Set budget with buffer to include hidden cost such as stamp duty, legal fees, fire insurance, etc.
- Visit property during day and night to obtain a better observation of the surrounding.
- Check surroundings for elements that may affect the property.
- Do due diligence on the seller/ developer.
- Understand developer’s terms and conditions in case of purchase of under construction property.
Be objective when you compare & analyse property investments:
- Analyse return on investment (ROI) using realistic numbers.
- Assess the impact on your cash flow and ability to repay loan under increasing interest rate scenario.
- Keep in touch with government regulator’s policies and development progress as this will impact the return on investment.
- Avoid being distracted by emotions.
Things you must know about tax benefits on home loan:
- Home loan borrowers are entitled to tax benefits under Section 80C and Section 24 of the Income Tax Act. These can be claimed by the property’s owner.
- In the case of co-owners, all are entitled to tax benefits provided they are co-borrowers for the home loan too. The limit applies to each co-owner.
- A co-owner, who is not a co-borrower, is not entitled to tax benefits. Similarly, a co-borrower, who is not a co-owner, cannot claim benefits.
- Housing companies usually require all co-owners to be joint borrowers to a home loan. Loan providers specify who can be a joint borrower for a home loan.
- The tax benefit is shared by each joint owner in proportion to his share in the home loan. It’s important to establish the share for each co-borrower to claim tax.
- The certificate issued by the housing loan company, showing the split between principal and interest for the EMIs paid, is required for claiming tax benefits.