Guidance for Residential and Commercial Property

Archive for the Real Estate Market Category

Essential Tenant Screening Steps

Feb11 Filed Under Real Estate by Linda Rolandis Property crimes are at an all time high in today’s world, and landlords need to feel they can trust the person they are handing the keys over to. Tenant fraud involving property damage, unpaid monthly payments, false credit reports, and criminal activity has increased exponentially over the last few years. Tenant screening is an essential step in order to feel safe and trust the identity and record of the renter. Proper screening involves several steps, which will be outlined below.

1. Obtain adequate identification from the tenant. This step is a first round screening attempt to match the entries on the rental application for verification. Names, addresses, social security numbers (where applicable) should match and be double-checked for accuracy. Adequate identification includes drivers licenses, birth certificates, or a valid US passport.
2. The rental application is extremely important and should include these essential fields: Name, current and previous addresses, primary and secondary phone numbers, work and salary information, and bank accounts. It should also include information pertaining to the tenant’s credit history and/or their ability to make the monthly payments based on salary and debt information. Furthermore, the application should contain two references who can be contacted for further screening and verification.
3. Obtaining a tenant background check is one of the most important actions a landlord can perform. These reports provide a detailed list of criminal activity, nationwide arrests, and sex offender status. They also detail the tenant’s personal information which should be compared to the rental application for accuracy. These background check reports should also detail previous addresses, employers, and alias information. These reports should also be compared to the rental application and verified for accuracy. This information will alert the landlord to any forgery issues.
4. The last important factor involved with tenant verification is a credit history report which should be included in the tenant background check. Credit history records will report late payments, bankruptcies, and will also give specific addresses of residence. Credit history information should play a major role in the decision-making process. Landlords today are generally not responsible for the fees associated with the background checks. It is very common in the real estate market today to include these charges in the rental application fees. The tenant should be aware of the charges and what they are being used for. It is their right to know.

If there are any complaints, then the landlord can make a responsible decision as to the character of the individual as this may also be used as further tenant screening. Nowadays, you cannot rely on intuition to properly screen a potential renter. There are numerous resources such as tenant background checks, as explained above, that you can access to effectively allow you to obtain all of the information you need. In today’s world, good renters are hard to come by, and you need all of these tools to make an educated decision and to potentially save you thousands of dollars and hours of heartache. Tenant screening is not difficult, yet the reward is knowing that you and your family, as well as your property, are safe and secure and away from harm. About the Author: Guard yourself from tenant fraud. Get a tenant background check today! Avoid the loss of time, money, and property value. Find out how to prevent the common pitfalls with proper tenant screening .Comments

Home Condos

A new 13-unit, eco-friendly condo complex is aptly located on Green Street in Jamaica Plain across from the Southwest Corridor Park and an Orange Line T stop.

Called Bartlett Square, the so-called transit-oriented development extends the upscaling of a former industrial/commercial enclave that’s home to many artists, located a half mile down Green Street from JP center and near Egleston Square along Washington Street.

What’s different about this project, besides the energy-efficient amenities — including solar panels on the roof — is that it offers a range of options. There are one-bedroom condos that start at $320,000, two-bedrooms starting at $400,000 and even a three-bedroom duplex with private decks for $660,000. The complex also features three retail spaces along the ground floor, one a 2,400-square-foot area ideal for a restaurant that would feature a patio overlooking the Southwest Corridor Park.

With the project due for completion next month, seven of the residential units are already spoken for, but there are still six of the one- to three-bedrooms available.

Developer Maple Hurst Builders has incorporated green technology into all aspects of the brick building, including photovoltaic solar panels that will provide electricity for the common spaces and a sedum-planted roof to help runoff. There’s blown-in icynene insulation, high energy-efficiency windows and a hydro air heating and cooling system, EnergyStar appliances, heat recovery ventilators and even an eco-friendly Kone elevator made of 95 percent recycled materials and using only a third of the power of regular elevators.

We looked at Unit 305, a staged one-bedroom plus study condo with 840 square feet of living space that’s on the market for $360,000.

