Er. Jagvir Goyal*
Reputations take years to build but a moment to destroy. A great and consistent effort is required to build one’s reputation. And an equal and steady attempt has to be made to maintain it. Ask the importance of building one’s reputation from a reputed apartment builder. No one else can better tell the benefits and dividends it brings.
Impatience is an enemy of reputation. Keenness to become super rich overnight often proves suicidal. It is just like killing the hen laying a golden egg everyday. A builder has to lay certain principles for himself and stick to them by not getting swayed by what others do. Here are certain golden guidelines for an apartment builder to follow to build a good reputation and enjoy good profits in real estate sector:
Stick to the deadlines: A builder’s reputation suffers a jolt when he is unable to handover the flats or apartments by the stipulated date of completion. Some delay in completion of the flats or apartments is obvious and acceptable to the apartment buyers. However, in many cases, even the structural framework is not completed leave aside the finishing works. Cases have been noted where the project doesn’t take off and committed date of handing over of flats expires. In such cases, the buyers begin doubting the builder’s credibility and there is nothing more injurious than prevalence of such a feeling among the flat buyers. A builder must try his best to stick to the deadline for completion of a project. Paying some penalty for late completion of apartments hardly restores the buyer’s confidence who are losing much more on account of interest on loan or rent being paid.
Fight recession: Boom and recession are a part of real estate sector. Whenever recession prevails, real estate sector is among the worst hit sectors. The buyer is simply absent from the market and there is no cash flow. Lack of liquidity hits the pace of projects. Builders find themselves cash-starved, have no money to invest unless the buyers pay their installments. A vicious cycle sets in that needs to be broken. In such times, the builders should not lose their sanity. Every situation and problem, howsoever tedious, can be tackled with a cool mind. The only requirement is to accept the reality and redraw one’s plans as per prevailing circumstances. This is the time to take out the reserves created during boom times and to invest them into the projects in hand. In addition, a builder has to be on the lookout for acquiring a project on sale or some land or property as the prices shall be down and a good bargain can be made.
Rationalize profits: Boom times allow earning good profits. The cost is devised in such a manner that hidden profits are available under many items. Land prices are high and can be projected accordingly in the cost of apartment while the builder may have bought it at quite low rates. Instead of milking the apartment buyers, the builders need to rationalize their profit percentage. Hidden profits need to be eliminated. Only a percentage profit after accounting all overhead, administrative and establishment expenses should be added to the actual cost of apartment. Greed leads to doom. Follow the principle of ‘produce more, sell more with less profit per unit and see your profits build up.’
Avoid concessions: The advertisements issued by many builders today offer multiple concessions to the apartment buyers. ‘Pay nothing and book your flat!’ says one. It translates into a different message: Get hooked and then we’ll squeeze all the amount from you. ‘Prices slashed by Rs. 10.00 lacs’, says another. Earlier, the prices were inflated, it tells in fact and dents the builder’s reputation. The customer is never befooled by these advertisements. He rather looks curiously at them, trying to read deeper and knowing where the catch lies. Such ads therefore leave a negative impression. No body can believe that a builder will sell an apartment by causing a loss to himself. The builders should lay clear and transparent terms in simplest language. ‘Come out of the maze of concessions!’ a builder’s advertisement should read and show firm and final prices.
Build Track record: Good Track record of a builder impresses the people most. To build trust, the builders should exhibit previous works completed successfully in their advertisements. Reputation travels fast. When it becomes known that people living in flats built by a builder are happy and have no complaints, bookings for the next project swells fast. Good response and bookings are essential for successful commissioning of a new housing project. These provide finance and confidence to the builder. Recently, many builders have been found complaining of lack of enthusiasm among flat-aspirants. People have become choosy too. They compare the locations and specifications before making a buy. The change from a seller’s market to a buyer’s market is often quite evident. In such times, the trust of people won by a builder through his past performance provides an extra edge to him.
