33.39 Should you consider buying a Property in Goa?

Points to note:

Let's deep dive into Goan Real Estate.

Pros and Cons of Buying a Property in Goa

There are always 2 sides to any story and the smart move would be to analyze both sides and then make a decision.

Pros

  1. Higher ROI

    As mentioned, the rental yield in Goa is relatively higher than in Tier-1 cities across India. 
    Thus, the return you’ll be making on your investment (ROI) can be expected to be higher.

  2. Low ticket size

    Properties in Goa are not as expensive.
    For example, my villa in Goa might look expensive.
    However, if you try to buy a similar property in Delhi/Mumbai, the price would easily be 3x [provided you find such a property]*

  3. Lower maintenance charges

    The maintenance charges for your property in Goa are on the lower side compared to other cities.

  4. Short-term rental opportunity

    Prime properties in Goa are usually closer to the beach - and these are highly preferred by tourists who want to get away from city life and relax by the ocean.
    Such properties can provide a HUGE boost to your short-term rental business.

CONS

You might get enticed looking at the clean South Goan beaches. However, you must be cognizant of the weaknesses of this market.

  1. Portuguese succession law

    It is a little bit difficult to buy properties in Goa because the state still follows Portuguese laws.
    Many a time, people sell their land, and builders even start constructing on it.
    But it can happen that the land originally belonged to someone who is now settled in Portugal - and they can still claim a right to it due to earlier ambiguity in the succession.
    Thus a big hassle is getting a clean chit on the history of your land.

    How to do that?
    The easiest way - get a bank loan.
    When you take a bank loan, the bank also gets involved in the property that you're purchasing. 
    They will do all due diligence in determining the authenticity of the documents.

    You might have to pay some charges to get approvals,
    But this is a small cost that can ensure the safety of your property from any possible disputes.

  2. Builder mixes

    Builders try to trick people into buying bad properties at crazy prices. 
    This happens in all cities but in Goa - especially North Goa - it is rampant.
    Reason: Property prices in the city have shot up tremendously in the last 2-3 years.
    Builders have taken over the Goan property market and have inflated the prices much more than what they are worth.

  1. “COMBO DEAL” Trap

    Today, everyone in Goa is aware of the potential of the Goan property market and builders want to make the most of it.
    While selling properties, some builders make the purchasers sign a “lucrative” combo deal.

    • Buy X property at Y rate for Z% ownership

    (or)

    • Buy X property and sign this “Airbnb/Short-term rental agreement” where he will do the rental business for you.

    There are 2 issues here:

    1. You will pay EMIs on your house loan for the property you have purchased – losing money on this end.
    2. You will pay a lot of commissions on whatever money is being made on your property - again, losing money.

    This can be a loophole for people who are not aware of the nitty-gritty of such practices.

  2. Local Administrative Issues

    Buying property in Goa has its own complications.

    i. Garbage collection.
    There are properties in Goa where big villas have been built but the mechanism for garbage collection has not been sorted out. 
    This doesn’t happen if you live in a society.
    However, it is a major factor to resolve while constructing independent villas.

    ii. Clearances
    - Getting local clearances can be a big hassle in itself.
    - In Goa, people sell land which is called sanad land or non-sanad land. Sanad, in simple terms, means that that property is clear for development.
    - You can buy the land and start constructing it according to the clearances received.
    - However, this isn’t the case for non-sanad land.
    - People who buy non-sanad land can face complications in getting clearances for their lands.

The bottom line is:
Goa made sense to me since I understood the market well and it suited my goals.

Your best bet is to do the same research.
And make the best decision.

Source

Thoughts 🤔 by Soumendra Kumar Sahoo is licensed under CC BY 4.0