The exterior of the building is brick with decorative tin zinc shingles in one corner and white Hardiplank in the rear. A dedicated entrance leads up to the residential units on floors two through four, along carpeted hallways with sconce lighting.

Unit 305 opens into an open kitchen/dining/living area with oak floors and two closets with built-in shelving. The overhead and sconce-lit living room has crown molding and three windows with views out to the Southwest Corridor Park and out to Back Bay. The dining area has track lighting.

The adjacent recessed-lit kitchen features 15 cherry-wood cabinets, green Del Mare granite counters and EnergyStar-rated stainless-steel appliances, including a Maytag refrigerator and a Frigidaire dishwasher and four-burner electric stove.

Next to the kitchen is a study area with hardwood floors, overhead lighting and a built-in bookcase.

The hardwood-floored bedroom has crown molding and two windows with park and Back Bay views. There’s a large walk-in closet with built-in shelving plus a hookup for a stacked washer/dryer.

The adjacent bathroom has a beige limestone tile floor, a Cafe Forest granite-topped vanity and a large soaking tub/shower with white subway tile walls.

The more expensive units have marble baths and an upgraded Bosch appliance package.

Unit 305’s estimated $300 condo fee will include heat from the central gas-fired hydro-air heating and cooling system.

Parking spaces in the building’s underground garage cost $20,000 extra, and there are 40-square-foot storage areas on the first floor available for $5,000.

Trends shaping the property market

Image That Represents the Real estate trend.

Image That Represents the Real estate trend.

Demand for office and residential spaces

It is expected that GDP growth will enable expansion and also attract investment the need for office space has increased by over 20% since the previous year because banking tenants have renewed interest and technology companies are also looking at expansion. With the increase in entrepreneurship and the related ecosystem in India, this has had terrible effect on multiple sectors which also include office space. In the last five years, co-working spaces have seen progress and now have over 200 players in this segment. There is also been a demand for residential housing especially with the growth in population and urbanisation. With the increase in nuclear families and disposable incomes demand for housing is only set to grow. There have been issues with sales mostly because of mismatch of prices. Home developers are putting in effort to sort the sizes of residential units to meet the both of the buyers. Buyers nowadays wish to make informed decisions. And now that the government is also focusing on housing that is affordable we can expect to see some traction in this segment.

Consolidation

With all the financial mess that is there, small players are seeking help from reputed players to help them complete their projects. In the recent past joint ventures, joint development and other similar management agreements have been made between the landlord and developers, both small and large and this trend is expected to continue. This will not only be related to developers but can also be extended to co-working operators.

Financial pressure

And the current crisis in NBFC has also slowed the disbursal of loans to the real estate sector. As banks become more and more cautious, it has become a challenge for developers to get funds for their projects and are now exploring other financing options, and this is making their cost of capital very expensive. The recovery of the sector will get extended and not happen as anticipated if the crisis of NBFC is not resolved. The sector has seen both growth and flux and this trend is likely to continue. There have been various reforms especially in the tax and the regulatory business environment. There has been a visible increase in accountability and transparency which has impressed the institutional investors who have now been re-evaluating the sector with keen interest.

Emerging trends in real estate

An image represents the technological improvement in real estate sector.

An image represents the technological improvement in real estate sector.

Affordable housing

The only segment where you can see some movement and transactions is the affordable housing segment. This trend is expected to carry on for some time. Both supply and demand in this sector have shown promise. This is seen as a key propellant in the residential sector in the near future by real estate consultants. Government incentives are being given to both homebuyers and the developers thereby boosting both supply and demand in the segment. It was announced recently that the government has extended credit link subsidy scheme on home loans for the middle income group till March 2020. This is being done under the Pradhan Mantri Awas Yojana. Under the scheme a homebuyer can get a subsidy of up to 2.67 lakh rupees. This is seen as a good incentive for the affordable housing segment. It is seen and felt that this will be beneficial for the Indian real estate segment.

