(PropRover – 16 Sept 2018) Buyers do a lot of research about new locations before narrowing down on one, when buying a plot for investment purpose. The location is selected based on various factors
Proximity to any Existing or Proposed Major Development
Existence of Access Roads
Distance from Main Road
Extent of Availability of Developable Land Around the Locality. (Too much availability would impact price growth, as evident from the Shamshabad story)
After finalizing allocation, the buyer starts evaluating available projects around the locality to invest. Very often, this is where major mistakes are done.
Price of plots in a locality can vary by several thousands of rupees per square yard. The difference is driven by future resale price. Future resale price would be high if one layout scores high for all the above points compared to the other.
Don’t get trapped into buying cheap because the market has already determined that the potential is low. That is why the price is cheap!
For example, the cost of plots in area close to Shamshabad Airport on the Bangalore Highway side (CLOSE to Airport not in far off Kothur etc.) was above Rs.5000/sqd in 2007–2008. However plots behind the Airport in localities like Mansanapally was less than half. While Mansanapally and host of other areas have NO resale value even now, the prime areas prices have multiplied by 4 or 5 times with strong resale.
The most important driver of future pricing would be VISIBILITY of your plot to a future buyer. Only localities with main roads connecting important places will have regular traffic. The inner localities like Mansanapally for example would have little voluntary traffic. When people travel, they see the layouts and development. It registers in their minds. And later they would look to buy, there.
The cheap location will remain hidden away from buyer’s eyes for a long time, making your investment worthless, since you can’t find a buyer to sell it! .
16 Sep 2018