Properties, Homes & more

A small village located on the border of Uttar Pradesh and Haryana (both Indian states) is proof of how important Bollywood is to India’s mindscape. Ever since teaser advertisements of actor-producer Aamir Khan’s latest offering, Peepli Live, started being beamed on TV, land prices in the picturesque stretch of farmland have started going up. The village’s only claim to borrowed fame is that it is also called Peepli.

The Bollywood angle to real estate fortunes is not a new one. Prices of flats and areas tend to shoot up when a Bollywood celebrity stops by. Wai in Maharashtra’s hinterland became fashionable after film-maker Prakash Jha shot one of his rural masterpieces (Mrityudand) there. Similarly, flat prices in La Mer building at upmarket Bandra soared after cricketer Sachin Tendulkar and actor Aishwarya Rai bought flats there.

However, the latest episode of Bollywood magic can be seen in Peepli. In the last one month, inquiries for the purchase of farmlands have gone up. Ditto with marriage proposals for bachelors. The demand for land in Peepli is good, fetching higher prices than other neighbouring areas. There is a 33% jump, from Rs 20 lakh per acre to Rs 30 lakh.

Bhopal has also been affected by Bollywood, post-Raajneeti. In Mumbai, according to real estate agents, the buying rate of a “celebrity building” is often hiked even if it is artificially inflated in some cases. After Kangana Ranaut bought a penthouse in Bandra, the rate of the building shot up by 15%. Ad film-maker Prahlad Kakkar recalls how the rates of La Mer, where he stays, increased after Tendulkar and Rai moved in. He said, “Overnight, the rates shot up by 25%. I feel the reason was more to do with the free security that the building got. Sachin has a Z-security cover.”

But the Bollywood lift to the real estate market has its downside too. For instance, the death of a celebrity severely affects the rates of the house. After actor Priya Rajvansh died, it was difficult for her brother to sell the house; and the flat in which producer Neeraj Grover was murdered allegedly by navy man Emile Jerome and aspiring actor Maria Susairaj finally had a distress sale. It is also alleged that no one wanted to buy the flat in which Ramgopal Varma shot his horror film Bhoot. Most of these flats have to be sold at distress prices and often, they are only bought by those who are interested in them as an investment and don’t plan on staying there. Families will never buy such homes because they feel they are jinxed.

A real-life version of “Khosla Ka Ghosla” is being played out with an increasing number of non-resident Indians (NRIs). The Ministry of Overseas Indian Affairs (MOIA) is being flooded with increasing complaints of illegal / fraudulent real estate deals and encroachments. In fact, with the recent Satyam scam casting its shadow on Maytas Properties, apprehensions amongst overseas investors has deepened.

It should be noted that property dispute is one of the most frequent complaints by NRIs. They are unable to protect their property due to long absences or lack of awareness of laws. The largest number of complaints are from major real estate markets like Delhi, Mumbai, Bangalore, Andhra Pradesh, Kerala and Punjab.

The nature of the complaints are mainly protection of property that has been forcibly occupied or encroached, dispute relating to division of property or inheritance and cases where investors have been cheated by real estate developers.

What actions are being taken by Government?

A minister from MOIA has mentioned that, following this flood of complaints, he had written to state governments asking them to appoint nodal officers for civil, judicial and police matters. These nodal officers are independent from NRI cells that are dedicated for issues related to financial or welfare interests of overseas Indians. The ministry has also planned a session on property disputes at the Pravasi Bharatiya Diwas in January 2010. The purpose of the interactive session is three-fold: allowing NRIs to invest safely in realty, putting in place an institutional mechanism at the state-level for property related disputes and providing a channel for credible information relating to property and inheritance laws.

In a recent survey by Reuters, More than a quarter of Americans currently renting houses and apartments have no intention to ever buy a home!

The survey, by real estate search site Trulia.com, found 27 percent of renters do not plan to ever buy a home. Although 72 percent still expect to buy eventually, that proportion is down from 77 percent six months ago.

Of those who do hope to become homeowners, two-thirds say they will wait two years or more. This reluctance to buy could drag out the real estate market’s slump longer than many have predicted, Trulia said.

