Factors to Understand your need

Indians have an inclination and love for Real Estate Investments. Real estate can be a very common topic in most family and social gatherings, many times also linked with the esteem and pride of owning a particular Real Estate unit. Hence real estate not only has end-users but also draws attention from many investors also.

Investing and End use ultimately refer to purchasing real estate but they have different trends while purchasing considering various criterions. Let’s have a look at these important criterion closely.

LOCATION

End-users: 

End users purchase the real estate unit with the plan of shifting into the unit in a certain time frame. For End-users, they ensure various aspects of the home primarily being the locality and the location i.e. the proximity to social infrastructures like schools, hospitals, places of worship, markets, hotels and malls. They prefer the location which is well connected to the city and is closed to their work places. End users mainly families look for safety by having a good locality which is safe for women and children at all hours of the day. 

Investors:

Investors on the other hand have a total different approach to the home buying and selling experience. They are more concerned with the Return on Investment (ROI) that the potential investment will provide them over a period of time. The major important factor that caters to the real estate unit selection is radical research of the location. Investors prefer investments in new upcoming and developing localities like those on the peripheries of major towns and cities. Towns/cities being saturated and having very high rates lead to lower returns over a period of time compared to the location on the fringes of cities which are in the early nascent stages of development and over a period of 5-10 years would witness a price shoot-up due to the over saturation of the cities which the surround. In situations to earn a rental source of income the investors look at the locations that are easily rentable to due proximity to municipal/government services and good infrastructural connectivity.

FAMILY SIZE VS RESALE VALUE

End Users:

Family size plays a pivotal role in the selection of the home for a home buyer who is the end-user. In the case of a larger family, the home seeker looks for an apartment with a larger number of rooms whereas for a smaller nuclear family a smaller configuration real estate unit is preferable. The purchaser of the real estate has to be able to understand his priorities with family size and the proximity to the city centre in mind while deciding his optimal real estate unit.

Investors:

Investors, on the other hand, are not affected by the family size rather they are more inclined to know the resale value of their unit. They focus on buying apartments that would yield a better rate of return in the due course of time. They prefer buying configurations that are more popular so that they would be easily able to dispose of the investment and liquidate the cash whenever they seem fit.

INFRASTRUCTURAL DEVELOPMENT

End-users:

End Users always look at good infrastructure before purchasing any real estate unit as they would need those for their day to day living and commuting. They take care that the apartment has well-developed infrastructure like a decent road network, reputed schools, hospitals and recreational zones within the vicinity and proximity to big connectivity links like bus stops, railway stations, metro, airport terminus and ensure easy living and fast commuting.

Investors: 

Investors are not looking at investment in real estate in areas that have fully developed infrastructure in place. They rather prefer areas that have proposed infrastructural development in the near future which enable them to buy the units at reasonable and much cheaper pricing. In cases where the government or local municipal bodies have announced future development increases the location attractive index i.e. the area draws more real estate investments.

POSSESSION STATUS

End-users:

The possession status of the property you’re going to buy is extremely crucial because it determines your monthly outflow with the rental till possession and the kind of EMIs if you’re going to avail a home loan. If you’re an end-user and living on rent, it makes more sense to purchase a ready-to-move-in property or a nearing possession one. You can make a fair decision by factoring in the EMIs and the rental outgo and looking at the advantages and disadvantages of both options.

Investors:

Investors are generally looking at higher ROIs (Return on Investments) which is possible mostly in under-construction properties. If you’re an investor you need to make a fair decision on the option in real estate where you are making your investments. You need to understand the possession timeline by the developer and the past track record before making a decision. Whereas if you planning on making rental incomes a source of steady income you would be looking at ready to move or pre-leased property options.

PROPERTY TYPE

Real Estate has a very diversified range of options ranging from Residential, Commercial, Industrial, Lands, Plots and many more which are suit different purposes. Each major section also has a range of options.

End-users:

End Users need to understand their family or business needs before investing in the real estate. If they are looking at residential then according to the family preference and budget they can choose to buy different configurations of flats, bungalows, villas, penthouses or plots to construct their own preferred real estate unit. 

In case of business depending on the industry and the need they can buy warehouses, go-downs, shops, offices, retail units, showrooms etc.

Investors:
Investors are either interested in good returns or in the consistent rental income from leasing their real estate units. They do thorough research in various viable options in their hand including the residential and the other segments.

When they are purchasing for returns they look at investing in units that are going to achieve a greater amount in shorter periods of time. They prefer to buy residential in developing suburbs and industrial and commercial in developing industrial and commercial corridors.

While when they look at fixed rental income they purchase easily leasable spaces. In residential segments, they would take a common configuration with decent connectivity and infrastructure. Whereas for commercial and industrial segments they look for units in established commercial and industrial hubs.