RERA – Impact on Home Buyers

Investing in real estate is no more a risky task for the buyers since the RERA (Real Estate Regulation Act) has come in practices. The home buyers are now assured the delivery of the property on the time which is committed by the builders. RERA has brought the transparency within the real estate services. According to the RERA act, implemented since May 2016, builders need to give the timely delivery of the projects to the buyers.

“No more will unscrupulous smaller builders or even larger organized developers be able to take buyers for a ride,” said JLL Residential (JLLR) Chairman Anuj Puri.

Here is how RERA has impacted on Home buyers:

As the act is in favor of buyers the impacts are positive for them.

Buyers will get the project in hand on committed time:
As per the law, builders cannot delay the delivery of the projects. The picture where buyers didn’t get the possession of their flats even after paying the full amount to the developers will change as the builders will be charged 2 percentage points above State Bank of India’s lending rate to the homebuyers. The penalty doesn’t ends here; RERA also commends imprisonment of up to three years for unfaithful developers.

Builders will have to take the responsibility of defects:

According to the law the builders are supposed to take the responsibility of the entire structural defect in the building for five years. But the law doesn’t clears everything about the structural faults, so there can be differences between the opinions of the buyers and the builder which can cause the disputes among them. RERA also states that it is mandatory for the promoter to rectify the structural or workmanship defects brought to the notice of a promoter within a period of five years starting from the date when the possession is handed over.

Charges for the carpet area only:
The builders are not allowed to charge money for the outside area which means the buyers need not to pay for the area except the area which is within walls.The builder can’t charge for the super built-up area, as they are practicing it today, where you get 1,200-1,300 sq. ft. carpet area even if you are promised 1,500 sq. ft. house, where the left 200 sq. ft. are counted for the common places and balconies etc. The new law omits such kinds of practices.

No structural changes without buyers’ approvals:
Under RERA, regulatory bodies and appellate tribunals have to be set up in each state to resolve the disputes between the builder-buyer within 120 days. Moreover, promoters cannot make changes in the original design of the project without buyer’s permission. Promoters should have the approval of two-thirds of the buyers in a project before making any change in the number of units or other structural changes.

Builders are prohibited to use buyers money for other projects:

The developer will need to transfer 70% of the money received from the buyers to an escrow account. This money cannot be withdrawn without the approvals of engineers and the charted accountants of the builders which mean the money withdrawn as needed at the each stage of construction. This is how the buyer’s money will be prevented from to be used in any other project.

Apartment Complex Real Estate Investing With Demographic Analysis

Demographics change and population trends influence almost every decision in modern life from city planning to healthcare provisions, from education needs to life style living these and other demographic factors determine the shape of our society and the growth of urban living or suburban living. Consider a real estate investor whose livelihood depends on people changing homes or jobs. Economic mobility is a key determinant in the future of this business, as is the economic health of the region, jobs and the amenities of the area for singles or families. Recent weather stories that have impacted the US will also be a change in short term and long term demographics or urban area.

Development planning relies even more on demographic data to determine priorities. The average age of the population is a major factor in the type of housing that will be required over the next couple decades. As well as the influx of immigrants or evacuation victims form hurricanes (Harvey, Erma, Maria) to large urban areas that have job opportunities and supportive families. This can be a temporary need or if families resettle in the area, a permanent change of address and an opportunity to raise the rents due to high demand. Inventory and demand in these areas could be an untapped opportunity.

For investors, the stakes are just as high. Investing in commercial real estate requires the ability to forecast where there will be a growing population and where the population’s average income will be increasing for a squeeze on housing. Investors are best prepared to watch the news, see changes dues to weather or unpredictable changes in the environment as well as business that expands across the USA.

In fact, commercial property investment requires a deeper understanding of demographic data; it is not just the population trends that need to be considered, but the demographics of the competition, business climate and weather changes. Road traffic patterns can also make or break an investment, especially near busy intersections in competitive markets.

The demographics of traffic can add to the complexity of making a commercial real estate investment. Given the high stakes of real estate investment, whether in residential, commercial rental properties, demographic data reports and market segmentation data are even more important. Can you begin buying land or buildings now at a reasonable market price as you await for the demand to build? I believe yes you can. A matter of fact, there are good properties on the market today that deliver good returns (ROI) in current conditions. The demand for displaced workers and residents may only be six months away from today. Take advantage of this opportunity and diversify your portfolio by working with a good real estate broker.

Winter Is Coming – It’s a Great Time for Real Estate Investing

You’ve no doubt heard the concern that real estate sells best in the Spring and Summer – that the worst time for buying and selling houses is Winter.

And, Winter is coming! So what should you do?

First of all, don’t panic! We’ve been investing in real estate full time since January 2005. Here’s what we’ve found, not only for ourselves, but for most of the other investors we know. True: the number of calls you’ll get from sellers and the number of offers you’ll get from buyers will decline.

However, also true: the quality of those contacts will be much higher. Both buyers and sellers calling during these months are serious! So no, Winter is not the season to panic. In fact, some of our most profitable deals come at the end of the year.

I’ve heard many investors say that December and/or January are their most profitable months. Why?

A lot of investors as well as real estate agents get out of the business during these months. They cut back or stop their marketing all together and often use these months to vacation. So, as long as you’re still active, you’re the one who will get the buy/sell calls.
Many high net worth individuals need to use up cash to avoid taxes before year end and they turn to real estate. Now is a great time for you to be calling CPAs and tax advisors to let them know how you can help these clients.
While families are together over the holidays, decisions are made regarding what to do with their parents’ home, or that it’s time to stop dealing with inherited properties. These sellers call us in January needing to sell estate properties.
Fewer buyers during the holidays means less buying competition for us as investors and fewer buyers means sellers reduce prices to get their homes sold. This is the perfect time to buy at discount and begin renovating so your property is back on the market in time for prime selling season, Spring!

Bottom line, don’t panic. Get excited and be prepared to provide solutions for those needing to buy and sell in the winter months. The market is less active, meaning less competition, and the buyers and sellers who are out there are far more serious than the casual shoppers who come back out in the Spring.

What has been your experience in the Winter months? What will you do differently this Winter?

Here’s wishing you Happy Winter Investing!

My name is Karen Rittenhouse and I’ve been investing in real estate full time since 2004. I currently buy about 60 houses per year, most of which I wholesale.