The real estate sector in India has changed remarkably in the last few years. The prices had soared beyond predicted points after the economic slowdown of 2008. In times affected by such an economic crisis, you may have noticed the recent popularity that Delhi NCR has acquired in the real estate market. This trend is mainly because of many factors that have made it more favorable than places like Mumbai, Bengaluru, and Chennai. Delhi NCR boasts of a lot of infrastructure benefits that have directly affected this sector in this region. And, the increased rate of appreciation and the ease with which a property in Delhi can be resold, have lent a helping hand as well.
Determining The Value Of An Investment
What Constitutes An Investment
The sale, purchase, rent, and mortgaging of any property, by way of profit, is termed as a real estate investment. You can acquire this profit by way of tax benefits, sale, rent, equity build up, and mortgage.
Factors That Shape The Trends
The factors that influence the investment trends are the location, available infrastructure, and the type of property being considered.
The Delhi Master Plan 2021, prepared by the DDA (Delhi Development Authority), opened many opportunities for investors by detailing the infrastructure plans for various zones in the region. This enables many investors to decide whether they want to invest in commercial, residential, agricultural or other types of properties, based on the location, and on the infrastructure available. For instance, places like Gurgaon have a flourishing market thanks to the businesses, shopping centers, office spaces, and the lifestyle of the residents.
The connectivity of the region also contributes to the investment making process. An investor will definitely benefit from public transportation like the Delhi Metro, while investing in a property in Delhi.
The Problems And Risks Involved
The problem in Delhi is that the cash flow is not very liquid, unless mortgage is involved. There are also risks involved, as a lot of paper work with the sub-registrar’s office in Delhi needs to be dealt with. The value of the property in Delhi is determined via listings, bank documents, agents or brokers, government entities and wholesalers and investors.
Benefits In Real Estate Investments In Delhi NCR
If you wish to buy or sell any property in Delhi, it is wise to first consult with agents or attorneys, who can assist with the sale or acquisition of property in the city.
In Delhi, investing in property can generate cash flow through net operating income, tax shelter, equity build-up and capital appreciation. Delhi NCR is known for its high capital appreciation and the ease of resale, both of which make it a desirable location to carry out investments.
Locations To Scout For In Delhi NCR
Delhi-NCR is a favorite with consultants with massive infrastructure work planned for the future. Planned zones such as the Dwarka Expressway, New Gurgaon, and the Noida Extension are likely to attract investors. The eight lane expressway that is underway between Dwarka Expressway and New Gurgaon will increase connectivity in the region and pave the way for massive plans.
Noida and Greater Noida are also excellent for investors. The area has good infrastructure and is home to several big offices belonging to various industries. In 2014, the rates are expected to stabilize.
What To Look Forward To In 2014
In 2014, developers are slated to price projects more reasonably, keeping in mind the fact that realtors are probably facing debt, considering the post-2012 high rates due to inflation. The Union Budget is also something to look forward to, as realtors and developers expect big policy decisions and reforms in favor of investments.
When it comes to real estate, there are plenty of people out there that are unaware of the many tax advantages available for real estate investment properties. One of the most popular ones is that of the 1031-Exchange. For those of you unfamiliar with this, the 1031 Exchange is actually a section within the United States IRS Code which states that certain eligible properties may be exchanged for properties of equal or higher value without having to pay any taxes on the transaction.
This tax treatment of trading properties for larger ones is an absolute god-send for the serial real-estate investor. Imagine having the ability to regularly trade up one investment property for a larger one every time you had the resources to be able to upgrade? Well, that is very well possible thanks to this very important IRS provision! Larger properties mean generally higher rents allowing you to increase your annual cash flow, so it is definitely a good idea to trade up for bigger properties whenever you get a chance.
Other tax advantages for rental property owners include tax deductions on interest expenses, depreciation expenses, repairs, travel expenses, and insurance costs.
Any interest expense on a rental property is tax deductible. This means deductions for mortgage interest payments, and interest on credit cards for expenses that were used in a rental capacity.
As a real estate investor, you have the opportunity to claim depreciation on your property as a deductible expense by deducting a portion of the value of your property over the span of a couple of years. While this tax deduction provides the investor with immediate benefits, this benefit is eventually returned to Uncle Sam when the property is sold. This benefit is lost primarily because depreciation serves to reduce the total cost basis for the property, so any capital gains are taxed from the lowered cost basis. This concept is known as depreciation recapture.
