Difference between end-use homes and investment property

People usually buy homes to either stay in those or to wait for the property to appreciate before they can sell it off and make a neat profit, while generating rental income in the interim. The former is an end-user for whom the new home is a dream come true and the latter is an investor, who is solely interested in the ROI at a later stage.



Factors to consider while choosing between an end-use and an investment home

LOCATION

# End-users: Location is the most critical factor to consider while looking for an end-use home. The locality should be safe and secure and well-connected with schools and colleges, hospitals and malls and everyday conveniences like supermarkets, etc. located nearby with reliable support infrastructure.

# Investors: In the case of investors or speculative home buyers, emerging localities on the fringes of cities or suburbs often make better sense, since they can buy cheap and sell dear. Such developing neighbourhoods may not have all the infrastructure and conveniences in place yet. Hence, entry prices are likely to be low and ROI high. However, general livability index of the area is important if you want to generate rental income out of the investment.



CONSTRUCTION STATUS

# End-users: The stage of construction of your new home is absolutely critical if you are an end-user, since you would ideally like to buy a property you can move into immediately or in the near future. This would safeguard you from the double whammy of paying both EMIs (if you have availed of home loan) and house rent (if you are living in a rental apartment) simultaneously. However, ready-to-move-in properties usually command a higher price point.

# Investors: For investors looking to make a quick buck, it makes sense to book at the pre-launch or launch stage, when the rates are lower. They usually prefer selling off and exiting the project midway during the construction process and redirect the profits towards other properties. To make the maximum profit, however, it pays to wait till possession date when the margins would be much higher.

INFRASTRUCTURE

# End-users: When you are buying a home to live in, you must make sure all the attendant infrastructure is already in place. This would include proper transportation systems, easily accessible schools, colleges, hospitals and market complexes and seamless connectivity with road, rail and Metro networks.

# Investors: While buying a property for investment purposes, it is not always necessary that every piece of critical infrastructure and convenience point is in place at that moment. As long as the government’s masterplan for development of the region includes your property area and the timelines are favourable, you should be fine. By the time you plan a resale, you are likely to make a decent gain.



PROPERTY TYPE

# End-users: When you are buying a new home for your family to live in, you must figure out what type best suits your requirements. For instance, you can take your pick from a plot, house, villa or apartment, depending on your family’s preferences.

# Investors: For investors, this decision is not so straightforward. To squeeze out the maximum juice from the property later on, you must be aware of what format is the most popular in the realty industry at that point. In order to grasp the trend and the market pulse, it is advisable that you consult an experienced property agent. At Pioneer Property, our team of marketing experts is always there to guide you and help pick the right property that works to your utmost benefit.