Since time immemorial land has been an integral part of the investment portfolio of Indian investors. Purchasing land not only gives you a sense of ownership, but it is also an investment whose value appreciates multifold as time passes. Not only that, it is a safe investment avenue for investors who are willing to wait.
What is a residential land?
A residential land is a piece of land purchased to construct a home for self-use or to-let it to tenants.
Here are the 3 things you should check before purchasing a residential land:
Purchasing a residential land may include some tedious documentation along with some ground work, nonetheless these are important steps you must follow before purchasing a land.
Check the documentation:
So, if you’ve planned to buy a property then get ready for some significant paper work. The process involves collecting and providing various documents to ensure smooth ownership over the property. Here is a list of important property documents that are required for buying a property:
- Title deed
- Encumbrance certificate
- Original land deed
- Tax receipts of the land
- Release certificate
- Local approvals
- Non-agricultural residential order
Do the ground work:
Once the documents are verified, check the ground realities
- Measure the land and check for the measurements as specified
- Check for various factors like location, documents, area that will help in appreciation of the land’s value over time.
- Also, check that the land you are buying is not a vested land or an agricultural land.
Get the documents ready:
Once the documents are verified and the ground work is done, you must proceed towards the legal work required to acquire the land.
This step includes drafting the sale agreement which must cover the following points:
- The agreed cost of the land between both the buyer and the seller.
- The time period within which the actual sale must take place.
- Particulars of the land
- The advance amount paid by the buyer
- Cancellation clauses
Can you avail a loan to purchase a residential land?
While banks sanction up to 90% of the value of an apartment as loan, one can avail a maximum of 60-70% of the value of the land as loan from a bank or housing finance company for purchasing a residential land. The remaining amount must be financed by the buyer.
Apart from the remaining value of the land, the buyer must also finance charges like registration cost and legal fee and stamp duty charges. Plot loans also carries higher interest rate than home loans.