Role of Real Estate while Planning for Retirement

Today’s fast paced; insecure, inflationary and highly destabilizing environment has made retirement planning the core of every individual’s financial goals.

Having a home of one’s own was the core desire which fueled the boom in the Indian real estate sector in the late nineties. Planning for retirement has transformed from being restricted to safe government policies to market linked plans.

Cosmic India

Today with the slow death of the joint family system and the need to have a home of one’s own after the kids grow up and fly the coop, the need and prevalence of retirement communities also seem to be gaining ground.

These consist of a cluster of houses which people buy like any other residence. They are designed as per the needs of senior citizens with facilities like wheelchair friendly corridors, community kitchen, parks, hospital facility etc. Unlike usual senior living homes in retirement communities they can stay with their families.

It is one of the ways to secure post retirement financial independence via means of real estate. It is opposite of a normal home loan. Under a reverse mortgage, one gives his property to the financial institution for a fixed tenure and receives monthly installments. Even at the end of the tenure, the installments stop but one can continue to live in the property.

After individuals’ death, the legal heirs are given an option to settle the dues else the house is sold. If there is any extra money fetched from the sale, it is passed on to the legal heirs. Also, the property is reevaluated at regular intervals during the tenure and installment amount is adjusted accordingly.

In the end, to maintain a relaxed lifestyle post retirement one should start planning early and should analyze carefully the options available.

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How to buy a new house when you already own one

Buying a new house when you already own one can be tough, depending on your conditions and goals. Luckily you got experience with the house buying method, therefore you recognize what to expect to some extent, but the process may differ, depending on whether or not the second property is an investment, a dwelling house or a brand new residence. All of those situations bring variables that that weren't in play the first time around.

New House

The Housing Market

Before buy a new house whereas you already own a property, you would like to review the state of the housing market in your local area. Study the comparable sales to see the price and therefore the amount of your time homes are staying on the market. If costs are down and you’re looking for an investment or dwelling house, you’ll doubtless wish to move quickly. However, if your purchase is conditional the sale of your current residence, it's going to not be a perfect scenario whereas the market is low.

Buying a New House

The way of buying a new house process can depend upon your intentions for the new house. If you’re buying a dwelling house or investment property, you'll still own your original property; however you have to qualify to buy the new property furthermore. You got to return up with a payment and sure acquire a mortgage. Mortgage rates on investment properties are usually on top of on primary or vacation homes, so you have to expect higher payments furthermore. On the opposite hand, if you’re looking for a new house with the intent to sell your recent home, you have got to coordinate both parts of the buying process.

Selling Your Current House

Buying a new house

In a good world, you'd close on the sale of your current home a similar day you close up on the purchase of yournew one; however that's seldom the case. You have to make temporary living arrangements, if your current home sold before buying your new home. If you close on the purchase before finishing the sale, you have to carry housing expenses for two properties. Often, this can need you to get some variety of temporary finance whereas you look to finish the sale of the primary home.

Financing the Down Payment

While living in a house and experiencing the assorted expenses then you are able to realize it that a tough time is coming up with a payment for the purchase of a new house. You have to apply for a home equity loan or a bridge loan. A home equity loan has longer terms and is better after you don’t have a buyer lined up. A bridge loan works best after you have a buyer and you need only few month months to “bridge” the gap between your purchase and sale.

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Noida Extension buyers want banks to waive interest

The authority of Greater Noida is offering builders with a ‘zero period’ for paying installments. The home buyers are not too happy with it and demand from the lending banks to make all the EMIs interest free paid during the land row.

Bank

80 home buyers have formed a group and have joined hands to mount pressure on banks to waive off the interest on their EMIs. According to the buyers, banks are also to be blamed in the Noida extension real estate mess. They did not completely verify the viability of the projects which is why they charge processing fees from the buyers. They have threatened to undertake a legal action against banks if they disagree to provide financial relief to them by sharing the burden.
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Bank officials alternatively, are exploring options to deduct amount of interest from the future EMIs. They are examining legal provisions for the interest waiver.

The buyers alleged, that banks stopped disbursing further installments after the land row but continued to take EMIs from them with interest, that too, especially when they had already paid a hefty processing fee to the bank at the time of loan disbursal.


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Commercial reality market touching skyline

Reality Market at its Peak

The commercial real estate of most of the Indian cities is booming after the prolonged abeyance. The rentals will remain under control for sometime considering the plethora in the market. The report by one of the popular property consultants ‘Knight Frank’ says that, office absorption in January-March 2012 rose up by 23 percent as in comparison with 2011.

1.04 million sq ft have been total transaction of office space, both sale and lease, in Mumbai from January to March this year as compared to corresponding year which was 0.88 million sq ft. Rentals and capital prices have dropped over the last one year even when the number of transaction are increasing. Commercial space leased at the approximate monthly rentals in Mumbai in the first three months of this year was Rs 111 per sq ft as compared to Rs 120 per sq ft in the first three months of 2011. In the same way the average property price fell between January to March of 2011 and 2012. The report pinpointed that , the growing numbers are yet to take over the present supply, causing a wider gap between demand-supply over the past year causing rent and vacancy levels to remain under burden.

The primary driver of office-space market in most of the Indian cities has been the Banking, Financial Services and Insurance (BFSI) sector, transactions in office-space in IT/ ITES sector has been abridge by half due to the interminable debt crisis. The additional report by Jones Lang LaSalle reveals that, a marginal growth is expected in the rentals of Grade A offices in Mumbai by the second quarter of this year.

An expert alleges that, with a view to boost transactions at a time when the vacancy rates are high, the developers will refrain from rising rentals. He also stated that, the cue of Indian economy is not very encouraging, office occupier continue to block the widening plans across all the major cities of India.  Significant office supply is expected in Delhi and Mumbai over next few months.

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