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  • Category: Investments

    Scope of gains on investments in real estate


    Confused between investment in real estate versus financial? Searching for scope of returns from real estate investment after 5-10 years? Find advice from financial experts here.

    Today there are many avenues for investing one's money. Bank FDs, Post Office deposits, Shares, Mutual funds, Real estate, Gold etc. etc.

    People invest in above different entities as per their knowledge and understanding about the expected gains for their investments. Though some gains like in Bank deposits are known before hand but others are to be speculated. Real estate is one such area.

    What in your opinion will be the gain in real estate investment in next 5-10 years if a person goes for it today?
  • #148444
    Its very interesting query. Its totally unpredictable. I find , than real estate, shares is OK because investment purpose in real estate is too much which is not affordable for a person to start his business. where in real estate he has wait and learn more about it to be in profitable. But in shares you can grasp quickly on which to invest. But developers are always in profit because in small square feet they construct multipurpose for business or multistoryed flat's which value in crore's. Real estate investment in next 5-10 years may definitely come up but can't calculate the exact profit in returns. Its wise not to go for huge investments in real estate.
    For example :
    The Indian property company planned an IPO of Rs28bn in 2010, but did not launch because of weak market conditions.

  • #148454
    Investment in real estate is going to fetch you good returns. Actually, after demonetization, the real estate business slowed down a little bit again picking up. Earlier days lot of black money was floating in this business. The difference between actual purchase value and the registered value was very high. But now cash transaction has become less, here also transparency is increased and the purchase value is same as that of registered value. So the total money transactions will be in open only.
    The land values are increasing. So it is profitable to invest in this business. The exact return percentage will depend on many points.
    The place where you are investing and the amount you are going to invest will have a say in deciding on the exact return on your investment.

    drrao
    always confident

  • #148459
    Deleted
    I love chocolates and ice creams!

  • #148468
    It is difficult to predict the future of speculative investments. Still people do it believing that - no risk, no gain.

    Real estate, share market, mutual funds, gold etc are some of such areas where risks are to be taken for speculative gains.

    Generally these areas are for long time investments as it is seen that they generally give better than fixed income products in long runs.

    Real estate investment depends on geographical locations also as fast developing places will have a better appreciation.

    Real estate investment eying a horizon of 5-10 years is a good choice especially in big cities where land value is increasing day by day.

    Thoughts exchanged is knowledge gained.

  • #148478
    Considering the current trend where the investment in the real state does not look so encouraging because of lesser demand from the customer's side. Moreover, the Banks have been a bit cautious in sanctioning loans because of piling up NPA.
    With the passage of time, the current trend would reverse with the positive steps being taken by the Government by giving relief to the prospective customers such low interest - rate for the housing loan which will ultimately boost up positive trend. We have heard slogans from time to time where our prime - minister has proclaimed that there should be homes of each and every individuals by 2020. The reduction of GST from 12 percent to 8 percent in the housing sector seems to be a great relief in this direction.
    It may appear that the investment made in this sector would not be rewarding at this stage but in the long term there is every possibility of appreciation in the real state since we would witness exponential growth in terms of population and some buyers would come out with an hefty offer for the estates especially located in major cities.

  • #148483
    Money you invest in real estate will never dilute that is why we call it REAL estate.
    You can expect appreciated return on the land and the building value will be depreciating. It is very important in which location (Metros or Suburbs) you invest and what type of property it is. Whether you buy a house or a commercial property with shops or godown. Real estate investment will give definite gains but liquidity is not easy.

    If you want to invest in shares, identify good companies and invest in long term. Stocks are volatile, So periodic review of companies performance in which you invest need to be done. Investing in right stocks will give bigger returns . Stocks can be liquidated easily.

  • #148499
    Real estate is always a good investment which will grow only. As land is acarce, land price is always shooting up.

