Land Buyer’s Guide: 5 Things You Must Check Before Buying A Plot – News18

Investing in plots offers potentially substantial returns, making it an enticing venture for many. However, it is important to acknowledge that beneath the promise of profitability lies a landscape fraught with inherent risks. The purchase of land represents a capital-intensive endeavor that demands meticulous consideration and rigorous due diligence.

Also Read: Residential Real Estate Trends: Expert Tips In Navigating A Shifting Landscape

In this pursuit of land ownership, there exist pivotal factors that individuals must meticulously contemplate to safeguard their investments and pave the way for a successful and secure investment journey.

1. Comprehensive Research: Before diving into land acquisition, conducting thorough research is essential. This comprehensive process encompasses various vital facets. Firstly, delve into the area’s upcoming infrastructure development plans, assess its connectivity to urban centers and transportation networks, and confirm the availability of crucial amenities like water supply, electricity, and sewage systems.

Secondly, carefully examine the economic and social development trends in the vicinity, paying close attention to local business growth, educational institutions, and employment opportunities.

Lastly, employ methods such as comparative analysis and the belting method to gauge the plot’s fair market value. Relying on data from diverse, credible sources is vital, as it not only mitigates risks but also bolsters the potential for a successful land investment.

2. Title Verification: Title verification serves as a pivotal step in land acquisition, ensuring that the seller possesses unambiguous and unchallenged ownership rights to the property. In some regions, the legal heirs of the seller may retain rights to the land even after the sale, potentially leading to protracted legal disputes and financial setbacks.

In India, for instance, data from the National Crime Records Bureau (NCRB) underscores the prevalence of land-related disputes, often rooted in unclear or disputed land titles. To mitigate this risk, it is imperative to obtain all necessary clearances and legal documents from relevant parties, thereby confirming the property’s ownership status and safeguarding your investment.

3. Necessary Approvals by Local Body: In the Indian context, securing requisite approvals from local authorities is paramount in the land acquisition process. Local governments in India establish master plans that categorize specific areas for various purposes, significantly affecting land values ​​and development potential.

Comprehensive data from the Ministry of Housing and Urban Affairs underscores the impact of zoning regulations on land values ​​in major Indian cities like Mumbai, Delhi, and Bengaluru. Ensuring that a plot has obtained all essential approvals from local authorities for residential or commercial construction is crucial to avoid legal complications.

Additionally, obtaining documents like encumbrance certificates, a requirement in states like Karnataka, serves as a vital step in confirming the land’s freedom from legal or financial liabilities, further emphasizing the importance of thorough due diligence in land transactions in India.

4. Liquidity Risks: Land investments typically require a long-term horizon to realize the expected high returns.

Land is considered a less liquid asset compared to other investment options such as stocks or bonds. Finding a suitable buyer and completing the sale can be time-consuming, making it imperative to align your investment in land with your financial goals and timeline. Be prepared for a long-term commitment and understand the unique liquidity challenges associated with land investments.

5. Opt for brokerage-free: Land transactions often involve intermediaries who may be motivated by high commissions, potentially leading to unethical practices. Exercise caution when dealing with brokers, take the time to evaluate all aspects of the transaction thoroughly, and avoid succumbing to excessive upfront demands.

In the Indian real estate context, brokers can charge commissions ranging from 1% to 5% of the property’s transaction value, warranting careful consideration of the financial implications. Collaborating with reputable and trustworthy professionals within the Indian real estate industry is advisable to navigate these challenges successfully.

The acquisition of a plot of land represents a monumental decision in one’s life, often involving substantial financial investment.

Given the significance of this endeavour, meticulous scrutiny and due diligence are paramount. The stakes are high, and prudent decision-making, backed by comprehensive research and engagement with reputable professionals, is essential to ensure that your investment in a plot of land not only meets your financial goals but also provides the security and potential for growth that such a substantial commitment warrants.

-The author is CEO & Co-founder, NoBroker. com. Views expressed are personal.

Disclaimer:The views expressed in this article are those of the author and do not represent the stand of this publication.

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