 hours of work to clean the house including the toilets, kitchen, cupboards, flooring, switches, etc. In fact, one can get it done by a house keeping staff for as low as Rupees 1000 or less. Therefore, one should not overlook this simple factor before putting his /her house for sale or for that matter for rent.

  • Comfort:

Home is one place where one finds comfort at the end of a hard day of work. A buyer when visits your house, unconsciously or consciously, he / she is visualizing it from many angles including the comfort factor. Pillows arranged on the couch or bed and soft, clean towels in the bathroom will give your home a more appealing look and are easy additions to a space. Decorative candles, even when unlit, are a great styling tool and provide a light scent in the room.

If you can’t do all of these on your own, you can hire one of the housekeeping companies. There are many housekeeping companies that will clean your house and will also give it an appealing look.

Monday, November 24, 2014

How to calculate Reverse Mortgage Loan Monthly Payments?

In our previous post, we covered the concept of Reverse Mortgage Loan (RML). We covered elements such as definition of Reverse mortgage Loan, eligibility criteria, amount that can be availed, and modes & nature of payments.

People from across the country showed substantial interest in Reverse Mortgage Loan.  And there were queries from ‘formula to calculate monthly payment’ to ‘paying the amount back to bank’. We cover all of this below:

Installment Amount = ((PV*LTVR-OTDA)*I)/ (((1+I)^n)-1)

Where, PV=Property Value;
OTDA=One Time Disbursement Amount;
n=No. Of Installment Payments;
I= the value of 'I' will depend on Disbursement Frequency selected.

For Example,
Property Value (PV) = 10, 00,000
LTV Ratio (LTVR) =80%
One Time Disbursement Amount (OTDA) =0
Loan Disbursement Period=15 Years
Disbursement Frequency=Monthly
Interest Rate (IR) = 9.25 %

Calculations: On the basis of the inputs:
The disbursement frequency selected is Monthly so 'I' will be IR/12(i.e. 9.25%/12)
No. of installment payments (n) will be calculated monthly e.g. if 15 is selected then the n=15*12=180
Putting the values in the formula:
Installment Amount=Rs.2, 070;

Here is a detailed example of Mr. Sharma, 62 years of age and own a property worth Rupees 1.5 Crores in Gurgaon. Mr. Sharma lives with his wife 59 years of age. Both his sons are married and settled abroad. On knowing about the merits of Reverse Mortgage Loan (RML), Mr. Sharma decided to check on the eligibility and monthly payment that he will be getting.

While he is clearly eligible for the same (find Reverse Mortgage Loan Eligibility criteria), he found it rather cumbersome to calculate the monthly payment that he will receive.

Property Value PV = 1.5 Crores (15000000)
Loan to Value Ratio (LTVR) = 80% (As specified by RBI)
One Time Disbursement Amount (OTDA) = 0 (No amount is disbursed in one go, instead banks pay monthly payments to applicant)
Loan Disbursement Period (n) = 15 years or 180 months
Disbursement frequency = Monthly
Current Interest Rate (I) = 10.25% yearly or (10.25/12)% = 0.854167% monthly

Calculating the monthly installment amount by putting all these value in given formula in excel:
Installment Amount = (((PV*LTVR)-OTDA)*I)/ (((1+I)^n)-1)
Installment amount = 28294

So, Mr. Sharma will be getting a monthly payment of Rupees 28294 for 15 years. Upon completion of 15 years, Mr. Sharma can either extend his Reverse Mortgage Loan (RML) payments or pay the outstanding amount to bank to get back his house.