SMART SOCHO: How to get max value for your property in a bad market

Selling or renting property in a rising market is easy but the real challenge lies in getting the max value when the market has hit rock-bottom, as it has today. Rajesh Kulkarni lists a few handy pointers on what you can do to maximize your realty returns when the chips are down.

Sanjay Deshpande, a retired civic employee was a worried man. He had approached a broker to sell his Virar flat three months ago. Initially the broker would call him with daily updates, the number of potential clients he had shown the house too, their level of interest and so on. But off late, the calls had become intermittent at best. The few times that Deshpande called him, he was told that customers were not showing any interest, before the line was disconnected.

It wasn't like Deshpande needed the money for his own survival. For that his modest pension was sufficient. He needed the cash to fund his only daughter Shobha's marriage which was due in the next three months. The slowdown in realty market was clearly not helping and there was little Deshpande could do, but wait or sell at a loss.

Deshpande's experience is a clear pointer to the larger picture that the real estate industry finds itself in today.  With sales down to an all time low, new launches have followed suit, further as per industry reports, there are atleast 700,000 ready units still waiting for buyers, which at the present rate will take another three years to sell.

Adding to the misery is the significant drop in transaction volumes, notwithstanding the 8-15 percent drop in property prices across most major cities. With things not expected to improve anytime soon, investors have left the field for greener pastures while end users continue to sit on the fence in the hope of prices dropping even further.

The silver lining? Most of the slowdown, falling sales and rising inventory applies to flats in the under-construction category, a clear sign that buyers have lost faith in the builder's ability to deliver on time.  This in turn has put ready-to-move-in flats at the top of a buyer's wish list, since there is zero risk of construction delays.

That being said, flat owners who wish to sell or rent their ready-to-move-in property have a good chance of earning excellent returns, provided there are no pending legal or financial encumbrances on the property and all the relevant property ownership papers are at hand to be shown to potential buyers or tenants on demand.

Read on to find out which are the key factors that impact the value of your property if you are looking to rent or sell it.

LOCATION: The fundamental requirement for all property transactions. Flats for sale or rent in cosmopolitan housing societies or co-ops in well-developed areas with adequate connectivity and social infrastructure (retail hubs, educational institutions, healthcare facilities, hotels etc) are generally preferred as compared to similar flats in under-developed or upcoming locations.

In crowded metros like Mumbai for example, where parking is a vexed issue, additional perks like a parking slot, and an unobstructed approach road to the premises can also fetch you a premium on the market rates, as will a building developed on freehold land (as opposed to a leasehold plot).

OVERALL AMBIENCE: Smart buyers and tenants will always look at the overall living ambience and not just the interiors of the flat or apartment. So it definitely matters if your society is a clean and well-maintained one, sans leaky exteriors and cracks with ample electricity and water supply.

In the case of high-rises and towers, a multiple lift/elevator facility and presence of modern fire-fighting equipment (in working condition) is definitely a huge plus, as also adequate security and surveillance features.

Good neighbours and a cosmopolitan environment are also important factors that command a lot of weight among both tenants and potential buyers. Always remember a well-maintained home in a well-maintained society can demand a premium and can get it too.

AVOID CLUTTER: If you have made up your mind to rent or sell your property, make sure you remember to remove/dispose all unnecessary furniture, clutter, appliances and residential surplus to maximize the open area. Size does matter and both buyers and tenants would prefer a living space that offers the maximum on this front.

If recently renovated, a property may fetch a better price but not always as some buyers may prefer to customize as per their individual taste and requirement. Cluttered properties are a definite put-off and a strict no, if you expect to get a good price/rent for your flat/apartment.

SMART HOMES ARE IN: Today's young buyer (or tenant) is tech savvy and prefers to be seamlessly connected with the rest of the world. In a world dominated by mobile apps, a home with basic tech amenities like Wi-fi on tap, a reliable source of power supply, great network connectivity and in some cases the option of housekeeping services can ensure that your house fetches top dollar both in terms of rents or sale.

Similarly, furnished homes or semi-furnished flats are a preferred choice among the younger generation who want to minimize the hassles of moving in and don't mind paying more to get it.

CORRECT PRICING:  One of the more crucial aspects in any property-related transaction. Getting the pricing right is all about finding the right balance between want you want and what you can get (as per existing market conditions, condition of the property etc). The golden rule here is to be reasonable as far as possible and not let greed get the better of you.

Pricing the property too high is a guaranteed way of scaring of potential buyers or tenants; conversely price it too low and buyers may begin to suspect that there is something wrong with it.

So if you are getting absolutely no takers for the price you have quoted, it's a sign that your price may be too high or (in some cases) to low. As a rule of thumb, keep track of what similar properties in your building or locality are getting and try to stay as close to them as possible.
     
Flexibility is key here so don't hesitate to come down a few notches in terms of the price if the situation so demands. Alternately, if you want to sell your home to buy a bigger one and are not getting the right price, it may make sense to opt for a home loan to fund your purchase and wait for prices to improve before disposing of your old home.