Renters converting into buyers are crucial to turning around the housing slump, but the current economic crisis is causing people to become very hesitant to get off the fence and buy a home. Among the factors affecting sentiment: Renters are unable to save for a down payment, or they are waiting to get a new job or for mortgage rates to go even lower. Trulia’s online survey of about 2,000 Americans was conducted by Harris Interactive in late July.

We have seen one of the worst recessions of the century for real estate industry. The prices sank to all-time lows, with returns dipping below investments. However,post mid-2009, the property market has regained momentum - not only in India, but also around the world. Almost every metro across the world has witnessed a surge in property sale / lease. Especially, Mumbai, Hong Kong, Singapore, London, and New York. When it comes to London, I can dream of fantastic palatical bungalows situated in some of the most beautiful premises one could imagine. But getting a property in London is equally difficult. The most important criteria for property, especially in Central London, are: Money, Money, and Money.

London property, be it residential or commercial, does not come cheap. And where there is huge money involved, fraud automatically follows. One should be utmost careful while buying / selling / leasing real estate in metros, especially like London. Hence you should always take assistance from expert agencies / brokers - The London Property Buyers (TLPB) is one of these who will provide genuine advice and assistance is all kinds of dealings in real estate in and around London. Promoted by Laurence Moore, this family business is one of the proud members of National Landlords Association of the UK, which in itself is a proof of ethical business practices! TLPB buys directly from individual sellers for cash, so that there is only one entity throughout the deal. No middle men, no hidden charges, no fees… only complete satisfaction and value for money. TLPB can not only assist buyers/sellers in repossession of real estate, but can also offer expert help in various allied areas  like Stop Repossession, Probate & Inheritance, Relocation, Debt Management, and Personal emergencies.

The process of TLPB is simple. As a first step, TLPB will offer you expert advice on appropriate properties for you depending on your requirements. After the detailed discussions, and only after you’re satisfied with the real estate offered to you, the deal - cash for homes - is cracked. And the final step is that you get 100% peace of mind since there is no fishy business out here with TLPB. By choosing TLPB, one can be assured of utmost professionalism, transparent business practices, speed and flexibility, and peace of mind for everyone. If this is not enough a kick for you, you should call TLPB directly at +44.0800.879.9889 and experience the pleasant change! The rule of thumb is: If you want to buy/lease/sell property quickly, turn to TLPB.

Ramakant lives in a 3 BHK flat in a posh Thane apartment. He had purchased the property around 1.5 years ago for Rs 60 lakhs. Today, the cost of the apartment is almost 1.5 times original price. With an (2 times) increase in his pay package, Ramakant is sure he can save some additional money every month. He is contemplating on buying a second house. Is this a wise decision?

Discussion…

Correction phase

In today’s times, the realty sector can be best described as in a correction phase. Ideally, this is the best time to invest in property.

Easy home loans

A few years ago, procuring a home loan was quite difficult with lot of administrative hassles, government hurdles (or red-tape), and high interest rates. People could buy their own homes only towards the end of their careers when they had saved enough (PF) money. Things have changed considerably over these years. If you are a salaried individual of today - employed with a large, reputed firm - and have no history of previous loan defaults, getting a home loan is absolutely simple for you.

Nowadays, the lender decides on your housing loan eligibility after considering factors like age, income, educational qualification, repayment track record and credit history. Interest rates have dropped down to single digits. You can, in fact, shop around for the bank that offers you the best deal!

Tax benefits

If you have acquired a second home, the principal paid on both the home loans, will be eligible for deduction under Section 80C, subject to the overall cap of Rs 1 lakh. The entire interest repaid can be deducted from your taxable income for the second house. Only one of your properties can be shown as self-occupied. In case of the second property, actual or notional rental income has to reflect as additional income earned. You can deduct 30 percent from this rental income towards maintenance charges. Municipal taxes can also be deducted from rental income.

Rental income

The rental income that a second property can fetch is a major factor that many buyers take into consideration. This rental income can help pay off a large portion of the EMIs. If the property is closer to the heart of the city, the rental income could be higher.

Conclusion

Considering all above parameters, it seems to be a wise decision for Ramakant to buy a second house, provided he can assure himself a decent cash flow after purchasing the second home.