Any repairs on your investment property are a deductible expense in the year that you pay for the repair. This means things like painting rooms, and replacing faulty lighting. Any improvements to the property, on the other hand, are not deductible.
Real Estate owners are eligible for tax deductions every time they have to travel for their rental activity. This deduction could be broken down one of two ways: either as actual expenses (receipts may be required), or the standard mileage deduction (which is currently 56.5 cents per mile for the 2013 fiscal year).
From the above deductions, it should be clear that there are plenty of tax advantages available for real estate investors! If you haven’t already, it’s definitely a good idea to start claiming all the above deductions you are eligible for. They may very well make a difference between losing money on a property versus earning a profit.
Time is as valuable as money – both are rare, expensive and precious. When talking about property transactions, landed property brokers or agents function as the mediator or negotiator. Whether you’re selling or buying your property, these professionals make sure that you get the best deal around, which actually transforms into a wise investment. However, real estate transactions are no cakewalk. Most of the people take a drastic step, which eventually proves unfavorable for them. Now, this is exactly where the role of a realty agent for residential comes in.
With the constant growth in the world economy, scores of people are looking forward to property investment; this, in turn, causes a huge demand in the real estate market. Nowadays, investors are thinking beyond big towns and cities. As a matter of fact, they’re expecting massive prospects in the rural and suburban areas of the town. Property dealing is a complicated task, especially for those who any experience in this kind of dealing. When buying or trading a property, one needs to take a few vital factors into consideration. Fortunately, you can seek help of realty experts who hold a lot of experience in this field. When looking for an efficient and reliable property broker, consider keeping these following points in mind.
Settle on your specific requirements
When looking for an expert housing agent, reflect upon the kind of services you need. Are you looking for a new house in the same district that you live in? Do you consider property relocation? Whereas some agents concentrate on new property dealings, others prefer second-hand real estate transactions. Regardless of the type of services you need, make sure that you appoint an efficient and reliable housing agent. On the other hand, if you’re contemplating official property dealings, hire a real estate agent for commercial. Remember, knowledge, skill and ability matter a lot.
Get an idea about the market
Today, you’ll come across a range of property brokers in the market. Although most of them are authentic and trustworthy, some fake professionals exist in the market as well. Always seek help of a property consultant who has sound experience in real estate dealing. Any extra reward or certificate is just an incentive. As a matter of fact, this works as a kind of guarantee for potential customers.
The World Wide Web is also an excellent place to start your research work. Here, you’ll get all the necessary details on these property brokers and the types of projects handled by them. Again, there are many review websites to get views and feedbacks about them.
We only own property inasmuch as we can pay the legal taxes applied to it. Here are the ten most common questions you should know the answers to if you own property or plan to someday own property.
1. How is Property Tax Computed in California? Annual property taxes will usually be from 1% to 1.25% of the sales price of the home at purchase.
2. Can Property Taxes Go Up Annually? Unfortunately, the answer is yes. In California the maximum tax hike on property is 2% of the previous rate.
3. When Do I Have to Pay Property Taxes? Property taxes are paid twice a year. One is billed in February and is due by April 10 at the latest; the other is billed in November and is due at the latest by December 10
4. What Happens to the Tax I’ve Already Paid this Year if I Sell My House? This is handled in the escrow process at closing. If you have already paid taxes for time past your occupancy, the buyer will reimburse you for the difference.
5. What is an Impound Account? If your lender is paying your taxes and insurance as part of your monthly payment to them and your down payment on the house was less than 20%, they will require you to have what’s known as an impound account.
6. I have an Impound Account – Why Do I Get a Refund Some Years and a Raised Payment in Others in Order to Fund the Impound Account? Your lender is collecting funds from you to pay your taxes and insurance premiums on your behalf. When your taxes or premiums rise or fall, they adjust the amount collected from you.
7. Can I Simply Pay All of My Property Taxes in December? Yes, you can – but it may have some tax implications. Check to see if there are any downsides to this in your county.
8. What is Mello-Roos? Mello-Roos is a fund set up for builders to borrow from in order to put in the necessary infrastructure for a new development – sewers, sidewalks, street lights, etc. The loans are paid back through your property taxes.
9. How Can I Tell if I am Buying a ‘Mello-Roos’ Home? The seller is legally required to inform you. The tax bill, which is public information, will also list this.
10. How Long does Mello-Roos Apply to a Property? Typically 10-20 years.