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  • Category: Miscellaneous

    Why do people go after real estate properties in India even if lot of disputes associated with it?

    If you have any vacant land in India, you should have a hawk eye on it, otherwise some influential persons will grab it. Even while buying a new property, we are not sure whether the documents are genuine or not. Even if we try to buy a flat, we are not sure whether it will be handed over to us or not. Even if you rent a property, you are not sure whether the tenant can give the rent regularly without fail. In India, most of the frauds are happening in the real estate field only. The Revenue department is using this as an opportunity to make money and it became the most corrupted department in India.

    For our living, we need only one house and there are many investment opportunities for getting a regular income but still people go after real estate properties for the extra income, even though many disputes are associated with it. Is it happening due to the lack of awareness of other investment avenues or something else?
  • #710860
    True. These days it is happenings regularly. People wanted to see that their worth will increase very fast. For that, the best way is found to be investing in real estate. The more the risk you take, the more the benefit you will get. But sometimes you may lose your investment also. Investing in shares is risky. But if you invest in the right shares the profit you get may be high. Similarly real estate business is also a risky field. But the rates are increasing and our property value will increase very fast. That is why people are going for it.
    Many times we hear about some disputes. But people feel that the investment is worth and they are ready to take some risks so that they will become rich. Ultimately everybody wants to make money easily. Investing in real estate business is one way of getting it. But we should not take an undue risk and we should see that we will not lose our investment.

    drrao
    always confident

  • #710862
    It is the individual's carelessness that makes others to benefit. Firstly, it is the greed to make money through real estate anticipating that the money would grow after the investment. Firstly, while purchasing a land or house, it is to be ensured that the documents are in order. Secondly, the area should be properly marked, fenced and safeguarded. Thirdly, frequent visits to the area to ensure that the land is not occupied or encroached. Fourthly, pay taxes without fail. If we fail to do the above things, I am sure we are likely to lose our possession in this world where fraudsters exist, especially the people with political support.
    No life without Sun

  • #710882
    I assume one more reason for people to invest in real estate. It is very easy for the people to show off their wealth to others if they invest in real estate properties. But if you invest in other avenues, nobody knows how much wealth you have. I assume it because, except in some cases, even the values of real estate properties also do not rise that fast. If we buy a flat, can we expect it to double the value in 5 years? No, never. It can even depreciate from the price at which we bought it. Is there any meaning to invest in a second flat and give it for rent?

    Our mindset should change. We need only one house to live in and hassle free investments like mutual funds, gold, PPF, fixed deposits, ETFs, Sovereign bonds, etc. to live a peaceful life.

  • #710885
    Nice post raised by the author. Everyone wants to own a independence house, plot or a flat and for that purpose the planning goes for long time and the property to be taken as to be all clear from any dispute. But for some reasons better known to them, people want cheaper property with litigation so that they can settle the same through their influences and approaches. Owning a house is the prestige issue for any family and if a boy has to be married or a girl has to be married, they first look for the best place to make them stay so that they live in happily after the marriage. But good properties are already sold and occupied and what ever we see in the market is of some litigation, bad vastu or rejected by other customers better known to them. So there is a rat race even for purchasing litigant properties.
    K Mohan @ Moga
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • #710887
    I guess this is due to certain mindset. Also folks are not aware or educated enough to make other investments, consider investing in shares and stocks. How many folks are literate enough to understand the technical language involved. Most commoners invest in FDs etc for long term gain. We need to educate our folks to diversify our income opportunities. So that if one income reduces the other can continue. This is very imprtant and the need of the hour as many new emerging texhnologies like blockchain need a person to have atleast some level of financial proficiency.

  • #710900
    The other reason could be stashing black money. Since the government rates are always lower than the market rates, people pay white money for the government rate and the rest with black money.

    In order to eliminate the black money in real estate sector, the government either can survey regularly for the market price and fix it as the government rate or it can fix the market value as 5 year future value of the present government rate (by taking into account 15% appreciation each year). With this action, I think no one will go towards real estate properties except for their own stay.

  • #710902
    There is always difference between the market rate ie govt rate and the actual rate of the properties and the difference is roughly 60 is to 40 ie means if the property is worth one lakh sixty thousand is black and forty thousand is shown as the registration value to which one has to pay the white amount and though the government and income authorities knows this , they are unable to catch the seller and buyer red handed because the documentation is made under value and that is the proof to which no action can be taken forthwith.
    K Mohan @ Moga
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • #710910
    Mohan sir,
    We can eliminate this trend if the registration (government) value is greater than the actual value. In such case, the buyer has to give complete white money for the government value and take back the difference money (government value - actual value) from the seller as black money. Will anyone come forward for such a deal?

  • #710912
    Investment to be made in the real estate is somewhat risky if the connected papers relating to the property are not verified properly. However, while approaching the bank in relation to the propert loan, they would certainly examine all such papers before they sanction you loan. But despite this if the builder is not a man of fair intention, he may make your life hail by always extending the date of completing of the flats. Now the question is why under such a situation, people are crazy in making huge investments in the real estate. This is because of the value appreciation of such properties if every thing is in order.
    We should not go by the statements of the property dealers but ensure that the property is ok in all respects in the eye of the charted accountant. Hence depute some financial charted account to get the property verified so as to avoid any future complications.

  • #710913
    In the past there was always a good appreciation in the real state and due to that many people are still going for it. There are risks and problems associated even then the greed of gain is luring them there.
    Thoughts exchanged is knowledge gained.

  • #710934
    In this case, people need to be aware that when buying a property, then you should know about who owns the property ie who owns the title. For this, you should ask for papers. Also, see if there is any case on that building. If confused, consult an expert or lawyer. With the right documents, your money will be safe because most of the cases of fraud in land or property are due to the lack of good documents.
    Swati Sharma

    Keep your Face to the SunShine

  • #710935
    Real state is a big problem area and that is why it requires a high degree of digitisation and computerisation of land records linked to one's Aadhar and PAN number. Only after that the true governance in this weak area can be expected. Registration of land property and identification of the actual owner is sometimes a very big problem as people do not get the mutation or ownership holding of the properties in time and even in the ancestral properties, disputes and doubts arise. In this area the agents and revenue officials can easily make the gullible person fool and even take some significant money from him in the name of service charges. Loopholes in records and faulty rules and regulations always increase the scope of corruption and real state is a burning example of the same. Still as people have a fancy for the real state they intentionally enter in this risky proposition on the assurances of the contractors and real state dealers.
    Knowledge is power.

  • #710966
    My surprise over the real estate people is the advertise their lands are near to airport or railway station but situated at a place where we have to travel with the help of another mode of transport. On the other hand they advertise that their apartment costs starting from 35 lakhs and on contacting we can get information that the 35 lakhs flat is of seventh floor. What will happen if a)lift got failed, b)power cut prevails etc., Besides this the 35 lakhs we paid for the apartment but the hidden charges such as maintenance, water etc., are not taken into account, if we add everything, it is more than triple of what we are paying as rent. The only benefit in buying such houses is we possess 'own house' only. My relative from North India bought an apartment house in middle of Tamilnadu with the thought of staying there after retirement. But to his shock after three to four years later he came to know that the land in which the apartment built was not owned by the vendor. It was become very difficulty to him for disposing or possessing the house.


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