Real Estate tips: Housing price - More than what meets the eye

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There are many costs that add on to reach the final price of a property. There are many costs that add on to reach the final price of a property.
SummaryThere are many costs that add on to reach the final price of a property.

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OTHER COSTS: This includes charges for floor rise, car parking, clubhouse, infrastructure, society, maintenance, and taxes thereon.

Floor rise: Developers usually charge anywhere between Rs 60–140 per floor rise. The Shahs wanted the 12th floor and considering an average floor rise as Rs 100 per floor, the cost for 11 floors up is 11 × Rs 100 = Rs 1,100 per sq ft. Add this to base rate, which now becomes

Rs 24,100 per sq ft.

Infrastructure cost: This is a newer expense head created for keeping the base price low. This is usually a charge for common infrastructural facilities such as approach road etc. The onus is on the developer to construct it to make the project saleable. But he passes on the cost to buyers as facilities for their use. “Infrastructure cost has come into existence as municipal corporations are charging ‘development charges’ from the developer. However, it is insignificant considering the number of flats constructed in the same project. But some developers have now found a new avenue to make extra money,” says N Mehta, a Mumbai-based property consultant.

Car parking: Legally, the developer cannot sell open or stilt space for parking. However, charges for closed or podium parking has no upper limit. The standard range in a high rise project in metros ranges anywhere from Rs 7 lakh to Rs 20 lakh, and in some cases even touches Rs 40 lakh. This is a compulsory expense.

Clubhouse: Another mandatory cost. Almost all big projects have club houses. The burden is further divided into two segments: clubhouse construction and club membership charges, usually a one-time payment for life.

Society and connection: This includes society formation charges, share money, legal charges etc which leads to around Rs 2 lakh on an average. This is a statutory charge. However, several developers are charging extra for electricity and water connections and provision for piped gas.

Maintenance: Developers are charging maintenance fee for one to two years in advance, even before possession. The estimated maintenance cost for a high rise project in a metro city would range from Rs 10-20 per sq ft per month, inclusive of all taxes and society charges levied on monthly basis.

Miscellaneous: There are developers who charge entrance fee, common amenity expense, deposit against possible damage during interior works, premium for the flat located in a particular direction, preference as per Vaastu etc. All this will also attract taxes.

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