Things to keep in mind while investing in property

Things to keep in mind while investing in property

Investing in a real estate property comes with a lot of terms and conditions. When you decide to invest in a property, you may find that the situation is completely different from what you have in mind. To avoid the confusion and legal hassles later on, there are a few things you should keep in mind when you invest in a property.

1) Background of the builder
Real estate deals involve large sums of money. When you buy a property, you make huge upfront payments followed by regular EMIs. So, after buying the property, you don’t want to find out that the property or the piece of land is under litigation. Experts recommend that you do an extensive background check on the builder, just to be on the safe side. Check out his past projects to verify his authenticity.

2) Ensure all documentation is proper
When you zero in on a property, you should ensure that all the required documentation for the property is in order. For instance, if you buy a residential property on the outskirts of the city, you should ensure that the land in discussion is not an agricultural land. Get a no-objection certificate (NOC) from the development authority in the city to avoid legal hassles. Similarly, ensure that you obtain the necessary approvals for the entire layout of the project from the local authorities in the city.

3) Total cost of the property
In order to make the deal exciting, many brokers often mention only the basic cost of a property. However, when you sign on the dotted line, you may find out that there are additional costs included such as development fees, parking charges, club charges and other statutory charges. Adding up all these additional charges can escalate your costs pretty quickly. That’s why you should always ask for the final cost of the property before you make the transaction.

4) List of banks financing the project
It is no secret that many real estate projects in cities across the country are simply languishing because of lack of funds. The project may have kicked off very well but without enough cash to complete, banks may hesitate to finance them. That’s why, when you finalise a particular property, see which all banks are ready to fund the project. Go through the list and select the bank that offers a loan with the best rates that are suitable for you.

5) Check size of property
If you are investing in a residential property, remember that the ‘super built-up’ area is different from the actual size of the apartment. The super built-up area that is generally mentioned in advertisements and brochures includes common areas in the apartment like the lobby and the staircase. In reality, the carpet area of the apartment could actually be almost 30% lesser than the super built-up area. Ensure that you always go by the carpet area and not by the super built up area to avoid any surprises later.

The bottom line
As an investor, you are paying good money for a property. In return, you need to ensure that you are getting what you pay for. By keeping the above points in mind, you can make good investment decisions when you plan to buy a real estate property.

Disclaimer: Investment in securities market / Mutual Funds are subject to market risks, read all the related documents carefully before investing.


Things to keep in mind while investing in commodities

If you wish to diversify from traditional investment products like bonds, shares and mutual funds, trading in commodities is an interesting idea. But where should you start and how should you invest? Here are some things to keep in mind when you invest in commodities1) How to start investing in commoditiesThere are a lot of different products you can choose. Gold, silver, crude oil, natural gas and agricultural products are some of the popular options. But where should you start? Well, it is always good to begin trading in a commodity you know. For example, if you work in the mining industry, you may have sufficient knowledge about metals. Similarly, if you work in the confectionery industry, you may be updated with regular changes in the price of sugar. Having a basic idea of a commodity can be a good starting point. 2) How to tradeIn commodity trading, an investor decides to buy or sell a commodity at a pre-determined price on a specified date in the future. There are different ways to trade in commodities. You can purchase Exchange Traded Funds (ETFs). Some funds invest in a commodity or a specific sector. Others diversify and invest in many different sectors. If you are a novice investor, it is best to allocate your capital into different assets so that you can minimize your risk. You can also invest in stocks of companies related to commodities. 3) Manage riskMetals, agricultural products and petroleum products are all clubbed under the title commodities. However, this does not mean they are all the same. Different commodities have different risks. Some of them have small price movements during a day while others show great volatility. Identify your risk appetite and invest accordingly. You don’t want to find out any unwanted surprises after investing. 4) Create a stop lossLosing money in the financial markets is nothing new. Most investors make wrong investments from time to time. But those who create a stop loss can rebound from these losses. For example, would you rather lose Rs 10 or Rs 100? The answer is obvious, right. Trading in commodities can be a bit risky, especially if the commodity is volatile. By creating a stop loss, you can manage the risk and minimize your losses. 5) Be preparedTo gain success in the commodities market, you need to be prepared. Be updated on the latest events (nationally and globally) that influence commodity prices. Identify the factors which influence the change in prices of a commodity and take appropriate investment decisions based on these factors. Also, don’t forget to improve your trading strategies through research and analysis. This is very important in a commodities futures market.ConclusionThe commodities market is influenced by many factors. Government policies, macroeconomic factors and global events are some of the key influencing factors. As an investor, it may not be possible to control all these different factors. However, you can control your own emotions. And this is a very important trait in commodities trading. In addition to the above points, remember not to let fear or greed influence your investment decisions. Do your research and invest confidently and over time, you can enjoy the fruits of your investments. Disclaimer: Investment in securities market / Mutual Funds are subject to market risks, read all the related documents carefully before investing.