Co living

Though the concept is not new, the name is. And a lot of students and young working professionals choose to share an accommodation usually with other students or coworkers. A lot of hostels which are privately operated or lodges usually operate on this concept of co-living. Well, co-living has been around for many many years now, and is getting a lot more organised now. It is not just about getting a bed and breakfast. Now it comes with bedrooms and also accessible common areas like the living room and kitchens. The spaces are very convenient and promise a whole new lifestyle for students and young professionals. These options are mostly available only in the metros. This demand is slowly moving to tier II cities like Lucknow and Jaipur, where they are attracting both student and young working professionals. Many start-ups have formed in the space in the past few years. Some of them include Oyo Living, StayAbode, RentMyStay, CoLive, Stanza Living, Zolo and many others.

Co working spaces

A new concept in India introduced nearly a decade ago, good working spaces are expected to become a norm now. These places have seen a lot of traction and have been accepted widely. Earlier it was only the smaller businesses or start-ups and individuals would use these spaces but now even the bigger companies are opting for this. As the share of co-working spaces in office leasing has increased more supply is expected in the near future.

Reasons for stagnation of the Indian Real estate market

Image That Representing the gradual growth of real estate property's rate.

Image That Representing the gradual growth of real estate property's rate.

Rigid rules

Policymakers should now be increasingly concerned about the quality of urban living as India moves towards an urban future. There are many deterrents to building an urban India. Rigid Rules is one of them. Rules, which lay down how much, can be constructed and in which places along with regulations and essential permissions for constructions have created some obstructions in the housing segment. Seeking clearances from multiple department is very cumbersome and is a tedious process for the developers. Compliance checks have to be done for a lot of regulations and rules that often get revised and have to be paid quite steep charges and fees. Delays in grant of permission and rejection of applications without any clear reason is what developers are faced with often. This causes an increase in bribery in the process which leads to escalation of cost. The rules laid out with respect to land use often end up restricting supply of land and increases the cost of land too.

Heavy litigation

Real estate and land are subject to heavy litigation. Data collected from the Maharashtra region shows that 16% of projects and 31% of built-up space are stuck in legal dispute. In Mumbai these figures go up to 50%. On average, in Mumbai, a legal dispute has to go through for cases, which are in different states of resolution in different courts. And because of this projects get stuck in the legal system for long periods and construction projects in India take ages to complete.

Delays and malpractices

To deal with these issues, the developers have found a way around the system for completing their construction projects. They manipulate cash flow by raising funds from the sales of apartments that have not even begun so that they can finance other projects that are probably stuck halfway or are underway to solve the availability of cheap finance. All these delays and malpractices in the end affect the home buyers who have no clue about why our project is being delayed. To address these issues, state governments have set up regulatory authorities for real estate. Most of the developers have to register with this authority and also required to provide complete information on the projects that are ongoing. They can be charged penalties for failing to provide complete and accurate information about their projects.

Trends in the real estate market in India

Image showing a real estate agent holding the digitalised property,.

Image showing a real estate agent holding the digitalised property,.

Evolving at a rapid pace

One of the most promising and evolving sectors for investment in India is the real estate market. Not only is investing in the real estate market safe, it also delivers good returns. Experts say that investing in real estate is better than investing in gold or any other scheme. Although the real estate segment was going through tough times in the last few years, demand has shown to increase and the property market is expected to grow in the coming years and give you favourable returns. The segment is growing at a rapid pace and is picking up momentum. The size of the real estate market is expected to touch $180 billion by 2020. The growth pace at 9% per annum looks promising. Rapid urbanisation and an increased demand for property in Tier 1 and Tier 2 cities. metro cities like Chennai, Bangalore, Mumbai and Hyderabad have become sought-after destinations for investment in reality. The increase in the number of IT companies in the cities is reason for this. Both luxurious and budget apartments are being constructed to suit the different demands of the people.

For both high end and budget buyers

India’s property market is not just for high-end property buyers, it also has a lot of room for the mid budget buyers. With various initiatives from the government, the budget segment is growing rapidly. Schemes like the Pradhan Mantri Awaas Yojana have been launched with the objective of being able to make housing affordable to everybody. Homebuyer rights have been given a lot of importance by the Indian government. RERA committees have been set up in every state by the government to keep a check on the real estate market, which is so crowded, and also to ensure that all construction projects are completed on time and handed over. This act requires all builders to register and provide regular updates about their ongoing project. Those who violate this law have been imposed harsh penalties.

