With the recent influx of IT professionals in the Pune city and increase in rentals ,there has been an increase in inclination among professionals to buy residential apartments and houses. The quest for housing is riddled with capricious builders who try to extract unreasonable amount of money from unsuspecting home buyers. a 10 point check lists before settling for a builder or project would prevent grave shock post buying.

  1. Look for NEC (Non Encumbrance Certificate) for the land first. Many small builders start construction to encash boom with a hope that they will get more land subsequently. Later they are stuck in legal battles. Mont Vert in Wakad is one example of this.
  2. Check if proper plan exists for the entire plot. Organised builders have 3D realistic models . A good way to cheat customers is to show plan of society and show everything outside it in green. This may not be reality. Jaypee Greens in Noida is one example.
  3. Check if the builder has a website which is live. If the builder is serious , the website will mostlikely exist. Recently I got a proposal from a builder in an email. When I checked the company website, I found that the site was fraud and it was just a template website which was yet to be developed.
  4. Check if the plot is square. A square plot with a central space is key to good housing . Do not invest in properties where they have 4 or more buildings in line. these are bad plots. Example Park Street, Park wayz, Capprichio in Wakad.
  5. Do not ever buy in place which is very low lying. The rain months in Pune are 5 long ones. The rivers swell and water collects in low lying areas. If you buy in those plots the chances of flooding are high. Example , Kapil Malhar on Baner Road
  6. Look for proximity to main road and availability of Public transport. Most societies are made in obscure plots with upto 1 km earthen or non existing roads. Do not ever buy that. Even a 0.5km drive in rains can bring tears to eyes after the roads are washed off.
  7. Check for avaialbility of municipal water supply. Normally builders promise that it will be there but considering the red tape, if its not already there inthe locality it may take years to come.
  8. The builders jack up sq feet rates every month. Today they are quoting between Rs 2200 to 3800 . A thumb rule to calculate the value of a property is to compute total value of 20 to 25 yrs of rent for a similar property in same area. Example a 1200 sq feet flat which fetches a a rent of 10000/month has annual rent of 1,20,000 . Its intrinsic values is between 24 lacs to 30 lacs. Rent is a surer indicator of demand for housing. Use this to evaluate the merit of this deal.
  9. Look for market nearby. Sometimes we are mesmerised by the models and views of flat but it when you start living in you gete a shock. Even buying a standard bread will need you to drive 8kms. Example in Wakad area you can only find local breads , no Modern, Britannia or Harvest.
  10. Security is a prime concern in Wakad area. The good looking societies are very vulnerable to thefts and I have seen 3 house break ins in last 1 month of stay in a row house society in Pune. Check for presence of street lights, boundary wall height, barbed wire etc.. Avoid any society which has slums near by. Given the political color , the slums never disappear and are a threat to safety.

These are preliminary considerations , Once you do these , comes the evaluation of construction quality . I will write more on this in my next blog

7 thoughts on “10 steps before Buying/ Renting House in Pune

  1. Good write up.

    However if one has to go by all the dos and donts given here, one may not be able to buy any house today. if one finds all other things compllying to it, the price is not right. Prices have been jacked up by cartelization and in Real Estate, beacuse of ill money is in abundance, if market is not supporting it, the builders have the holding power. It is amply evident from the last recession. Actually there should have been a crash if one has to apply rules of economics to pune real estate.

    Hence either one has to shell a unjustifiably large sum for right thing OR has to compromise on some counts. Unfortunate, saddening thing but a fact.

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    1. If buyers firm up for value, there definitely is a test for builder. I can quote 2 examples: Tyagi builders who found recession too tough sold flats at a rate od Rs 2350/sqft to 100 Infy employees..

      Similarly Paranjpe who had been selling at Rs 3800/sq ft came down to 2600/= for Infosys employees.. Its when we give up and are ready to loosen up that these builders Suck up..

      I have personally bought a 4 BHK flat @ 1500/sq ft at New town Kolkata from a Non profit body.. In the same area a similar property is sold at a rate of at least 2600/sq ft. So now you know how much we should loosen up

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  2. I admire the sentiments expressed by anonymous on this blog. I do have doubts where he is coming from .

    1. Defending Kapil Malhar : The fact is; the society is definitely on a low lying area I guess it is at least 15 ft below the mean road level. Laws of physics are pretty clear water flows from higher level to lower level and accumulates at the lower most point. I do not have any interest ‘ For and Against’ this particular builder but had gathered this information from local people when I arrived in first in Pune. I see no reason to defend a low lying area in proximity to river unless I am a builder/sales man myself, which I am not. I wish to quote the case of a govt scheme in North East Delhi where Govt sold housing plots and all of which was submerged due to changing course of a river .People lost a lot of money .

    2. ‘Your King of builder’ : I have clarified what I am in the statement about myself on the blog. Its the anonymous types who need to clarify which camp they are coming from.

    3. Attributing real estate price rise to blogs like mine : This probably shows basic comprehension dysfunction on part of commentator. I have advocated linking purchase price to actual rental demand in an area. This actually means builders are claiming 10 -15 lakhs extra over intrinsic price. Awareness of this should bring the prices down not the opposite which the commentator has claimed.

    4. Investor : I am not an investor. This blog was a result of my own individual observation while trying to get myself a living space when I relocated to Pune last year.

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  3. Your comments about “Kapil Malhar on Baner Road” are baseless..please reconsider. 2005 mansoon was unique and it was the gross mistake done by flood control dept which allowed 300k cusecs of water discharge from dams.
    Also the ecroachment on rivers like Ram River should also be blamed for that…Look at the 15ft walls raised by your king of builders community and the construction waste debries in the middle of river beds that had flooded the river which created backwater in mula river. It caused rowhouses to subemerge in just 3ft water…It was just for the catch eyes of localites one off local corporater and his “chamachas” created unncessary chaos on site.
    If you are really writing this blog to help needy dont misguide,
    land/construction price have gone up because of such articles/blogs for which the real middle class (not IT-middle class) is paying hefty cost.
    A person instead of investing in other schemes (govt schemes in benefit of nation) is investing in the much hyped sector like this and then it what it causes can you imagin?
    Whats recession? One buys more than his requirement which cuases the boom in the appreciated commodity production. It then causes other commodity prizes to go up then the loan interest charges and then the baloon bursts and causes recession.

    Stop advising people to buy houses just for investment…This nation is also for poorer/middle class for gods sake DONT.

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  4. No. 8 is one of the most pertinent.. The realistic price of a housing unit is measured in no. of years it would take to recover the principal. The countries like Singapore give you a principla back in 10-12 years. World wide in developed economies it takes 20-25 years. India has the lowest rental returns and it takes 34 years to get ROP (Return of principal) Thus internationally ,its considered a bad market for investment purpose in real estate.
    High Rentals , in fact are the surest indicators of genuine demand. Rest all is a builder/investor hype.

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