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Trading vs. Demat account – which account is needed for different investments

Demat account and trading account: both of them are one and the same, right?Wrong.Demat account and trading account are very different and serve different purposes. Let’s explore the differences between the two.Demat and trading account: what are they?If you wish to invest in the stock market, you need both a demat account and a trading account. But what exactly is the difference between the two?Well, a demat account is needed to deposit and hold your stocks when you buy them. Think of a demat account as a savings account (or a storage facility) for your stocks. Just like how you can deposit and withdraw money from your bank account, you can deposit and remove stocks from your demat account whenever you like.On the other hand, a trading account is needed to place ‘buy’ and ‘sell’ orders in the market. A trading account is necessary to conduct any transactions in the stock market. You can register with any online stock broking firm to create an online trading account. When you register, you are provided with a unique ID that allows you to trade in the market.How are the two accounts different?Both demat and trading accounts are necessary to trade in stocks. However, they are quite different. Here is an example to help you identify the difference.Imagine you want to buy a loaf of bread from your local supermarket. You pick a loaf and go to the billing counter. Here, you remove a specific sum of money from your wallet and pay the cashier.In this example, the money stored in your wallet is similar to stocks stored in your demat account. Removing the money from the wallet and paying the cashier is like trading. For this, you need to have a trading account.Which account is necessary for which investment?A major question among investors is: which account do I need to conduct different investment transactions?Well, let’s find out.If you wish to trade in stocks, you need to have both trading and demat accounts. Here, a demat account is needed to store your stocks while your trading account is necessary for conducting the transactions.When is only a demat account necessary?In case of Initial Public Offerings (IPOs), only a demat account is necessary. When you apply for an IPO and you are allotted shares, the shares are transferred to your demat account. However, this is applicable only as long as you decide to hold these shares in your account. But if you wish to sell these shares at a later date, you need to have a trading account.When is only a trading account necessary?If you wish to trade in instruments such as futures, options or currency, only a trading account is required. However, if you wish to trade in stocks, you require a demat account. This includes even intra-day trading when the stocks are held in your account for a single day or less.ConclusionMany investors confuse between trading account and demat account and mix up the two of them. However, the two of them are very different and both of them are required for trading in stocks. Make sure you know the difference before you start your investment journey. Disclaimer: Investment in securities market / Mutual Funds are subject to market risks, read all the related documents carefully before investing.

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With its “client-first” approach, skilled and experienced team members and state-of-the-art research and technological capabilities, you can be rest assured that your financial interests are in safe hands.  Disclaimer: Investment in securities market / Mutual Funds are subject to market risks, read all the related documents carefully before investing.

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  • Gold Exchange Traded Funds (Gold ETFs) - Overview & how to invest in it

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During volatile market conditions, they can help to stabilise or improve the overall returns for you.7. Collateral: Gold ETFs are accepted as security collaterals for loans or capital borrowings by many financial institutions. Why is investing in Gold ETFs better than traditional forms of gold? You do not need to worry about impurities or adulteration in the metal As ETFs are held in electronic form, there are no storage related issues or costs Easy trading on the stock exchanges and hence high liquidity Real-time tracking of investments No mark-ups costs such as making charges, wear and tear involved The price of Gold ETFs remains the same throughout the country. However, the gold prices can vary from one location to another.  How does Gold Exchange Traded Fund work? The investment is converted into unit of gold basis the cost applicable at the allotment time. For instance, the cost of gold (per gram) on a particular day is Rs. 3000. Ms. X wants to invest Rs. 60,000 in Gold ETFs. Her investment amount will get translated into 20 gold units. At the back-end, physical gold acts as security for these ETFs. For example, if you invest in Gold ETFs, the entity at the back-end purchases gold. They act as the custodian for the investment and also guarantee for the purity of the metal. The stock exchanges assign the responsibility of buying and selling gold to authorised members or participants which in turn can be used to issue ETFs. These are usually large companies. As a result, these authorised members ensure that there is parity between the gold cost and ETFs. How to invest in Gold ETFs? Gold ETF investments are a simple affair.1. Choose a broker or fund manager: Many financial institutions (including banks) offer Gold ETF products. Similar to the online share trading, you would need to reach out to a fund manager or a firm which will trade on behalf of you.2. Demat and Trading Account: In order to invest in Gold ETFs, you need to have a demat account and an online trading. You can apply for these accounts online with the broker or such service provider by providing details like PAN, Identity Proof, residential proof, photograph and a cancelled cheque (for bank account linkage).3. Online Order: Once the accounts are in place, you can select the desired Gold ETF and place the order through the broker’s online portal. You can also opt for Mutual Funds which have an underlying Gold ETF.4. Confirmation: The placed orders are then routed to the stock exchange. The purchase orders are matched with the corresponding sell orders and accordingly executed. A confirmation email or message is sent to you. Who all should invest in Gold ETFs? Gold is a relatively safe and stable investment. Its prices do not fluctuate as much as equities. Hence, Gold ETFs can be a good choice for you, if you do not want to take too much risk. Additionally, since these ETFs are tradeable easily on the stock exchange, they are useful if you are looking for an investment opportunity with high liquidity. Hence, it is a good option for you to diversify your portfolio. So, if you meet the requisite objective of investment, Gold ETF is a good option for you as well. Things to keep in mind while investing in Gold Exchange Traded Funds Here are some tips that you could use while investing in Gold ETFs Gold is generally considered as a stable asset. However, you should not forget that the Net Asset Value (NAV) of Gold ETFs can also fluctuate basis market volatility As an investor, you need to bear brokerage fees or commission charges for Gold Exchange Traded Funds. Hence, you should check these costs while deciding on the broker or fund manager However, you should not make the decision on the basis of price alone. Consider the broker/ fund house’s past track record, services provided, type of clients handled etc. before choosing the service provider Do not over-invest in Gold ETFs. It is usually suggested to restrict investment in these ETFs to 10% of the entire portfolio. Final Words A smart investor knows that all that glitters is not gold. A good fund manager or firm helps choose the best Gold ETF products in India. IndiaNivesh, a well-known financial services company can help in this regard. With their rich experience in the Indian market and in-depth understanding of the financial ecosystem, they have helped numerous customers to grow their wealth and fulfill their financial goals.Disclaimer: Investment in securities market / Mutual Funds are subject to market risks, read all the related documents carefully before investing.

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