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Guidelines for achieving maximum returns on real estate investment in 
India 
Aggregated and Prepared by: www.nirrtigo.com...
Guidelines for achieving maximum returns on real estate investment in 
India 
Aggregated and Prepared by: www.nirrtigo.com...
Guidelines for achieving maximum returns on real estate investment in 
India 
Aggregated and Prepared by: www.nirrtigo.com...
Guidelines for achieving maximum returns on real estate investment in 
India 
Aggregated and Prepared by: www.nirrtigo.com...
Guidelines for achieving maximum returns on real estate investment in 
India 
Aggregated and Prepared by: www.nirrtigo.com...
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Guidelines for achieving maximum returns on real estate investment in india

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Looking to invest in real estate in India? What are the major factors or elements that you should pay attention to in order to maximize your returns on property investment? find it all in this detailed document.

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Guidelines for achieving maximum returns on real estate investment in india

  1. 1. Guidelines for achieving maximum returns on real estate investment in India Aggregated and Prepared by: www.nirrtigo.com Green Realtech Projects Pvt. Ltd Real Estate Projects India | User Ratings & Reviews | Common Cause | Discussions | Research Page Guidelines for achieving maximum returns on investment: Investment in immovable property is an attractive proposition for diversifying an investment portfolio. Considered a sound investment, it is nonetheless essential to make an in-depth study of the property to be acquired along with its present and future potential. General Guidelines Residex/Indices: Carefully study the market trends of rising and falling property prices. Use monthly/quarterly/yearly data, wherever available, to calculate seasonable changes in prices. Market conditions may change, and if supply exceeds demand the market conditions may turn negative. Analyze the investment: A thorough analysis of the property involving the expected monetary benefits associated with the acquisition and development/ownership needs to be undertaken to assess investment profitability and feasibility. Planning the project: Take into the account the most profitable use at which a site can be developed and plan a project accordingly. Analyze the site in terns of typography, feasibility, etc. The project, once completed should be marketable and cater to needs of targeted end-users. Infrastructure and Investments: Surroundings are an important component of every property. The better the surroundings, the higher the costs. Investments in yet to developed surroundings will help contain costs. Upcoming infrastructure projects such as schools, roads or shopping centers add to the growth of appreciation in value of investment. Rate of return: Calculate the rate of return on investments. Rate of return is the future stream of income or cash flow from the capital to be invested in immovable property. For example, a commercial venture will yield a higher rent than a residential property in the same area.
  2. 2. Guidelines for achieving maximum returns on real estate investment in India Aggregated and Prepared by: www.nirrtigo.com Green Realtech Projects Pvt. Ltd Real Estate Projects India | User Ratings & Reviews | Common Cause | Discussions | Research Page LEGISLATIVE ISSUES Consider the taxes applicable while investing in immovable property and the taxes applicable on the capital gains, if any, thereafter. TDR/Floor Space Index/Floor Area Ratio: Transfer of development rights (TDR) is a valuable right permitted by a State Government and is represented by a Certificate from the City Administration stating that the owner of a property has a right to additional Floor Space Index (FSI) at the specified rate in his real estate projects. Income Tax: Sections 22 to 27 of the Income Tax Act, 1961 deal with computation of Income Tax payable on Income from House Property. Zoning Laws: Zoning regulations are in operation in all the major Cities and Towns in India to regulate the use of property within their jurisdiction. Agricultural, industrial, residential, commercial, recreation and forest areas are clearly marked on City Maps. The process of changing the permitted usage of property to another with the permission of Competent Authorities is generally referred to as conversion of property from one type to another. Property Laws: Land is a subject falling within the powers of the State governments under the Constitution of India and hence, property laws in India may differ from State to State. Besides the local laws, several laws enacted by the Central Government also govern acquisition and ownership of property (including an interest in property) through purchase/sale, transfer, mortgage, inheritance or gift. These include the Registration Act 1908, Indian Contract Act 1872, Transfer of Property Act 1882, Special Relief Act 1963, Indian Evidence Act 1872, the Indian Succession Act, Urban Land (Ceiling and Regulation) Act 1973, and the Land Acquisition Act 1894. Municipal Laws: According to the Model Municipal Law of the Government of India, infrastructure planning which includes water supply, drainage and sewrage, solid waste management, roads and transport system accessories, fall under the purview of municipalities.
