There was a time when land was available in ‘Bangalore’ in plenty. It used to be called a retirees paradise where early morning walks were filled with peeks into the beautiful home gardens of neighbours. The advent of ‘Bengaluru’ brought with it many developments and also the scarcity of plots. Apartments took the forefront and gardens turned into terrace gardens. It has become a mounting concern for people who are interested in building a home. The rising population, the decreasing availability of land in the city, and the expansion of the city into the peripheries are all the leading causes of scarce plots. Apart from such macro factors, corruption through the means of cash payment demands, selling of disputed lands, fake documentations etc. have made buying plots a daunting experience for many.
The new breed of investors do not want to take any chances when it comes to their dream home. It is therefore advisable to follow a checklist to ensure a smooth transition while buying a plot.
Location of the Plot
The plot’s location is vital as it will be one of the main factors in determining its price. Good connectivity, proximity to the main road, schools, hospitals and commercial establishments among others mean that the value of the land will be higher. How close/ faraway do you want to be from these places? How long are you willing to commute daily? It might also be worthwhile talking to the town’s planning department to learn about what it envisions for the area in its master plan. This will play a significant role even if one is planning to sell the property in future.
Research on actual value of the plot
Do not go by what the real estate agent is telling you. Do your research, talk to people in the area if possible, and look for other listings in your area of interest as well. Most often, the listed price that is quoted is not the actual price. Remember, sellers will always leave a little room for bargaining. Keep that in mind before quoting what you are willing to shell out for the plot. Ensure that the amount you are disbursing is not exorbitantly higher than the actual value of the plot.
Covered area of the plot
It is easy to get confused with the jargons used by real estate agents and therefore you must ensure that you do your homework properly. The covered area is the actual area under your roof. If your plot is 1000 sq. meter and the construction is in 500 sq. meter, then your covered area is the latter. The land value is highly dependent on the floor area ratio. This is often restricted by a zoning code. At the same time, if the planning authorities increase the floor area ratio then the value of the plot doubles. This is how the ratio becomes the price controller of the plot.
Documentation & Verification including approvals
There is a plethora of documentation and verification that has to be done while purchasing a piece of land. One has to ensure that all the documentation related to land transfer is completed in order to avoid future hassles. Some of the must have documents are the 7/12 document, 6/12 document, 8/A booklet, encumbrance certificate, and the release certificate among others. As a buyer you also need the title deed, a receipt from payment of stamp duty charges and the house plan approval among others. There is a lot of pilfers in the real estate sector in India, therefore make sure that you consult a legal expert while taking the plunge.
Security & Amenities
When you are ready to make an investment, one of the main focus areas would be security and amenities. Should you invest in plots by reputed developers or buy it from individual sellers? On the one hand vacant land will be less expensive but they require much greater knowledge and diligence on the part of the buyer. On the other hand while a plot from reputed developers would cost a premium, it will save you the trouble of filing paperwork and also offer you a layer of security. Such plots are often approved by banks and finance companies and reduce the risk for buyers. They also offer protection from encroachment.
One must remember that even when you invest on a vacant plot, by the time you pay for the permission, utility and infrastructure you will end up paying a premium anyway. Fenced plot clusters also offer the benefits of basic infrastructure development like internal roads, drainage lines etc., which would otherwise fall on the buyer. Therefore, a careful analysis is a must-do before taking the plunge to buy the plot.