Choose Good location: While planning to setup an apartment complex, keep three things in mind: Location, Location and Location. Location is one of the most important factors that speeds up the booking of flats and apartments. A site having proximity to a good city never loses its customers. Additionally, road connectivity, existence of the main highway near the complex, availability of essential communication services like telephone, broadband, mobile phone towers, internet facilities with Wi-Fi technology, provision of cable network or DTH satellite attract customers to a site like a magnet. Proximity to railway station, airport and bus stand also matter a lot. A builder must have an eye for good locations. These don’t lose value even in recessionary times.
Observe area transparency: After reading the brochures issued by a builder, a buyer is going to develop a certain idea of the size of the flat that he is going to own. A builder must take care that the customer’s dream is not shattered when his apartment is handed over to him. There should be full transparency in the deal. This, if taken care of, is going to pay dividends to the builder. Super areas often mentioned in the advertisements include percentage of many common areas. The carpet area and plinth area of an apartment are much lesser than super area. The buyer should there be given an idea of what he is going to get for the price he is paying.
Develop Services fast: The water supply and sewerage services should be developed fast by a builder. In addition, laying of metalled roads should be given priority. A builder should keep in mind that he’ll have to re-lay the road carpet on completion of the project. Often the builders leave the roads un-metalled, telling the visitors that the carpet shall be laid on completion of construction activity. Such colonies and complexes give look of an unfinished project and lose customers. In addition to roads, water supply and sewerage, provide street lighting. If the services are in progress when flat-aspirants pay visits to an apartment complex, the development works leave a good impression on people and help in building builder’s reputation.
Use Structural Design: A builder should get the building designed from a competent structural engineer. He should make the structures earth-quake resistant and never adopt a design evolved on basis of thumb rules. The mindset that a structural engineer will make the buildings costlier needs to be changed. A structural engineer will rather help in saving money by providing economical RCC work. Thumb rules always lead to extra expenditure. Using designed concrete mixes instead of traditional 1 : 2 : 4 or 1: 1 ½ : 3 mixes save money by saving cement consumption. Above that, a customer is delighted when he comes to know that proper structural design has been used. Thus the builder earns on two counts: Savings in expenditure are made and good reputation is built.
Develop secure environment: Here is a golden tip: A builder should always provide proper boundary wall around the apartment complex. The boundary wall should be at least 7 feet high. It not only generates a sense of security among the buyers but adds exclusivity to the project. In addition, provide barbed wire fencing of proper design with at least 4 runners over the boundary wall. Provide gated security. Let there be round the clock guard at the gate to scan the visitors. Sense of security plays a great part in tempting the buyers to buy a flat. Further, a builder must take full and actually effective fire fighting measures. He is not to create towering infernos. Later, when the complex is fully handed over, the builder should get trained a few residents in operating the fire fighting system at the time of handing over the buildings.
Pollution free environment: Choosing a 60:40 ratio for open area and occupied area helps in developing a pollution free environment in a complex. A feeling of greenery all around wins the customer’s hearts. People have become aware of the importance of living in clean environment. Builder should get the saplings for trees planted at the earliest so that these develop size by the time the complex develops. In addition, they should concentrate on landscaping and develop parks by hiring a landscape consultant. Developing a jogger’s track brings a healthy feeling to the apartment buyers and raises the builder’s stature in their eyes.
Additional facilities: Some finer points if taken care of, bring good returns. Putting sign boards in the complex, showing directions and flat numbers, completing the 24X7 power back-up arrangements for essential services cost little but pay back heavily. Still better if the district administration is approached to make local buses run up to the apartment complex.
Look for Durability: In addition to using structural design, the builder should work towards making his buildings stronger and durable. Current practice is to ignore quality and supervision and cover all defects through attractive finishes. The builder should choose durable materials and specifications rather than brittle but attractive looking products. This will bring long term benefits. A builder should never think that he has to pass off the guarantee period only. Let the apartments be as maintenance free as possible. For this, provide full treatments against leakage and termite. This done and builders may find their next project fully booked before notifying the same in the press!
Follow the guidelines and enjoy a sustained reputation. Happy building!
* Author, Technical & General books; Columnist, leading journals and newspapers; Recipient of many awards and honours.
