Choosing your real estate developer is a very important consideration in today’s times. The gap between supply of residential units and demand extends to more than thirty million units. This is just the residential sector we are talking about. Alongside, this has encouraged more and more individuals to enter the real estate arena with elan. The role of the government in the development of the real estate sector has decreased in scope and execution over the last few years. This has mainly been due to the entry of various real estate companies and private developers into the sector.
Some of these are top brands in other industries while many are small time local developers. Developers of all types and varieties are witnessed in the Indian real estate market. There are multiple developers to choose from. First time home buyers usually end up shelling out an amount worth his/her annual income for a minimum of five years or even ten years as the cost of a particular property. When this is the case, you should be very careful before buying a property and choosing a developer. The real estate sector in India has come of age as compared to the earlier trends and problems plaguing the sector. Yet, experts reckon that property investors need to be alert about operators and established companies that can leave needs and commitments unfulfilled and make a mockery of your investment.
There are multiple aspects that you must consider before choosing a developer or real estate company with regard to investing in both commercial and residential properties. Always take into consideration the market opportunity or the practical feasibility of undertaking a project in a particular location as promised by the developer. The development type has to be considered as well. Project execution does not only depend on the developer as he will already have spent his capital for land purchases. Customer payment is the key with regard to getting hold of working capital and finishing the project on time. The speed at which the developer manages to sell his residential units and the capital appreciation potential of an investment are major factors in this regard.
There are multiple listed firms and developers who go by the guidelines laid down by the Securities and Exchange Board of India or SEBI as it is known. These firms have to submit financial statements in order to allow interested customers the opportunity to conduct a comprehensive analysis of the financial stability of the company or firm in question. Buyers can also find out whether the company or developer has the required capital to go ahead with development and construction in a speedy manner. Owing to financial statements that are audited and better governance in a corporate setting, these real estate companies and firms are better placed with regard to obtaining funding from banks and financial institutions. This is only possible in case they perform appropriately as well. These firms can also face problems owing to recessionary factors and other slumps in the market and its conditions. This is something that you should be careful about and not take these firms for granted with regard to finishing a project on time. Check the overall market situation instead before investing.
Liquidity problems are a common scourge in this sector and most real estate companies and developers usually have a tough time battling the same. Slow sales volumes, corrections in prices and a drop in demand are other factors that may play a key role in destabilizing projects and companies operational in this sector. You should always be careful in this regard. Always check that the developer provides all required documents including the building plan approval, title of the land, the copy of all the necessary approvals from the authorities and also the construction commencement and other information. You can even hire a lawyer to smoothen out these transactions. Any developer whether famous or local, should always make these documents available to customers.
In case you find any reluctance on the part of the developer with regard to providing necessary documents, it is advisable to back out of the deal immediately. You can also have your lawyer take care of the situation as mentioned earlier. Always have a look at the overall track record of the developer or real estate company you are looking to invest with. Always look at the delivery timelines, work quality and space amounts delivered earlier. With poor infrastructure and execution abilities, simple projects can drag on forever literally! Alongside, faulty management of such projects is another problematic factor to be kept in mind in this case. This does not happen in case of only local and small developers.
There are many prominent firms and companies who have been known to keep customers waiting for long periods of time. However, listed firms are better options as they are mostly responsible to company stakeholders and therefore under more pressure to finish and deliver projects within an appropriate time period as deemed fit by the company. Alongside, these companies are also observed closely by market regulators like SEBI as mentioned above. The listing itself comes with the observance of certain criteria including steady profitability for at least three years, particular net worth figures and audits courtesy a well known firm. These are minimum criteria options with regard to obtaining market regulator listings. You should always talk to other customers who have bought into a particular project.
You can also consult market experts and real estate professionals. Real estate regulators should be introduced into a market where largely, there is no way to ascertain the reliability and capabilities of multiple types and varieties of developers and realtors. The overall credibility of the company or developer in question is the major determinant of who you go for ultimately. Always do your homework beforehand in order to avoid being taken for a ride by fly by night players in this market. Choose your real estate developer with care!