What Defines Promising Real Estate?

By Jay Dee Infra In Real Estate Investment No comments

What Defines Promising Real Estate?

First time buyers of real estate often mistake either expensive or cheap real estate as the promising one. However, expert advisers do not see promising properties in terms of prices but in terms of livability that includes physical, civic and social infrastructure. Think of a place where there is no proper drainage or water supply in the area and the nearest house is around 5 minutes-walk away. Wouldn’t living in such a locality be a nightmare for you, no matter how expensive it was?

The idea behind a promising piece of property isn’t its price, but the facilities available. How would you like to live in a flat worth Rs 2 crores and travel 10kms to reach the nearest mall or shopping area? In fact, the amenities that are available close to an area often determine the price.

Various facets which determine the promising Returns & Liveability of real estate.

Physical Infrastructure

An area’s liveability depends heavily on the physical infrastructure available- roads, mono rail, metro rail and local trains etc. Most home buyers do not own cars which is why the availability of physical infrastructure is very important. A lot of areas have seen a hike in the price of the property once a new form of physical infrastructure was made available. For instance, property prices in Ghatkopar West went up by almost 50 percent in 3 years when the Versova-Andheri- Ghatkopar Metro Railway’s construction began. After the beginning of operations, it was estimated that in the coming six months, the prices would increase by 10 to 15 percent more.

At the time of buying property, buyers should focus on properties where infrastructural developments have already begun rather than be stuck at the proposal stage. Proposals are often scrapped or altered, which is why it is better to opt for a locality which is already under development. Those investing in the outskirts must bear in mind that it may take up to 10 years before the area becomes liveable. Several industrial corridors have been planned in Chennai, Nashik and other areas which make take quite some to become functional. If you are thinking of investing in them, you have to be patient.

promising-real-estate

Civic Infrastructure

It is not only enough to have easy avenues of commutes to make an area liveable- it also has to have a proper civic infrastructure. Drainage, water supply and electricity are some of the top priorities for a residential property buyer. Some areas have good connectivity with other areas of the city, but suffer from lack of water supply and drainage. Studies have shown that almost 50 percent areas of Bangalore and Hyderabad have a water crisis.

Madurdaha, a locality in South Kolkata has good potentials for investors as it is serviced by the Shahid Khudiram Metro Station and Pranabananda Road and Garia Station Road act as paths of communication to the rest of the city. Hospitals such as ‘Medica Speciality Hospital’ and Peerless Hospital are close by. Despite having such good physical and social infrastructure, residents of the area suffer for the lack of civic infrastructure. Drainage is a severe problem in the area and has led to an outbreak of dengue in the locality.

Unless the physical infrastructure of an area is developed, it would be difficult for buyers to live a comfortable life in their houses or apartments.

Social Infrastructure

Most micro markets across cities have these amenities available as cities have expanded and it would be very difficult for citizens to travel 14-15 kms to reach these essential amenities. The walk to work culture has further boosted this trend- more people live near their work place to save time taken to commute and money spent on it. This has strengthened the social fabric around workplaces as well. For instance, upcoming housing communities have a hospital within their premise along with schools and shopping centers to make everything more accessible to residents.

Satellite townships which are coming up nowadays, such as Palava City near Thane, have these amenities planned within the community.

Possibility of Appreciation in Future

For instance, properties along the Old Mahabalipuram Road in Chennai or the ones that are coming up near Marathahalli or Electronics City in Bangalore have a higher possibility of price appreciation in the future.

The possibility of appreciation in prices often depends on the availability of land parcels in the area and constructions that are coming up. Areas such as Andheri West in Mumbai and Pune’s Aundh, have reached saturation in terms of pricing as well as the density of property. As an investor, you do not stand to gain much as property prices won’t fluctuate. However, in localities like Ghodbunder Road in Thane, a satellite city of Mumbai, price appreciation takes place in leaps and bounds as the locality is yet to develop perfectly and there are plenty of land parcels available for development. A similar story can be observed in Balewadi or Kothrud in Pune.

Consider these factors before you buy an expensive property in your city thinking it to be promising.

What Defines Promising Real Estate?

Source: http://blog.indiahomes.com/defines-promising-real-estate/

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