Here are some useful questions to ask yourself before buying a property in India.

The issues such as price of the property are pretty obvious, and you would surely consider them. But there are a lot of intricacies that are not so obvious in first look.

If it’s a resale property -

1. What is the cash component? - The seller of the property might want some component of the selling price to be paid in cash, and also carry out the agreement on the amount that you pay in check, and not the whole amount. In such a case, you won’t get a home loan on the full price you are paying. See if you can afford to do that.
2. Is the property registered? - There are always properties that get sold on Power Of Attorney. Check if the property is included in the government registry. If not, it should be cheaper.
3. What is the construction date? - Properties older than say 10 years would definitely need a detailed look at construction quality. You definitely don’t want to end up in huge repair bills, or worse, a complete collapse only a few years after you have purchased it.
4. Is the property free from debts? - What is the mortgage (home loan) status of the property? Is it still mortgaged to the bank? Are all the bills like electricity and phone duly paid?
5. Is the property free from disputes? - Are there any law suits going on about the property? This is particularly important if you are considering purchase of a land. Lands typically do have some or the other court cases, legal hassles going on in the families.

If it’s a property in a new project -

1. What is the possession date? - The later the possession date, the costlier the deal is for you. Roughly, calculate the rent yield of the property (roughly 5-6% of the cost per anum), and use that factor to compare prices of two projects.
   For example, a ready possession property of 20 lacs is cheaper than a similar property priced 19 lacs to be handed over after an year, given that the rent yield per anum is more than 1 lac.
2. What if there are delays? - The case where possession date promised by the developer is not followed is very common in India. You can ask the developer company, to show you the registration agreement in advance, and get it reviewed from a good lawyer. It would be great, if there are strict clauses against delay of possession, without any ‘fine print’.
3. How is the super-built up area calculated? - Super built up area is a marketing trick, widely deployed in India. Typically, it will be 20% to 40% more than the actual carpet area of your property. As there is no standardization, compare properties on basis of carpet area, and calculate the ‘real’ price per sqft of carpet area.
4. What are the extra charges? - In most of the cases, the price that is advertised, is not the MRP you will pay for the property. Numerous amenities need to be paid for. They typically include car parking, society formation charges, maintenance charges, power backup, higher floor premium, modular kitchen, PoP work, wooden flooring, electrical connections etc. Check out what is included and what is not in the basic advertised cost.
5. Are all legal approvals taken? - You can ask the developer company to provide all the legal documents, such as architect certificate, municipal approvals, completion certificate draft, agreement draft etc. It is very important to understand that Indian market doesn’t have a government regulator unlike some of the developed countries, so being vigilant is the only savior for a buyer.
6. What is developer’s reputation? - This is the simplest and the most important question to ask yourself, as the legal documents are always designed for their needs. If the company is reputed, and they have done a good job in their previous projects, there is a good chance that they will want to keep their reputation, and wouldn’t take you for a ride. Paying a premium of say 10-15% for the builder reputation might be worth it in the longer term.

If it is your second home (as investment) -

1. What is the rent yield? - Typically, you would want to rent the property out. So, a property that is near some important commercial center (IT park, SEZ, commercial hub) would typically yield good rental income. Apartments generally give you easier renting out option than individual houses. Vicinity to colleges would also help because of availability of large pool of bachelor tenants.
2. Income tax & Wealth tax - You would incur income tax (for the rental income) as well as wealth tax for a property that is not your self-occupied home.
3. Growth prospects of the area (ROI)? - The issue of Return On Investment is particularly important if you are purchasing the property as an investment, and would want to sell it out after a few years.