Monthly Archives: March 2017

IN THE GRAND SCHEME OF THINGS

Prescon Realtors & Infrastructures Private Limited

Are you seeking a new abode? Fret not, as developers are offering unique customer-friendly schemes and incentives that you can leverage upon to seal the deal, say experts

Attractive freebies, exciting offers and attention grabbing payment plans ¬ are some of the key in centives being offered by the developers in order to entice the home-buyers and make their homesearch easy. Amit Parsuramka, CMO, Omkar Realtors says, “Developers tend to dole out a variety of offers to their potential buyers so that they invest in their respective projects. And these exciting deals are to hook the interest of the buyer and cash in on consumer psychology.“

Experts are of the opinion that the realty market is witnessing an unremitting sluggishness and thus, the need of the hour is to instill confidence in the buyers.“Ever-increasing inventory, funding issues and low sales, are key reasons. It is but natural for real estate developers to offer various schemes to entice the buyers in order to overcome the slack,“ says Vihang Sarnaik, director, Vihang Group.

FREEBIES, ON OFFER:

Interestingly, developers are getting creative with their offers with each passing day. While some are offering early bird bumper prizes on bookings for the first few flats, some are giving away all-expense paid domestic and international tours. Subvention schemes, differential payment plans, discounts on per square feet rate, discounts on premium charges and fully-furnished flats with white goods among others, are some of the many incentives offered by the builders.

Apart from these schemes, developers are also seen offering waivers on floor rise price, stamp duty and registration cost for limited periods. Sometimes, builders also offer to pay the rent. Freebies like free parking, car, fur niture, kitchen cabinet, club membership are also quite popular.

SUBVENTION SCHEMES:

“Some of the very popular schemes in the market are lower EMI home loans and attractive payment plans such as 20:80, 10:90:10, 5:95, etc,“ adds Parsuramka. These are known as subvention schemes, where the home-buyers have to make a payment of a smaller percentage mentioned in the ratio and the remaining would be funded by the bank, after it has approved the home-buyer’s eligibility to return the loan. In this case, the EMIs commence on possession or any time-frame that is suggested by the developer. However, registration of the property is compulsory in these cases.

Property consultants mention that these schemes are particularly attractive to endusers and have been quite successful in swinging irresolute buyers towards a purchase commitment. Most projects offer these schemes in the pre-launch or launch stages and they are a good way for developers to raise money for construction. “What buyers need to know while opting for such schemes is that in these, most developers charge higher per square feet (psf ) prices compared to the rates offered in construction-linked payment schemes. This is because the developers need to pay interest to banks and therefore, charge the customers a premium to compensate for this,“ says Ramesh Nair, CEO and country head, JLL India.

GUARANTEED RENTALS:

Another very popular scheme in the market is guaranteed rentals to buyers, either until possession or post-possession for a good twothree years. “This is a scheme meant to attract investors, who are in the market for incomegenerating assets (which they will not occupy themselves). Only a few builders offer this scheme and it has been noted that the lumpsum amount of 24-36 monthly rentals, is actually a discount that the developers offer their customers. In fact, this is an interesting example of how developers disguise discounts,“ adds Nair.

IN CONCLUSION:

Buyers invest into a property for security reasons and also because it’s the only asset that appreciates. And since most home-buyers make an investment once in their lifetime, they would want their homes to be delivered to them on time and since, that has not been happening lately, the buyers are moving away from the market. “Hence, developers are coming up with exciting offers so that they can lure the buyers back. And this is proving to be a winwin situation for buyers and developers,“ concludes Faiyaz Rangwala, director sales and marketing, Kanakia Spaces.

