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Owner Financing

A Home in Chennai Position

Taking a home loan at this time is easy. But to find a proper home at the right price is difficult in this boom market. In Chennai home loan activity is on peak and it is difficult to take a decision without knowing owner financing the exact position in the market at the present time.

Real estate market in Chennai is growing very rapidly. Govt. has also allowed 100 % foreign direct investment in this sector and many foreign construction companies like Morgan Stanley , RIRIC company etc. have started investing here. Real estate market owner financing in Chennai focuses on two major areas retail (or Official) and residential. In both sectors there is a marked growth and it is expected that it will rise still further.

Chennai traditionally has been a cloth center. Vasco-da-Gama and the British all concentrated in getting fine cloth from here. In fact the city grew only for this .This is not a very ancient city like other cities in India. The latest development is in the IT sector.

Growing economy in segments like IT, e-commerce and others have resulted in increasing the buying power of common man and naturally the first thing to buy is always a home. People with smaller homes are going for bigger homes or a second home and thus more and more colonies are being developed. People go for home loans and new incentives are being given every day. The biggest incentive is the tax rebate offered on the installment-payments.

In Chennai commercial space has a bit of a crunch as there is a shortage of quality space in the city. Though it is estimated that 11.3 lakh Sq. feet of office space has been added recently yet this is far less as compared to other cities like Delhi etc. IT corridor is being developed on old Mahabalipuram road and companies like Satyam, EDS, Ford IT division etc. are located this side. It is expected to develop 25 lakh Sq. feet area. Velachery and Mount Poonamallee Roads are the other areas being developed commercially. Ambattur an industrial estate will also develop apx. 6 lakh sq. feet. Of land commercially. Commercial office space and quality buildings are coming up fast in south campus like Guindy, Mahaballipuram Road, Taramani etc.

On the residential side there is a strong demand of budget segments in Valechary, Mogappair,

Gouriwakkam, Moffusil bus stand and Koyambedu as these places are close to the emerging work centers. The normal cost is Rs.900 to 1000 per Sq.feet.

Mid end segments are coming up in areas like T.Nagar,Anna nagar, Adayar, Besant Nagar. Normal cost is Rs. 2000 to 2500 per Sq. ft.

Premium locations comprise of R.A.Puram,boat club and Rose Garden where high end luxury apartments are coming up with facilities like swimming pool, club etc. However independent banglows are very few and thus very few transactions take place on this side. The normal cost is Rs.2800 to 3599 per Sq. feet.

To see the landscape of Chennai, the mansions with big gardens do exist but mostly sky scrappers and the flat system is emerging everywhere. BPOs have set up their hi-tech infrastructure here and hence there is a wild rush of technical students and workers to make their career owner financing over here. People who have their children working in foreign are able to rent the extra accommodation to the new entrants. The general rate is Rs.70 to 90 per Sq. foot in the high profile areas. City is fast growing and the outskirts are fast merging with the main city. All this has made the investment in the real estate very attractive over here.

In last eight years the prices in the residential market shot up by 8 to 15 %. Demand for the homes in the price range of 8 to 20 Lakhs has shot up and due to this more and more housing complexes are coming up selling the flats of this range. But on the whole the prices here are lower than the prices for the same size flats in Delhi and Bombay. They are even lesser than prices in Bangalore. Due to this many companies, domestic and multinational, have been attracted to this city.

The future trend seems to be quite bright though the prices will level off. The rentals may increase by 8 to 10 % in near future as more and more MNCs are shifting here.

These days the investments in Banks is not as popular as the interest rates have gone very much down. The stock market also keeps on wavering and the mutual funds give very less return. Hence the housing sector remains the most popular investment. Chennai is well connected hence is very popular with the NRIs also. They also like to invest in the housing sector which further booms this market.

Deciding a house before loan

Home loans are relatively easy to get these days as the banks and financial institutions wish to tap this source to the maximum. In general people go for mortgage loan after paying some down payment. All that side is easier than deciding which house to buy .The decision has to be taken taking all the precautions .As has been seen the housing activity is very much on in certain parts of the city. First step should be to have an idea about the price and facilities being offered. There are some good sites which give all the relevant information. The experts name the following few:

1 real-estate chennai.com

2 99acres.com

3 ongaia.com

Apart from this also many are available on the net. Apart from knowing all the details following points must be considered:

Buying a flat

1. Check whether the approved plan is demonstrated on site

2. Check whether the flat is made to plan

3. Verify whether all the undivided share of land is transferred to your name

4. Check whether the completion certificate has been obtained

5. Check the details at CMDA

Buying a plot

1. Check whether the seller has a right over building

2. Check whether the plan has been approved by CMDA and local bodies.

3. Check whether the roads etc. have been given to the society and are maintained by them

4. Check whether the plan is to the rule

5. Check whether the documents etc are all attached

6. Avoid unauthorized colonies.

Conclusion

In this boom period of housing construction in Chennai procuring a home is easy. But with so much activity it becomes very difficult to separate well from the bad real estate agents. Hence it is worthwhile owner financing to do some home work on the net at home before approaching an agent and even after that, careful checks should be made on the property and also on the loan terms. Housing loan is a big loan and should be taken very carefully.

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