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KBS SIDHU

Regular Income Expected or not? In many cases, one may be looking exclusively at capital appreciation. This is always so in the case of plots, unless one is purchasing a plot to eventually build on it for one’s self-occupation or for rental purposes. If rental income is expected, ones decisions would be moulded accordingly. For instances, a house with three independent portions is likely to aggregate more rent than a single big house, which cannot be segregated for renting to different families.

Similarly, if getting a higher agricultural income, proportionate to the investment made, is the dominant criteria, then one could buy land in the interior and not necessarily on the main road or the link road and a longer distance from the major cities. This would also be in the case where one wants a weekend retreat, “far from the madding crowd”.

Ability to Supervise: Any immovable property must, I firmly believe, be within the capacity of the owner to supervise from his place of residence. Properties at far-flung places cannot be looked after and can be encroached upon or cannot be managed optimally. This acts as a major constraining factor in limiting the possible location of the property that one wants to buy.

Tailor-made for personal needs: Quite often, when one buys a property, particularly in cases of residential houses/ flats for one’s personal use, one is guided by one’s present requirements. This may be reflected in terms of number of bed rooms etc. or their location on the various floors. In such circumstances, on goes by one’s preferences, scarcely realising that should the property be ever put to sale, some of the peculiar characteristics may actually depress the realisable value of the property in question. Thus one needs to be very particular in getting quaint features into a building, which might not find favour with a normal person/ buyer.

Tax breaks: Quite often a property may be purchased to save on income tax on account of capital gains. Or, one may choose to loan finance a property to claim a tax rebate on account of the interest being paid. Although these objectives may be important in themselves, there is no reason to buy a second best property to settle for what is not giving us a the value for money.

Time horizon of Investment: The time horizon of the investment is also a very relevant factor that can shape into one of the factors that shape your decision to buy a particular property. For stance, if one is expecting it to be a long term proposition, one can buy a property in relatively less developed areas, or at relatively longer distances from the city in case of the sub-urban land. On the other hand, if one wants to start living soon, one cannot choose a place in wilderness.

Planning for division among children: Often one plans to purchase a property, which he hopes one day his children would be able to take the benefit of. Although it might look as one happy family, when one purchases it, it is always advisable to buy a property that can be easily divided amongst children. It can also be worth while considering buying identical but independent properties in the same locality for the benefit of one’s children in such cases.

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