Technology innovations

Technologically connected high end residential properties is very sought after and also offers a good and sustainable living environment. Success in the segment depends on such technology innovations. The concept of sustainability is seen being inbuilt in a large number of projects, both residential and commercial, by real estate developers. The promise of lush green spaces, good air, a better social life and so on attract a lot of homebuyers.

Steps to Start a Real Estate Business in India

An image showing high rise apartment units in under construction.

An image showing high rise apartment units in under construction.

The real estate plays the role of the most promising business in the market today. It has seen huge growth and is flourishing at a great speed. It has attracted many people from all walks of life to start their own venture in the flourishing and thriving business.

One would be amazed to know about the previous status of the real estate business in India. All thanks to the enforcement and transparency of the REITs, RERA and Title insurance, the industry is in its best and great form.

If you are planning to get involved in the real estate business, it is advisable to do a little homework to make a strong position for yourself. Let’s take a look at a few of the steps below that would help you achieve your goals.

Research and Evaluate – Just like the other professions, it is important to do a little research on the real estate field before blindly falling in the market. You can start by taking the advice from the industry veterans. Always believe in the first hand advises and guidance.

Pick and Choose a Specialty – There are many choices available in this field like the residential brokerage, commercial brokerage, and land investments. Depending upon the options available and your preferences, you can go ahead and choose your field. To start with, one must focus on a particular field and slowly move to the other field.
Obtain the required registration and licenses – This process was not given importance in the earlier years, but now it is very important in the registration and licenses as stated by the government laws. Also, it makes your profession stand out because of the clean paperwork. Starting from registration of your firm to real estate license, obtaining tax registration services, GST registrations every single step plays an important role.

Chalk out a Business Plan – Once you get hold of the licenses and registrations, the next important part is the business plan. Make a clear and detailed plan and make sure the challenges you have put on plays the basis of improvement in your field. The budget, business structure, team hiring and funds strategy must all be mentioned clearly in the blueprint. You can improve in the areas, as you proceed slowly.

Put Together a Brilliant Team – This plays a very important role. One cannot manage and handles all the work alone. You will surely need help but also don’t hire people lavishly. Make sure the person you hire does justice to your work and to yourself.

Myths When Buying a Home in India

A Couple holding the keey and real estate kit which resembles the approval.

A Couple holding the keey and real estate kit which resembles the approval.

When buying a home, few blindly follow some of the processes which they hardly question as they are believed to be followed by so many people. This so-called wisdom actually turns out to be myths where the people believe and follow blindly. Below are the few of the common myths when it comes to buying residential property.

1st Myth: RERA covers all projects

Real Estate also commonly known as the RERA came as a huge relief for the buyers of home. But most of the people assume all the projects are safe as it is hugely covered by RERA. Well, it is not true as RERA covers the project with an area of 500 square meters and more or eight units or more. A project can only be a compliant of RERA, only after the builder has registered. So before taking on the project one must first ensure that it comes under the state regulator. It is mandatory in the RERA projects that all the residential and commercial real estate projects must be registered where it is eight or more apartments and land that measures 500 square meters or more.

2nd Myth: Under construction homes are much safer at present than RERA

Before the RERA projects, many builders failed on their project leaving the home buyers at sway. So, the buyers started preferring the homes that are ready to move. But after the launch of RERA, the builders started focusing on the completion of incomplete projects instead of focusing the new ones and leaving the ones unfinished that is existing. So, is it safe to believe the under-construction projects safer?

At present, most of the states, RERA is either nonexistent or is available in the palest form. In other words, RERA has taken over in few states, whereas it is yet to find its strong place in other parts of the state.

3rd Myth: Subvention schemes help cut cost

EMI or the subvention plans never fails to attract the home buyers. Under these schemes, the home buyers are asked to pay an upfront amount of 10-30% to the developers. The balance is then paid by the bank in the name of loan to the buyers. The bank gets the interest payments from the developers for the under-construction project. As the construction progresses, the bank pays the money to the developer. The EMI of the buyer starts only after he gets hold of the possession. This may sound like a cut cost but actually is not when looked deep.

