Buying a house in an upcoming locality? Here are five things to watch out for

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The real estate cycle is turning and many have started firming up plans to purchase properties for both self-use and investment purposes. While a few prefer to buy in ‘well-established’ locations, there are many who may want to buy properties in ‘upcoming’ localities. If you are looking to buy one in an upcoming locality then here are some factors that you need to keep in mind.

Know the trigger

Start with assessing the trigger that led to the new development of the area. The trigger could be a new airport coming in that area or a new administrative center being erected. You should gather the details as it will help you understand how the area would develop in the future. You should also make an assessment of the type of properties that will remain in demand in case you would like to exit in the future. Though it is too much to expect all infrastructure facilities in an upcoming area, such as connectivity, internet, schools, offices and social infrastructure in place from day one, you should study the development plan. Otherwise, you will have a tough time enjoying your property.

Check developer antecedents

When a large project or any other trigger for the development of a new area is announced, many landowners in the area turn developers overnight. This is a tricky situation. These do not have any execution experience and it is risky to buy a proposed property from them, even if it is in a good location. Even if some of them may get themselves registered under RERA and with the town planning authority, you need some assurance about the timely handover of your property.

Stick to large developers. These developers generally create social infrastructure as well and prefer to build large townships than standalone buildings. They are not only more likely to deliver on timelines but also offer good quality properties as promised.

Site visit is a must

Though you may conduct all the due diligence and spot a good project of a reputed developer at a good location, you should not rely on virtual site visits. Property buyers too find it convenient to book properties sitting at their homes. The sales pitch is also loud and many buyers are lured into investing in faraway places thinking that it would be a good investment. However, this should be best avoided. Do physically visit the property location. It will help you understand the ground situation. Many a time, site visits tell us a lot about the surroundings and the connectivity which may not be told to you by the developer. Also, developers tend to promise a lot of future infrastructures. By visiting such locations you can figure out the gap between what is available today and the future. You can set your expectations right.

Assess price differential

Compare the price of the property in the context of the amenities promised. The RERA website can offer some information about various projects. Also, check with local brokers before going ahead with your booking. Often, developers are willing to offer discounts to buyers for construction-linked payment plans over subvention schemes. Do ask for details and compare the effective prices. Do engage an advisor if required, especially if you are going to fund the property with a home loan.

Prepare for the long haul

Though the government and town planning authorities announce many plans with aggressive timelines, the on-ground execution may take longer. Do factor in such delays. Even if the developer delivers the property on time, the real potential of the property may be realized much later. As the trigger that led to the new development takes shape and more people shift to the upcoming locality, prices and rents adjust upwards.