Planning to invest in land? Choose right location (09 Nov, 2009)
If you are thinking of investing in land to diversify your portfolio, make sure that you choose the location wisely. Location is the sole indicator to make your investment a lucrative one in these times. Across cities, there are a number of locations that can be looked at for offering attractive returns.
According to global real estate consultancy, Cushman & Wakefield (C&W), Gurgaon and Noida in Delhi NCR have some good options especially with these cities continuing to gain in economic prominence. In Mumbai, plots are hard to come by, so nearby areas such as Karjat and Igatpuri will offer attractive returns.
South Chennai has good investment areas beyond Tambaram as they are witnessing strong infrastructure impetus and potential economic activity. And if you are looking at Bangalore, locations in the north of Bangalore, especially in and around Devanhalli region, where there is anticipated commercial development, existing airport and other infrastructural developments, are a viable choice.
Shveta Jain, national head, marketing and investment, residential, Cushman & Wakefield India, says that in residential plots, it is important to take into account the local market and local factors before making an investment of any sort.
"The budget is also important as rates can vary to a large extent depending upon the corner plot, road width etc. Across India, gated communities are a safer and more viable option when risk of encroachment and available infrastructure is taken into account, as these provide the basic requirements such as power back up, ample security and other amenities while having ones own piece of land and home."
So what exactly is the demand for plots in the present scenario? The demand is essentially for plots in the range of 200-500 sq yards, feels Jain.
"Investor demand has started to pick up in the recent past as recent launches for plots by renowned and established developers has seen good absorption, indicating a reviving market. But investing in plots is a long-term strategy and investors need to be patient and have a 5-7-year time horizon to fully capitalise their returns," she says.
Developers say one should buy land depending on his or her use of the land. "If the purchase of land is for future use then the buyer should look for a place away from the main city. But if people want to buy land in integrated townships, the options are aplenty. When buying in townships the buyer can be more sure of the land being dispute free," feels Vijay Jindal, CMD, SVP Group.
The developer is a part of the consortium of 13 builders at Rajnagar Extn (NH 58) where currently 150 acre of land is under development.
The consortium will build around 7000 flats by the end of year 2012.
If you are looking at more options in Delhi NCR, locations such as Noida, Gurgaon, Faridabad, Greater Noida are a good bet, according to Manoj Goyal, GM, strategic planning, Raheja Developers.
"These places are the hub of real estate activity in NCR and prices of plots are still reasonable. A good sized plot ie 200 sq yards is still available between Rs 40-60 lakh in these cities."
The developer is coming up with a plotted colony on 143 acres of land in Sohna, 25 km from Gurgaon city in the next 4-6 months.
Dont, however, invest without checking on basic facts. Checking the title deed and documentation is an absolute must so that your land is free from any legal disputes.
"Many developers are collecting money by doing registration at cheaper price even before acquisition of the land and approvals with a option to buy back. The buyer should not invest money in these kind of projects," warns Goyal.
In the case of pledged land (land bought with a loan) or multiple owners, it is advised to get a release certificate, adds Jain.
"A no encumbrance certificate should also be sought out in order to verify ownership and that no mortgage or payments are outstanding on the plot. It is also advisable to get the land measured and a valuation done if possible or if budget permits."
Make sure you take care of the nitty-gritties. Ensure that nothing comes between you and your land acquisition! Grab a deal.