Is It The Right Time To Buy A Property
Till two years back, no one really imagined that property prices could decline so much That time it seemed almost unbelievable that realtors could actually offer so many discounts and freebies on properties But it has finally come true . .As there has been an immense decline in demand for property among buyers, realtors are taking all kinds of measure to create a surge in demand Big realtors are offering price cuts and discounts on properties and small and medium sized developers are offering freebies along with properties . . .Recently, DLF announced 20% price cuts in Gurgaon housing projects The company announced this move discourage existing buyers from defaulting on payment and induce new buying Not only this, the company has also cut prices in Bangalore, Chennai and Hyderabad by almost 20% In Bangalore, prices have been reduced to Rs 1, 850 per sq ft from Rs 2, 750 per sq ft . .While price cuts have been announced by biggies in the market, other developers are offering unusual freebies like a car free with a house For instance, RDB Developers in Kolkata has made a recent offer of giving a Nano free with its new housing project The company has decided to give the car ‘free’ with a flat for its first 50 buyers The company has booked around 50 Nano cars with Tata Motors for giving it free with flats in one of its residential projects in Sonarpur, South 24-Parganas Another realtor in Kolkata took a similar step and is offering free car space with flats . .Besides the developers, government is taking equal interest in boosting the demand for housing Not only they have declined interest rates but also prices by 10% India’s biggest lenders such as State Bank of India (SBI), HDFC Ltd , LIC Housing Finance, etc have reduced their loan interest rates . .With property prices falling and with such enticements being given to buyers, is it the right time to buy a property or not? . .As per experts, it is actually not .Contrary to conventional wisdom, experts are of the view that this may not be the right time to invest in residential real estate market Their advice is for both the first and second-time home buyers As per a recent report from PropEquity, a firm that maintains data on real estate, in the first quarter of the current financial year, the Mumbai market saw an average correction of 42 84 per cent compared to the corresponding quarter last year And, a report by Centrum Broking on Maharashtra Chamber of Housing Industry’s exhibition said, major developers such as Kalpataru, Lodha, Rustomjee and Acme Group were quoting prices 20 per cent lower than their card rate six months ago Godrej Properties had dropped the price it quoted for its Mahalaxmi project (Planet Godrej) by 34 per cent .Not only in Mumbai, according to the PropEquity report, prices in other major metros too have seen a significant correction in the past six months . .These areas include Gurgaon (24 per cent correction), Chennai (13 per cent) and Hyderabad (10 per cent) for the same time period As per Mr Hitungshu Debnath, executive director, distribution and wealth management, Angel Broking, "To begin with, the yields of residential properties are low They are between 3-5 per cent only " He added that if you take a loan from a bank and expect the rent income to help you pay the equated monthly instalment (EMI), you will need to rethink the math "The rent income along with property appreciation will not be able to cover even the interest that the investor will pay for the home loan in the first few years This is called as opportunity cost in real estate To get good returns, the buyer will need to hold on to the property for a long time, probably till the loan is repaid," says a property expert . .They also suggest that real estate prices are most probably going to remain stable for at least two years, that is, if the correction stops But if you are still not convinced and want to go ahead with the purchase, wait for just another six months They feel that by that time there will be some clarity on the economy as well as the real estate industry in this period .
Source: www.rsstnx.com
Low Letting Fees - Too good to be true
With the huge slow down in house sales the property market is seeing an increase in demand for rental property. Some letting agents are starting to cut their commission charges hoping to increase their property stock of which they can immediately offer to registered tenants. A high turnover of properties will result in much needed revenue flowing into your agency. Such a de-crease in charges will suit some landlords or investors amidst the credit crunch but long term this could not only damage your reputation as an agent but could put considerable strain on your agency. Landlords are well aware that a letting agent offering low fees will be cutting operational cost else where which could result in their property not being advertised properly or tenancy agreement not being executed correctly due to a junior member of staff with little experience dealing with the set up. Most agents will agree that there is a lot more to letting property than simply advertising it in the local paper. A lot of time is spent preparing brochures, conducting viewings, vetting prospective tenants, setting up agreements, conducting inventories and checking in tenants. All this of course costs money to do properly and takes a considerable amount of time & resources. Landlords will naturally want to keep their costs down and you will always find customers wanting a competitive rate. However, agents offering landlords exceptionally low fees face the risk of lower profit margins, which will make it hard if not impossible to survive the credit crunch.Generally fee cutting tends to prove unprofitable, unsustainable and even costly, which could cause your agency to fold. When landlords choose an agent they do not base their decision on price alone, but also consider experience, reputation, professionalism, qualifications, marketing budget, to ensure your agency attracts a large number of tenants through its doors and overall service. If you feel your agency needs a competitive edge try to focus on other areas of service rather than simply price. For example you could consider a sliding fee for landlords that place more than one property with your agency, or you could add value to your charges by offering a service or product that costs your agency little or nothing to set up or provide. You could even consider offering a bundle of useful information to new landlords explaining everything a landlord should know before letting their property. In the current climate with a number of non experienced home owners renting out single rooms to full houses there is no better time to create a helpful first impression of your agency; in the long run the home owner should return to you to let their property. To sum up, there is nothing wrong with healthy competition and being competitively priced, if your agency is able to offer a service towards the cheaper end of the market then do so. Bear in mind there are many companies that target high end consumers and make substantial profits. If you’re going to cut your prices then do so in moderation and avoid cutting your throat.Benjamin Perry CEO of online-lettings.co.uk The Specialist lettings website where you can find a local <a href="http://www.online-lettings.co.uk" >letting agent</a> and view <a href="http://www.online-lettings.co.uk" >flats to rent.</a>
Source: www.ArticlePros.com
