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Reap the benefitsExiting the market
On what basis should I decide to sell my property?
Your decision to sell your property depends on the following factors:
Property market in your city/locality: The residential property market is location-
specific and the prices will vary for different areas.
How soon do you need the money? Do not sell your property in a hurry if you do not
need the money urgently. Getting the best deal may require patience or even spend
some money to add value to your house. You also need to consider the rental return
from the property as it will be a source of steady income.Price it right: The biggest mistake sellers make is in pricing their property too high. The
best way to determine the ideal price for your property is to check with brokers in the
locality or by listing it on property portals online.
Consider the taxes: How much you actually get after you sell the property will
depend on how long you held the investment. If you sell your house within three years
of buying it, you will lose the tax benefits.
In case of a mortgaged property: Selling a house that has an outstanding loan
requires a lot of documentation. So, try to pay the loan and then sell the house.
How do I sell my property?Selling property is much more difficult than buying one. Unless you know of people
who are willing to give a good price for your house, a property broker may be your
best bet. Brokers usually have a wider reach and are more clued in to the local
property market than an individual seller. You can also list your property online.
Property portals such as MagicBricks.com allow individual sellers to list one property for
free. It is also worth listing as a nominally paid service as the portal offers additional
services for the fee.
What is considered as the right time to exit a real estateinvestment?
Real estate is not a get rich quick investment route. It pays off only when one investsin a property for at least 3-4 years. Even with a long-term investment horizon, one
needs to have a clear exit strategy in mind before one buys real estate as an
investment.
How to make a safe exit from real estate?
Selling the property as fast as possible in challenging market conditions is a wrong
investment strategy. The only safe and consistently profitable route is long-term
investment. This is why it is extremely important to know what will happen a few years
down the line to the property market in general, the location and property in
particular and ones own finances. A savvy real estate investor must know unrealised
gains are meaningless and when to take money off the table.
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What all things should be kept in mind before exiting themarket?
The property investor must decide on the investment horizon (period between
purchase and re-sale). A detailed analysis has to be done on the tax impact of
exiting a property investment. Expenses such as legal fees and brokerage expensesneed to be factored in pre-payment penalties for early loan closure and stamp duty
impact for the buyer must be considered. Irrespective of the timing, a property
investor must always focus on having the highest-quality asset base. This means the
quality and specifications of the building, the specific location, the depth of the
infrastructure and accessibility.
Is the commercial market bleak as compared to theresidential market?
Commercial property market has been hit more than residential property due to
slowdown in industrial growth. Surplus commercial realty space has also put pressure
on lease rental values. Commercial projects in Tier-2 cities have been negativelyimpacted by escalation in construction cost and weak demand for commercial real
estate.
What documents are necessary if one wishes to sell off hisproperty?
The main documents required to sell a residential property are the housing society
share certificate and the sale/purchase deed of the property. The Sale Deed confirms
that the land is in the name of the seller and that he has the right to dispose it off. If
What is considered
the right time to
exit a real estate
investment?Real estate pays off
only when one
invests in a property
for at least 3-4
years. There is no
scientific method
to calculate but
one should exit a
property based on
its return on
investment
achieved and cost
of funds.
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the property has changed hands more than once, the buyer may also ask for a copy
of the previous deeds, in order to confirm the authenticity of the deal and property.
What are the documents I need to sell a property in a housing
society?The housing society share certificate and the sale/purchase deed of the property are
the main documents required to sell a residential property. If the property has been
sold and bought multiple times, a copy of previous deeds may be required to prove
the authenticity of the deal. Other than these, copies of Stamp Duty and registered
house documents will also be needed. In case of property being mortgaged, these
papers will be held by the bank and you can use a photocopy of the required
documents to initiate a deal. Depending on the kind of property and ownership,
some more documents, such as a No-Objection Certificate from the housing society
and a documented consent in case of jointly owned property, may be required.
Can a Non-Resident Indian sell his property in India? Who canhe sell his property to?
Yes, an NRI can sell residential or commercial property in India. He can sell to:
l A person resident in India the definition of resident in this case will be as per
Foreign Exchange Management Act (FEMA)
l An NRI
l A Person of Indian Origin (PIO)
g u i d e t o b u y i n g a h o u s e
Can an NRI/PIO/
Foreign National
buy property in
India?Yes a NRI/PIO/
Foreign National
can buy Property
in India.
NRIs can own
non-agricultural
NA land only.
If you haveagriculturist
relatives you can
buy agricultural
land, in the name
of your blood
relatives.
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What are the
benefits of
investing in
commercial realestate compared
to residential for a
salaried person?
It is better to invest
in a residential
market where
demand is fairly
predictable.
Commercial real
estate is influenced
by multiple factors
including corporate
requirements.
However, an NRI can sell agricultural or plantation land or a farm house only to a
person who is resident in India and a citizen.
Can an NRI sell and repatriate proceeds of property received
as a gift?Yes, an NRI can sell property received as a gift. The sale proceeds of such property
should be credited to NRO account only. From the balance in the NRO account,
NRI/PIO may remit up to USD 1 million per financial year, subject to the satisfaction of
authorized dealer and payment of applicable taxes.
l Anuj Puri, Chairman & Country Head, Jones Lang LaSalle, India
l Kunal Banerji, President, M3M Group
l Vikas Vasal, Executive Director, KPMG India (The Times of India)
l Niranjan Hiranandani, MD, Hiranandani Group of Companies
l Kaustuv Roy, ED, Cushman & Wakefield
l Sunil Mantri, CMD, Sunil Mantri Realty (The Economic Times)
l Ramesh Bhojwani, a Mumbai-based financial expert (The Economic Times)
g u i d e t o b u y i n g a h o u s e
Our panel of contributors for this chapter are:
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