Purchasing a home represents an immense financial together with emotional commitment for most people. In India real estate represents protection from harm as well as social position so prospective buyers base their decisions on feelings and receive inadequate details about properties. A discussion with real estate expert Vishal Bhargava on Groww explores all the mistakes that homebuyers make along with their remedies during a valuable interview.
This blog provides the essential information that every potential homebuyer or investor and those puzzled by rent-and-buy decisions require before finalizing their purchase.
1. Renting vs Buying Know What Works for You
Indian real estate professionals actively debate between property rental and property ownership. Vishal Bhargava advises people to rent properties before deciding to purchase. Responding to your future home and location requires a simple trial experience.
When Should You Rent?
- If you’re young and mobile, rent gives you flexibility.
- If your career or family life is in transition, renting allows adaptability.
- If the rental yield is too low, it may not make sense to buy.
India’s rental yield is typically 2–3%, making renting more economical in many metro cities.
When Should You Buy?
- If you’re planning to settle for at least 10 years in one city.
- If you’re financially prepared with enough down payment and income stability.
- If you’ve explored the neighborhood thoroughly.
2. The 5-20-30-40 Rule: Your Financial Guide to Buying Property
House purchases will end in failure when conducted without careful financial preparation. According to Vishal a straightforward real estate financial principle exists which states the following:
Your house purchase should never exceed five times your annual salary.
The term of a 20-year loan should be kept short to reduce the long-term burden on EMIs.
Cashing out 30% of your property value upfront serves to decrease your mortgage responsibility.
To manage EMI costs properly you should keep the monthly payment at a maximum of 40% of your monthly earnings.
If your household income is ₹1 lakh/month, your budget should not exceed ₹60–65 lakhs.
3. Rental Agreement Red Flags: Protect Yourself as a Tenant
Almost all renters fail to review the details printed in their rental contracts. There are two major issues which renters should be conscious of regarding deposits and concealed charges.
- Residents of Bangalore must provide six to eleven months of their rental payment as a deposit during the leasing process. Always negotiate.
- The cost for accessing the lifting system within societies ranges from ₹15000 to ₹25000.
- The agreement must specify which costs the renter and the landlord will cover respectively.
- Every resident should document their home with a video recording shortly before their house move.Video Documentation: Always record a walkthrough of the home before moving in.
- All rent escalation provisions must contain an annual increase limit of no more than 10 percent.
4. Avoid Subvention and Buy-Now-Pay-Later Scams
You should be cautious about installment plans that need your payment of 10% before delivery and postponement of remaining payment. These terms seem desirable but they bring undisclosed hazards to your investment process.
- The builders increase property price values as a way to handle delayed payment plans.
- Banks decrease the amount of loan payments to protect their financial interest in the transactions.
- You will remain responsible for paying EMIs and rent with additional risk of losing your property investment if the builder keeps property development deadlines from being met.
Many subvention schemes received a ban from RBI. Builders who use this approach should be avoided by prospective buyers.
5. Under Construction vs Ready-to-Move: Timing Is Everything
The decision between under-construction or ready-to-move properties depends heavily on when you plan to occupy the unit. Vishal illustrates the connection meaningfully between under-construction property acquisition and small-cap stock investment.
- During launch stage you face high risks while enjoying the potential for substantial rewards.
- The real estate market presents mid-cap properties as having low to medium risk levels between construction phases.
- The near-completion phase with OC receipt issuance corresponds to large-cap options that deliver security without significant value appreciation.
Make sure to inspect whether the amenities will be delivered at the same time as the apartment.
6. Due Diligence Checklist: Choosing the Right Builder
Before booking a flat, investigate:
- A thorough examination requires checking older construction sites. Talk to all inhabitants and tenants together with security personnel who protect the buildings.
- Invest only in property developments which have received registration through RERA. Review the builder’s records of submission and property delivery.
- Responsible builders show their development costs in full detail to prospective buyers. Residential complexes without concealed added rates and parking fees should be avoided.
7. Carpet Area vs Super Built-Up Area: Don’t Be Fooled
The calculation of super built-up areas enables builders to present rates per sq ft at a lower figure. Understand the difference:
- Carpet Area: Usable area within the walls of your flat.
- The Super Built-Up includes all elements from carpet area plus the portions of common areas including lobbies and lifts and building amenities.
A flat with 1000 sq. ft. carpet space along with 1400 sq. ft. super built-up spans 40 percent beyond its carpet dimensions.
The carpet area is the primary measurement so you should always request to see it and use it for price negotiation.
8. Top Mistakes to Avoid While Buying Property
Vishal identifies the most common errors that people make during property purchase as follows:
- Property search should begin later than immediately as location uncertainty remains.
- When you select inexpensive builders for work they might abandon the project or reduce its quality.
- Choosing the wrong neighborhood location should never result in poor accessibility or being less convenient even though the price is appealing.
- Emotional Purchases: Treat home-buying like an investment decision, not a status symbol.
9. Land Buying: Complexity and Caution
Thinking of investing in land?
- Agricultural Land: Needs conversion to residential/commercial. Land investments must have an unencumbered title and need legal examinations.
- The annual rent for commercial properties delivers yields of between 6–7 percent while their value appreciates to a lesser extent. Always conduct checks on property demand together with tenant composition and legal framework.
- Reputable builders regardless of their status have encountered legal complications. It is essential to check both previous ownership documents and legal records in each transaction.
10. Location Analysis: Where Should You Invest?
Top Real Estate Markets in India:
- Mumbai: High price, low rental yield. Good public transport, sea-view premium homes.
- Gurgaon: Great for private transport. Golf Course Road has some of the highest rentals in India.
- Bangalore: Best for people and career growth. Infrastructure is a bottleneck but improving.
- Hyderabad: The best mix of affordability and infrastructure. A true paisa-vasool market.
- Noida: Safety concerns persist, but good infrastructure and pricing.
Migration drives real estate prices. People should allocate their investments towards regions which exhibit simultaneous growth of infrastructure and population.
11. REITs For Those Who Want Real Estate Exposure Without Buying Property
Real Estate Investment Trusts (REITs) are a new-age option for small investors.
- What Are REITs?: Pooled real estate portfolios (offices, malls) that pay out regular dividends.
- Returns: Typically 6–7% annually.
- Liquidity: Traded like stocks. Ideal for those who want stable returns without the hassles of property management.
People in India usually treat property investment as a fortune game while this strategy proves incorrect. Vishal describes property buying without research as equivalent to stock buying based on tips.
Real estate should be:
- Well-researched
- Financially viable
- Emotionally detached
- Long-term oriented
Potential buyers should rent their properties instead of purchasing them if they cannot determine the right time to invest. Test the waters. Learn the locality. Build your down paymen
Investing in real estate requires selecting properties which synchronize with your present stage in life alongside your financial targets and permanent construct.
