Buying a home is one of the very defining moments in a person’s life. It symbolizes being established and settled somewhere, even cementing your adult status of economic stability. A home is an anchor, which should always be built with the most robust metal and foundation. Therefore, when buying your first home, ensure it has the build and utility that outlasts your needs.
Am I planning to stay in this property, and for how long?
This can help you decide how much you want to invest in further developing the property and limiting the influx of money into the property.
Am I buying this property for residential purposes or a rental value?
This can help you get perspective on the build of the house that would benefit you more in the days to come. Buying an. Independent houses with separate floors or apartments will help you to make renting out your property more accessible.
Is the cost of the property in alignment with the budget I hold?
Not going beyond your financial capacity is also a wise decision because it might affect your family and other areas of your financial responsibilities, creating a stressful situation without any proportional increase in income.
Can I manage the loan and the interest rates with my income?
There are various loan options available to you, and you can choose a method that best fits your requirements and capacity to give interest from your available income in the long run.
Do I want a big house in a small locality or a small house in a better locality?
This becomes a crucial question to answer during the purchase, and it is an entirely personal choice. Suppose you are purchasing a home for its proximity to a prominent location and also have a smaller family to accommodate. In that case, a smaller house in a better locality is a good option because you can sell it later for a better resale price.
A bigger home in a more serene location is ideal for a large family and is more suitable for a forever home as the city keeps expanding. If it is not now, it can integrate into the cityscape later.
Is the location of the home safe for the family?
A very valid concern when purchasing a home is safety. A residential area has better prospects for safety when compared to a more secluded area due to the sheer number of people around.
Is the land with the home plot disputed in any manner?
Finding out the legal status of the property is essential to avoid any further issues in claims and other kinds of fraudulent activities.
If you can answer these questions honestly, you are ready to invest mindfully in your new home.
Highlights of different types of property and their advantages:
Here is a list of pros and cons which you can consider while exploring the kind of property you wish to purchase:
- Plots:
Pros-
It is a more affordable investment than buying an entire house.
You can use it for any purpose, Whether for building a home, a farm or even a commercial outlet.
It’s a low-maintenance investment; it needs a boundary wall to prevent ownership disputes.
The time between buying and possession of the land is lower
Cons
There is a chance of encroachment in certain areas
Plots are not assets with high liquidity, as it takes time to find a buyer willing to purchase them at the correct or quoted price.
Financing construction on plots is more complex and lengthier, as banks usually do not consider plots as safe assets as apartments or villas. - Apartments:
Pros-
a.Apartment complexes are excellent from the point of view of security
b.They are usually located in the central hub of the city, increasing their proximity to several essential amenities in the city
c.Financing the purchase of an apartment is a relatively more straightforward process
d.There are apartments for every budget, making affordability a beautiful feature
e.There are a lot of tax benefits in buying apartments. The interest on the loan payment can be subtracted from the taxes, and you can later manage the property taxes with rental income if you move to a new place.
f.There is always an appreciation for the value of a well-placed flat in the city, ensuring better returns for your investment on resale.
Cons–
The apartment has limited space to cater to a growing family’s needs.
Sometimes, there can be a lack of sense of privacy due to shared walls and ceilings.
The maintenance fee of the apartment complex is another thing to factory in
You have to abide by the apartment norms, which could restrict your freedom in certain aspects, like owning pets. - Villas and Independent Houses:
Pros:
a.The appreciation in the value of villas is faster than that of flats
b.There is more space within the home
c.You can have your own private garden and terrace space
d.There are relatively more relaxed norms for villa owners within the company to allow for modifications within the house and pet ownership.
Cons:
a.The initial investment into a villa is usually very high
b.The cost of maintaining a villa is way more than that of an apartment
c.Living in a villa will also require more expenditure for furnishing and paying other bills.
How to choose an area to buy your first home?
It is essential to buy a house in an area that can grow in the coming years; this would enhance its resale and rental value. There should be proximity to good infrastructure for schools, healthcare, and transportation.
The neighbourhood should be safe, patrolled by the police, and have non-existent crime rates ideally. Being close to the nearby employment hubs will also make it desirable.
What are the tax benefits that I can get as a new homeowner?
New homeowners can avail of several tax benefits under the Income Tax Act 1961.
One can expect a reduction in interest paid for home loans Under section 80 C for the principal amount paid in interest up to ₹1,50,000, provided the loans are taken from financial institutions defined by the Income Tax Act. Another factor to consider is that the property should not be sold for the next five years if any tax deduction is claimed. One can also claim additional tax deductions under section 80 E of rupees 50,000 on the interest paid to the bank. There is also section 24B that allows a deduction of ₹2,00,000 when the construction or acquisition of the house is completed within five years of taking the loan.
One can also avail of flexible home loan options at lower interest rates by financial institutes like banks, non-banking organizations, or individuals.
PMAY, or Pradhan Mantri Awas Yojana, also offers financial subsidies and assistance to 2 eligible first-time homeowners.
There are also rebates under section 80GG that help find first-time homeowners who do not receive their house rent allowance from their employers.