3 BHK SPACIOUS FLATS IN RAM MARUTI ROAD, THANE Contact PRESTIGE RESIDENCY sales office to Know More @ 022 25985951 – 55

201, Prestige Precinct, Near Nitin Casting,
Almeida Road, Panchpakhadi
Thane West – 400604

Phone: 91-22-25985951-55

Email: prescon@prescon.in

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LOAN AGAINST PROPERTY : WHAT YOU NEED TO KNOW

Prescon Realtors & Infrastructures Private Limited

While Loan Against Property Is A Cost-Effective Option For Raising Money, You Need To Assess All The Risks Involved In The Execution Of The Funds

Recently, Loan Against Property (LAP) Has Emerged As A Popular Form Of Long-Term Loans, Especially Among The Self-Employed. According To A Recent Report From CRISIL, This Loan Category Is Expected To Grow 22% Annually Over The Next Four Years. However, There Are A Few Points Borrowers Should Keep In Mind.

Key Features

As Opposed To Personal Loans, The Interest Rate On LAPs Is Lower Since It Is Secured Against The House. The Interest Rate Ranges From 11.5-15% Per Annum And The Tenure Is From 1-9 Years, Which Can Be Extended Up To 15 Years, Compared To Only Five Years In The Case Of A Personal Loan. Also, You Can Receive The Loan Amount Lumpsum Or As An Overdraft Facility.

Before Sanctioning The Loan, All Financial Institutions Will Check Your Income, Debt-Servicing Obligations And Your Credit Score. “LAPs Are Given On Freehold Property And The Owner Must Have A Clear Title To It,” Informs Rajan Ahuja, Director, Realty & Verticals, A Gurgaon-Based Real Estate Consultancy. To Reduce Risk, Most Banks Offer Loans Up To 50-65% Of The Value Of The Property, While Some Non-Banking Financial Companies (NBFCs) Go Up To 75%. The Processing Fee Ranges From 0.5-1.5%. Loans Are Approved Only When The Self-Employed Can Show An Earning Track Record Of Three Years, Usually Via Income Tax Returns.

Advantages

LAPs Allow Property Owners To Monetise An Idle Asset. Loans Can Be Taken Against Both, Self-Occupied And Property That Has Been Leased Out. The Tenure Of An LAP Is Longer And You Can Also Get A Larger Amount As Compared To A Personal Loan, Which Cannot Exceed Rs 10 Lakhs.

Disadvantages

The Key Risk In An LAP Is That You Could Lose The Property You Have Borrowed Against If You Default On The Loan Payment. Also, Unlike A Home Loan, There’s No Tax Benefit To The Salaried Individual On The Principal Amount And Interest Paid.

Points To Remember

Before Taking A Loan, Assess Your Cashflows And Repayment Capacity. “People Often Take An LAP Because It Is Cheaper But Deploy It In Avenues That Are Risky,” Points Out Vishal Dhawan, Chief Financial Planner, Plan Ahead Wealth Advisors. Taking This Loan To Start A New Venture, Could Be Riskier Than If The Money Is Used To Expand An Established Business. If You Default, Your Credit Score Will Be Affected, A Penalty Will Be Charged, And In The Worst-Case Scenario, You Could Lose The Property.

“People Tend To Put At Risk An Asset That Is Worth Much More, For A Loan Of A Smaller Amount,” Points Out Dhawan. For Instance, A Home Worth Rs 5 Crores Is Put Up As Security For A Rs 50 Lakh Loan. Instead, Explore Taking A Loan Against Share Certificates, Insurance Policies, Gold, Etc. Sometimes, Businessmen Opt For LAPs To Avail Of Tax Deduction On Interest Paid. “Borrowers Must Get Good Tax Advice. The Funds Have To Be Clearly Identifiable As Having Been Deployed For The Expansion Of The Business To Be Able To Avail Of The Tax Deduction,” Informs Dhawan. Finally, If You Expect Some Cash Flows Soon, Take The Loan As An Overdraft Facility And Not As A Term Loan. Whatever Surpluses You Get Can Be Parked In The Overdraft Account. This Will Enable You To Lower Your Interest Cost.

3 BHK SPACIOUS FLATS IN RAM MARUTI ROAD, THANE Contact PRESTIGE RESIDENCY sales office to Know More @ 022 25985951 – 55

201, Prestige Precinct, Near Nitin Casting,
Almeida Road, Panchpakhadi
Thane West – 400604

Phone: 91-22-25985951-55

Email: prescon@prescon.in