Precaution to be taken on Making a Smart Property Deal

Property is an asset that is bought as well as sold with due care. Taking property decisions is not an easy task especially when the Real Estate Market suffers a lot of ups and downs. Whether you are a buyer or a seller of property it is imperative for you to act smartly while dealing in property matters.

While selecting property following question should come in mind of the people engaged in the Real Estate:

• Is the time right to buy or sell property?
• Is the location perfect?
• Will the price of the property hike in the near future?
• Should I wait for some more time? etc.

The list of confusion and questions that popup in the mind is never-ending. So, how to deal with it, what steps should you ensure to clear up these dilemmas.

We present you with some useful tips that will assist you in making a smart property deal.

1.       Carry out a thorough market research and carefully examine the growth as well as depression in the economy. The economy conditions directly influences the property markets. In times of high property rates it is always better to sell whereas depression time is the buying time.

2.        Increasing and decreasing interest rates of home loans in India should also be taken care of.

3.       If you have a property that is solely for investment basis then it is always advised to hold it for few years.

4.       The legal issues related to the property should be carefully checked.

5.        Also, the property and broker agreements should be transparent enough.

6.        There are numerous banks and finance companies that offer loans so you must explore different options before opting for one.

7.        For those investing in developer projects, credibility of the developer should be considered: actual location, construction time line, amenities provided, etc. must be kept track of.

Assistance of a Real Estate Agent can be taken in order to analyze the Real Estate Market situations and choosing the right location. Thus following the above tips shall certainly help you enter an appropriate and smart property deal.

Note: The best way to enquire for a property and reputation of builder in internet which is readily available.  

Income Tax Exemption on housing loan

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Difference between Systematic Investment Plan (SIP) and Systematic Transfer Plan (STP)

Systematic Investment Plan (SIP):

SIP is way of investing in Mutual funds monthly, where a fixed amount of money is invested in Mutual Fund. The SIP amount is debited from once bank account on specific dates (as set by investor). So, if investor wants to a SIP of 1,000 for 1 yr, it means that every month on a fixed date (chosen by investor) 1,000 will be invested in a Fixed Mutual fund of his/her choice. For small investor it is advisable to enter in stock market through mutual fund SIPs, Investment in SIP could be done together with systematic transfer (STP) from fixed-income schemes would be the best options as it will generate good returns over a long term.

Systematic Transfer Plan (STP): 

 In case of SIP, the amount is debited from your bank account for a new investment every month, while in case of in STP, the amount is transferred from one mutual fund scheme into another.

Investment by way of STP could be the best option when one wants to invest big lump sum money in stock market, as market is volatile and can go up or down very soon, so there is always a risk of losing a big part of investment, if after investing market goes down. As an investor everyone wants to minimize risk and get decent return. Hence, in STP lump sum amount of money is first invested in a mutual fund probably in debt fund and then a fixed sum is transferred from that mutual fund to another fund.

In case of SIP fund is monthly transfer from bank to mutual fund, whereas in case of STP fund can be transfer weekly, monthly or quarterly on the choice of investor.

Working of STP is in the way that, all money is actually invested first in a Mutual funds itself (probably Debt) and units from mutual fund in which money is first invested are sold every month and reinvested another Mutual fund (probably Equity) or vice versa.

Also, while there is no entry load for SIP, you may have to pay switching charges for STP.

Highlight points on STP

When to invest in STP:

 Investment in STP by way of DEBT to EQUITY is done when markets are very volatile and one don’t want to take risk with your money in a short span of time, This is still better than putting money in Bank and doing a SIP, because at least you money is earning some returns on debt part in STP.

When not to invest in STP:

When the markets are in rising trend i.e. at the end of correction in market, in that case STP will not deliver the best returns like SIP, one time investment is a good choice in that case. But then you never know that when will markets start go up. But mainly in case of retail investor as they do not have all tools and time to research the markets, it’s not advisable to invest lump sum in any case.

   

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