Over time, property investments offer handsome returns but the initial investment is always heavy on the pocket. Before buying the property, one should try to evaluate a property in every possible way. Always try to look at the appreciation rate of the property after given number of years. Let’s have a look what are the factors that affect the appreciation rate or the property valuation in India:
Location – Location is the prime factor that affects the property valuation rate in India. Properties based in commercial areas seem to have a higher appreciation rate in comparison to properties located in residential areas. If your property is close to a major IT hub, it is obvious that the rentals, demand and price for your property goes up since people working close by will have the desperate need to always rent or buy the property.
Properties located in the heart of the city surrounded with good infrastructure, schools, hospitals, markets, malls are more expensive than the properties in upcoming and under developed areas. Where would you like to invest and what seems to give you double returns is something you need to ponder upon. Talk to local property dealers, developers from a very developed part of the city and an upcoming area. Compare the property appreciation rate trend in both areas and then make a decision.
Connectivity – Connectivity is another major reason that affect the property valuation in India. Good infrastructure such as airport, metro, flyovers and roads, if are in near proximity to your property, you can expect your property rate to appreciate. When planning to buy properties in under developed areas of the city, always research about the nearby infrastructure that is yet to be built. If you invest in an under developed area, which has some great infrastructure plans in next five years, you may be looking at a whopping rate of appreciation for your property.
Construction Quality – The quality of construction to build a particular property is very important in valuation of a property. The material, design, layout, architecture and the longevity of a building all add to the valuation of a property. Buying a property from a known and reputed builder like Sobha, Lodha, Prestige, DLF who are known for their construction quality will always lead to a higher appreciation rate for your property. In case, you are buying property from one of the local builders, be very sure about it since you don’t want to spend on repairing etc. due to low quality of construction leading to a depreciation in your property rate. Look at some of their prior projects, talk to buyers, take feedback and then take a decision.
Amenities – Presently, common amenities such as pool, gym, parking, garden area and community centre all add value to your property. The urban buyers don’t just look at square feet area of the house anymore, they also want amenities, which makes their life convenient and comfortable. A property coupled with amenities will obviously appreciate more than a just a regular property with no amenities. If you are looking at a property to live in yourself, obviously amenities become an essential but in case you are just looking for a second investment in property, you may want to forego the amenities if the infrastructure next to your property is superb.
Interiors and customization – Good interiors like high quality wood work, top quality bathroom fittings, superior quality paint and top–end flooring etc. add value to your property. Some customers modify their regular kitchens into modular kitchens, a closed living room is customized into an open living room cum dining space, which obviously appreciates the value of the property. The properties with customized rooms or modern fittings obviously appreciate at a higher rate than the regular properties.
Evaluate all the above mentioned factors and then take your property investment decision; after all it’s your hard earned money and you don’t want to just give it away like that.
Best of luck!