A Survey On Real Estate Market -2030.

Real estate agent offer house represented by a model.

Real estate agent offer house represented by a model.

A recent survey was conducted on real estate performance. The results of the survey predict that the real estate market would reach I trillion USD in the year 2030. Thus the real estate market in India would be ranked globally. Here you would know about the survey results conducted on the real estate market and the factors that influence its growth.

Insight On KPMG Survey

KPMG surveyed the future of the real estate market along with APREA and Naredco. The results of the survey were surprising. Based on the findings of the survey, it is expected that the real estate industry is about to grow and reach the 650 billion USD in the year 2025. It is also predicted that the industry would reach 850 billion in the year 2028 and USD 1 trillion in the year 2030.

From the year 2014, the real estate industry continued to perform better. This has made it rank globally. This has built confidence in the hearts of the investors and buyers. Neeraj Bansal of ASEAN corridor exclaims that this real estate growth is influenced by the asset classes and schemes like affordable housing, housing for all, etc.

The growth in the real estate industry would contribute to the economy of the country. The Indian gross product is about to double in the year 2025. The rise in the real estate industry would generate employment opportunities to millions of people in the future.

The real estate industry was indeed facing several challenges due to unavailability of funds, delay in projects, accumulation of inventory, etc. But the healthy initiatives and amendments proposed the government recently has contributed to the growth of the real estate industry.

Real Estate Investments-Statistics
In the year 2018, the majority of real estate investments, say 44 percent were from other countries like Singapore, Canada and U.S. Most of the foreign investments were focused on commercial real estate projects in popular cities like Bangalore, Mumbai, Hyderabad, and Pune. Thus the foreign investment resulted in USD 149 million, which is pretty high when compared with the domestic investment of USD 87 million. Local investors continued to invest in commercial and residential projects. Mumbai is the major real estate attraction, and nearly 53 percent of the total investments are towards the city of Mumbai. Foreign investors prefer to invest in Mumbai, and domestic investors choose Hyderabad and Bengaluru as their preferred choice for investment.

The above offers a detailed explanation of the survey results of the real estate market.

Expert Insight On Real Estate Trends

A Close up view of Real Estate property kit.

A Close up view of Real Estate property kit.

The real estate industry in India experienced several changes in the year 2018. The polices and amendments imposed by the government and demonetization has created a considerable impact on the performance of the real estate industry. GST and policies of RERA influenced the growth of the real estate industry. Housing for All and Affordable housing was given greater importance in the year 2018. Here you would know about the views on real estate trends of the year 2019 by Aditya Mishra, CEO of SwitchME Technologies.

Expert View On the Future Of Real Estate Market

Aditya supports the Housing For All scheme announced by the Prime Minister of India. He feels that this scheme would create a significant impact on the real estate industry. The scheme has made it possible for homeless people to build their own house. The popularity of the scheme has influenced the affordable housing projects. Thus big real estate owners and reputed real estate developers have started to take up projects related to affordable housing. Aditya predicts that there would be some increase in volume and price appreciation of the secondary market of the real estate industry. The primary market is expected to be resilient. He suggests that there would surge in the volume in the future in popular cities of Mumbai. According to Aditya, in the year 2019, there would stable real estate prices in Pune and high real estate rates in Bangalore.

Aditya also talks about the challenges faced by the real estate industry due to GST and demonetization. Unsold inventory was the critical issue experienced by the real estate industry due to the above government reforms. RERA and Benami Properties Act also influenced the growth of the real estate industry. In the year 2019, this situation would change, and big real estate owners would manage the market situation. Small realtors and developers would face difficulties in sustaining in the market.

Impact Of Elections And Budget

According To Aditya Mishra, the General Elections 2019 would create a significant effect on the future of the real estate industry. The economy would face cash infusion due to elections. This would result in inflation. People would plea the government to cancel the agricultural loans before the general elections. The factors mentioned above would influence home buyers and people who wish to invest in a property. Increase in the interest rates would result in consolidation, and this would affect small developers. It is not possible to predict the accurate performance of the real estate industry after the general elections.

The above are some of the expert insights on the future of the real estate industry.

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