Save on premiums

A common practice among real estate agents is to pitch every property as prime location. Many influence the buying decision by stressing the importance of proximity to public transport, hospitals, schools, and so on. Typically, each such location fetches a hefty premium in the 10-15 per cent range, which can offset your budget substantially. For instance, a Rs.1 crore flat could be Rs.10-15 lakh cheaper and in the same area sans the premium tag attached to it.

Location:

One can easily save such additional and unviable cost in the name of prime location, if one has their own vehicle, because in that case, it does not matter if you are 2 km from the main road. The benefit of being located close to a market is also loosing the charm because almost everyone offers home delivery these days. It goes the same with proximity to schools and colleges, considering schools providing transportation in most cases.

Floor selection:

In some parts of the country, there is a premium for a flat in the lower floors as one can avoid the stairs. Considering most properties offer high speed and quality elevators, there is little reason to pay premium for a flat in a lower floor. The reverse is equally true, where one pays premium for a higher floor, in places like Mumbai for it offers a better view of the city.

If you are wondering why you should stay a couple of kilometres inside from the main road instead of the prime location, you are not alone. There are many who feel that the additional 2 km will anyway cost them more fuel to commute permanently, but that is not the case. The fuel expenses are marginal, even when taken for a long period as compared to the cost of investment. Moreover, with metro connectivity turning out to be a reality in several Indian cities, commuting will only get better and time saving.

When premium counts

But, there are still some instances when paying a premium makes sense. However, these are for amenities that are available and worth the premium tag. For instance, one should pay premium only for modern amenities and facilities like club house, swimming pool, gym, sports facilities, garden, community halls and guest rooms. Typically, a combination of all these facilities will be used by a family and could cost Rs.3, 000-Rs.5, 000 a month if the family were to go elsewhere and pay for the use of such facilities.

So, the next time you are on the lookout for a house, evaluate a property based on the actual premium facilities than ones which are not as premium as the friendly real estate agent may want to project it. Not only will you be utilising your money better for your dream home, you will also be saving some money on the EMIs, which play a big role as the key form of funding real estate for home buyers nowadays.

 Independent Financial Associates Network is a web enabled distribution platform of IFAN Finserv Pvt. Ltd (ifan.co.in). 

olmdesk@outlookindia.com