  3. 3. Guidelines for achieving maximum returns on real estate investment in India Aggregated and Prepared by: www.nirrtigo.com Green Realtech Projects Pvt. Ltd Real Estate Projects India | User Ratings & Reviews | Common Cause | Discussions | Research Page PROVISIONS IN STATE SPECIFIC LAW According to the Constitution of India, land is a state subject; hence, laws and legislations governing land vary across states. Laws and legislations along with rules and regulations can change according to the social and political changes, which may directly impact the return on investments. Rent Control Act: Rent legislation provides payment of fair rent to landlords and protection of tenants against eviction. The Central Government proposed a model rent control legislation in 1992, which was circulated to all states. Rent legislation provides payment of fair rent to landlords and protection of tenants against eviction. The Central Government proposed a model rent control legislation in 1992, which was circulated to all states. Foreclosure: This right to foreclosure is available to the mortgagee under the Transfer of Property Act. Mortgagee may exercise this after the mortgage money has become due and before the decree has been made for redemption or the mortgage money has been paid or deposited in the court. The mortgagee has a right to obtain from a competent court a decree that the mortgager, shall be absolutely debarred of his right of redemption or that the property be sold. Property Tax: Property tax is a levy charged by the municipal authorities for the upkeep of basic civil services in the city. In India, it is the owners who are liable for payment of municipal taxes. Stamp Duty Charges: Stamp duty is a legal tax and under the Constitution of India, the power to levy Stamp Duties is divided between the Centre and the States. Payment of stamp duty is an important step while purchasing or selling immovable property, as it gives validity to property transactions. Stamp Duty needs to be paid on all documents which are registered and the rate varies from state to state. Land revenue: Land revenue is a direct tax which is levied and collected by the State Governments. Each state has its own Land Revenue Act and these Acts cover the collection of revenue, the maintenance of land records, survey for land purposes and records of rights and alienation of revenues. Land revenue levied on any land is normally assessed with the reference to use of land for the purpose of agriculture, residence, industry, commerce etc.
  4. 4. Guidelines for achieving maximum returns on real estate investment in India Aggregated and Prepared by: www.nirrtigo.com Green Realtech Projects Pvt. Ltd Real Estate Projects India | User Ratings & Reviews | Common Cause | Discussions | Research Page INVESTMENT IN DIFFRENT ZONE AND PARK SEZ Zones: Special Economic Zones (SEZs) can be set up by a foreign company either alone or jointly with another foreign or public or private company or the Central or State Government. SEZs are under the purview of the Special Economic Zone Act, 2005 IT Parks: IT Parks or Information Technology Parks are vast commercial complexes spread over acres of land housing the basic infrastructure and facilities required for any IT business firm. Many State Governments have policies in place for private participation in developing IT Parks with incentives such as additional FSI Industrial Parks: The Industrial Parks Scheme 2008 was announced to provide momentum to the manufacturing sector and to encourage developers to create infrastructure facilities for manufacturing units. Recognizing the need to enhance returns on real estate investments, the Securities and Exchange Board of India (SEBI) introduced the Real Estate Mutual Funds, the Real Estate Investment Trusts and the Real Estate Venture Funds that allows retail investors to invest in real estate in a more flexible and convenient manner. Source: National Housing Bank
  5. 5. Guidelines for achieving maximum returns on real estate investment in India Aggregated and Prepared by: www.nirrtigo.com Green Realtech Projects Pvt. Ltd Real Estate Projects India | User Ratings & Reviews | Common Cause | Discussions | Research Page About NirrtiGo NirrtiGo is owned and founded by Green Realtech Projects Pvt. Ltd. NirrtiGo is an online real estate platform to find, discuss, review, rate, and track real estate & property in India.

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