7 Important Economic Factors To Look At While Buying Residential Projects in Mumbai

Living in the city of dreams is very much possible for everyone, thanks to countless residential projects in Mumbai. If you do your research right and visit multiple properties, you will surely find a perfect home for yourself. But while you explore various houses in and out, do keep the money matters at the back of your mind. Owning residential property in Mumbai has several hidden costs and additional expenses that will increase your overall budget by tens of thousands.

So make sure to look at these economic factors throughout your journey of buying a new house to make the most of your investment that you can call "home".

1. Property Tax

Whether you are looking at residential projects in Goregaon, Bandra, Marine Lines or anywhere else in the city, you are entitled to property tax. With effect from January 1, 2019, any property above the carpet area of 500 sq. ft. is bound to pay the property tax. Failing to pay this tax leads to penalties and limited real estate rights in future. Brihanmumbai Municipal Corporation (BMC) follows a capital value-based system for property tax calculation as per the Bombay Municipal Corporation Act, 1888.

If you wish to get a basic idea of the property tax of the home you are considering, you can compute it online at the BMC website by entering Ward, Zone, locality, area, usage, occupancy type, total carpet area, year of construction, floor type etc.

1. Extra Cost For Amenities

Modern homes by the most renowned real estate developers in Mumbai come with a long list of amenities, facilities and features that can give a serious upgrade to your lifestyle and living experience. But not all residential projects in Mumbai come with a package deal that includes the cost of additional amenities in the price quoted to you. It is essential to know how much you’ll have to pay to access these features beforehand to make the right decision. After all, paying for everything will constitute your final amount of expenses and you surely don’t want that amount to burn a big hole in your pocket.

1. Home Insurance

Securing your home and belongings is as important as securing your life. But you must check how much securing your biggest asset will cost you every year. Home insurance premiums differ depending on the size of the house, precious possessions that the house has, amenities that come along, where the home is located, security systems available with the house and much more. So look for a home whose home insurance will be affordable for you. Accordingly, you can select a home insurance plan with the right deductible and premium amounts that you feel comfortable with.

And while you are at it, you can also check with real estate developers or your agent if those residential projects have any tie-ups with specific insurance providing companies.

1. Brokerage, Fees & Convenience Charges

Remember that when you plan to buy a house, a lot of people will be involved in the process. You will have to take assistance from many professionals. And all these people won’t help you for free unless you plan to work with your family members and friends. So while looking at residential projects in Mumbai, do something else first. Talk to multiple brokers, real estate agents, mortgage lenders, third-party service providers and others to evaluate and compare the services they provide and how much they charge for the same. Once you shortlist the right professionals, include these costs in your overall budget.

1. Registration & Stamp Duty Charges

People often forget these extra costs, and hence, these costs are generally termed as hidden costs of home buying. But don't make this mistake or you will be disheartened later.

To buy a house, you need to complete several paperwork and formalities. And all those paperwork will cost you extra. The charges keep changing, but you can assume them to be somewhere around 5%-6% of your home’s value. And there is no comparing and looking for options for these charges as these are some fixed charges that directly depend on your home’s price. So take these into consideration as well while sketching a budget for home buying.

1. G.S.T.

You already know that almost everything you buy in India has a GST cost levied on it. Residential properties in Mumbai are no different. Don’t think that you have considered all the hidden charges, professional fees, registration costs, etc. added to the house’s cost and you are done. Be ready for this extra tax as well. Make sure you are updated with the latest GST rules for real estate buying so that you don’t get fooled by developers or your real estate agent. Demand the same percentage while buying a house.

1. Processing & Other Fees Of Home Loan

If you are planning to take a home loan to buy your new home, you will need to pay a processing fee to get your home loan application started. This processing fee includes administration costs and other costs incurred by the loan provider for different processes like background checks, credit report checks, document verification, etc. Again, include these charges in your overall home-buying budget to get a clear picture of exactly how much you are expected to shell out. Look for a loan provider offering lower processing fees but a high value of services. And if you get value-added services along with the usual loan, nothing can be better than that.

And the last one (or rather the first), needless to say, will be the actual cost of the house - the most basic thing to consider while looking at various properties. But you may wonder why it is crucial to not miss out on these things.

Reasons For Economic Factor Consideration While Comparing Residential Projects In Mumbai

• To assume a rough budget beforehand and align all your sources of income accordingly.

• To avoid getting conned by anyone involved in the process.

• To avoid missing out on any cost that might lead to cancelling the deal later.

• To avoid any confusion at any point throughout the process.

• To find and afford the just-the-right home of your dreams.

And the last tip - always look for transparent deals. Now, how to identify "transparent deals"? Well, you practically can’t! But what you can do is ask several questions during your meetings with all the real estate developers in Mumbai. Try to find every bit of information about the economic factors mentioned above to clarify all of your doubts and avoid confusion (or surprises) later.

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