The ups and down of the jittery stock market are probably making you look for a safer investment haven with lesser turbulence. The real estate market, although a tortoise in the story here, can be a safer and long-term bet plus an asset that, in our country, brings with it, a high level of social respect.

If you are a new entrant into the property market, especially buying your first home as an investment then you have some respite from tax as well. Presently, you can get a tax deduction of up to Rs.1.5 lakh on the interest you pay plus up to Rs 1 lakh on the principal.

Sandeep Sadh, CEO of Mumbai Property Exchange.com, tells you how you can make that perfect purchase, and how you stand to gain.

Making the perfect purchase

Step 1: Know your budgets, entry load and time frame

You need to know what you can afford to pay as EMI and the overall cost to buy the property with all incidentals like stamp duty, registration, car parking, club house charges and other sundry charges by the builder. Please remember that the entry load for investing in real estate market can be as high as 10%.

If you can spare anywhere upward of Rs.20,000 as EMI and a down payment of anywhere between Rs 5 lakh to Rs 15 lakh, you can begin investing in an under construction project with an average value of around Rs 25 to 30 lakh. This number can go up depending on your flexibility to pay more.

As a property buyer you get 3 dimensional benefits to buy under construction properties.

Firstly, you can only pay around 10 to 30% in a project as down payment, which can be partially from your own savings. The balance amount can be paid over a period of time through a home loan.

Secondly, the staggered payment is linked to the construction of the building. Typically, the amount is released to the builder/developer as per the slab and the EMIs also increase over the period of construction. Hence, for the first year, the commitment level from the buyer is not more than 50 to 70%.

If it is a larger township project then there could be some more delay and lesser payment outflow, as the time for completion of the project is nearly 3 years or so, thus staggering the payment further. Thirdly, with a low investment in the beginning the rate you have bought the property is frozen and you get the benefit of price escalation for nearly 3 years.

It is often witnessed that till the time the builder has a presence in the project or the property the prices are constantly revised upwards. Hence, in most of the under construction projects you will see that the builder is increasing the prices every quarter or less depending on the project, location etc. This also shows that the builder is giving returns to the investors periodically and the investors remain happy.

Since the markets have climbed a lot, if you are looking to buy a second home, stay put close to a Central Business District for the sake of sheer convenience of easy lease and re-sale.

For good returns one should stay invested ideally anywhere between 1 to 3 years and of course take further action depending on market conditions. You need to check with the builder if he is allowing you to sell or exit out of the project within 1 or 2 years. Some builders do not allow you to sell the property within a span of time or after making a certain amount of upfront payment. It is always advisable to get your documents. Certain builders/projects may not allow you to pay the stamp duty and registration fees as their Commencement Certificates are pending.