Different Challenges in Buying Plots or Residential Lands

In the real estate industry, buying plots or residential lands has always been considered one of the most reliable investment forms. This comes with the trait of price appreciation, which can help generate a significant earning if you sell the plot later. 

For these reasons, the demand for plots orresidential land has been at an all-time high post-pandemic. With the increasing demand for land, it is important to note that purchasing them would not be easy. 

When you plan to buy a plot of residential land, you are likely to face certain challenges and complexities. This article deals with some of the major challenges in buying plots. But, before that, you need to understand why investing in plots can be an attractive idea. 

Why Should You Invest in Residential Land?

If you plan to purchase lands or plots, consider doing so in cities. Most Indian cities like Ahmedabad and Gurugram are growing. And, in the coming years, they are likely to boom further. Purchasing a plot in these cities is no less than a golden opportunity.

Compared to various investment options like mutual funds or equity, residential land is a stable and uncomplicated one. For example, when you are investing in equity or mutual funds, you have to investigate certain technical aspects, like company valuation, market conditions, government policies, and so much more. On the other hand, when you are investing in real estate, all you need to know is the demand. 

Furthermore, investing in plots or residential lands is less risky than the other forms of investment. After all, you will get a consistent and considerable yield if you ever plan to sell. However, if you are new, you will likely face some challenges in buying plots that your real estate agent can help you overcome. 

Challenges in Buying Plots or Residential Land

Your land or plot purchase is going to be a significant investment. Therefore, you just cannot move forward with it without research. There are certain challenges that you may face, which can be quite overwhelming for someone new to the market and this article explores a few of those challenges.

Understanding the Different Types of Land

Before buying a plot, your first instinct is to visit that land, isn't it? Once you visit the plot, you should try to distinguish whether it is a residential plot or agricultural land. While both of them appear to be the same, they are not. Agricultural lands usually have some limitations. 

Residential lands are used especially for building housing properties. On the other hand, agricultural lands are less expensive and meant for agricultural purposes. Before you reach an agreement regarding the purchase of residential land, you can consult the revenue office.

If you do not understand the differences between the types of land, you should not move ahead with property purchases. It is because not following so can lead to legal matters, and you may lose the property, too. 

Legal Due Diligence and Documents

One of the major challenges that most people face while buying plots is understanding the legality of property. To understand the legality of the property, it is crucial to check if all documents are present. Out of all documents, the Title Deed holds the most value as it determines that the seller owns the respective property legally. 

No matter what type of land you are purchasing- residential, commercial or agricultural- the Title Deed should be clear. To understand if the Title Deed is accurate, you can search for the property's registration records on the government website. 

Apart from the Title Deed, you should also consider determining the accuracy of the Encumbrance Certificate. Before buying the residential land, you should ask the owner to provide the Encumbrance Certificate of the property for the last 30 years. This helps you understand if the property has any legal dues or not. If the Encumbrance Certificate is clear, it means that the property is debt-free. Before purchasing the property, you should check if all the paperwork is clear to ensure legal security. 

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Clear Land Title

A lot of properties, even in today's time, are under litigation. Therefore, you must check the property's paperwork before making a purchase. Non-registered real estate agents often try to sell off such under-litigation properties at a lower rate. 

When the land title is not clear, and you end up purchasing the property, it can hurt you later. This is because you may lose the money and the land if the court orders you to do so. If you buy any under-litigation property, you should check its history. This gives you a better idea about the property by which you can make a clear and concise decision. 

In certain cases, some plots in India have multiple owners. If that's the case with your property, you must get written consent from all of them before you buy the land. However, it can be an expensive settlement procedure.

Location and Purpose

Most people buy land with an understanding of what they plan on doing with it in the future. For example, if you are buying a plot for residential use, you should buy it near basic amenities, like schools, offices, hospitals, etc. On the other hand, if you want to build a farmhouse, you can buy a plot a little far away from the hustle and bustle of the city. 

You can also buy a plot for commercial usage, which can be closer to your business area. You cannot consider buying a residential plot for commercial use or vice versa. You must be very clear about your goals regarding the plot from the beginning. 

Access to Amenities

Even if you're planning to build a property and put it on rent, the most basic thing you should do is check the amenities available. 

Since you will be building a residential property on the land, you will need access to cable, telephone network, electricity, water, proper sewage and so on. You must check for these amenities not only in your plot, but also in the neighbouring plots. 

Buying a residential plot with the basic amenities available around often ensures a comfortable living. However, if these amenities aren't available, it can indicate that development around these properties wouldn't be possible or might happen years later. 

Budget and Loans

The cost of residential plots usually depends on various factors such as location, scope of development, infrastructure and market demand. You should always have a budget depending on these factors before purchasing. The budget that you set should only be for buying the property. This is mostly because you may have additional expenses after purchasing the land. 

You should consult the bank about loans if you need financial assistance to meet your property budget requirements. The bank also sanctions the loans depending on the location of the property. Often, banks do not provide loans for non-revenue-producing assets like underdeveloped or vacant lands. 

How much loan you receive from the bank on property purchase depends on your credit history. Thus, you should fix a budget based on the loan that the bank offers. 

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Final Thoughts

Buying a plot can bear several challenges, but the process is smooth and easy if you are mindful. The residential properties can surely bring in a lot of good returns on investment. Before investing in these lands, you should conduct proper research. Reaching out to a professional real estate agent can help you purchase the best residential land. 

The real estate sector in India is at an all-time high. You may consider checking out some of the top-in-class properties like apartments, plots, independent villas and more by Adani Realty. Living in such properties can offer you the peace and comfort you need and deserve. Contact Adani Realty and get your hands on the best properties.