    However after the demonetisation and the various mandatory and statutory requirements to be complied, the number of transactions have come down. This is because(it is believed) that real estate is one major area where the black money dealings are maximum. So the government wants to tighten that area. In this regard a lot of measures to prevent benami/black transactions are being taken by the government. Computerising registration, making photo of the seller and buyer, compulsory PAN and Aadhaar etc are a few in this regard. Centralised data storage and retrieval in case pof real estate dealing and documents etc have all contributed to reduction in real estate transactions.Another reason is the RERA act.

    However all those will be just temporary. The artificial escalation in prices will soon stabilise as per demand and supply. Honest and genuine transactions ill get their place and real estate sector will boom again.
    So if you can patiently wait for some reasonable period, your patience will be rewarded.

  • #148515
    The financial experts are strongly advising the common investors (please note the word ''common'') not to invest heavily in real estate. There are various reasons behind this advice. These are lack of regulations, the absence of uniform regulations in different states/union territories, the prevalence of corrupt practices, unhealthy alliance between dishonest politicians and criminals in real estate and for various other reasons. Due to the artificially high rate of property, the scope of appreciation of real estate has been very limited. In fact, in major cities of India the real estate price has started depreciating.

    So, the common investors must not go for investing in real estate on a large scale. Even if they insist to go for investing in real estate, the investors must invest through Real Estate Investment Trusts (REITs).

    Beware! I question everything and everybody.

  • #148600
    Investments
    Any tool that gives you better yeild than a bank FD is a good investment tool. There are plenty of choices and realestate is one of them. An ideal investment portfolio of an individual will include
    1.Equities
    2.Mutual funds
    3.Gold
    4.Real estate
    5.Unsual investments (antiques,currencies,stamps etc).

    How much we allocate into each of the above depends the risk appetite, age of the investor and the time period of large financial commitments and the time frame that they are willing to lock the money in.

    Conventional 'Real-Estate'
    Realestate was traditionally applied to owning a peice of land. The huge price boom, unregulated investments, unaccounted investments brought in unwanted attention of land-sharks, bogus land deeds, land mafia and land squatters of all which meant that the land you own can potentially be lost. On top of this came the global economic trends and demonitisation, this led to a slump in realestate ( for example in certain parts of Andhra,TamilNadu and Karnatka) and is now slowly getting corrected.

    Choosing to buy realestate physcially
    Developing cities, developments in the peripheral city limits would be a good option. One can go in for a plot of land or an apartment. When deciding choose on the seller/developers reputation, proximity to schools,colleges, hospitals, metro stations and parks. Good amenities and connectivity is the key apart from location. Upcoming hubs of IT,finance,trade districts, close to a SEZ(special economic zone).Many developers now offer plots of land within a gated community, these are little expensive than the neighboring small plots but gives a better security and re-sale value.

    Present day 'Realestate'
    Currently real-estate is applied beyond a plot a land, it can be applied to
    a. Mutal Funds specifically focussed on realestate developers/builders/infrastructure
    Aditya Birla Real Estate Fund
    ICIC Prudential India Opportunities Real Estate Fund
    b. equites of construction groups
    Oberoi Realty
    Godrej properties
    Shoba Ltd
    DLF

    c.Real-estate investment trusts (REIT - here the fund is allocated to a group of resources related to building or developing land/properties). This allows smaller lots of investments with greater transparency, better returns and spreading the risk. Blackstone-Embassy REIT is reported to be India's first upcoming REIT.

    So, real estate would be a good option provided you choose wisely, any investment has a risk including the safe debt MFs, it is how we choose, how much we invest. I would suggest to have a good financial planner or a wealth management firm, choose from one of the above and explore the options of Alternate Asset investment options. In India, the current scenario has all the negatives factored in ( barring a major market collapse), you can consider real estate with a 5-10 year horizon. It is worthwhile remembering that cashing physical real estate investment can be tricky and often cannot be done quickly unless it is a prime property. If you try to encash it in a hurry, you'll end by getting less value as it would be looked upon as a distress sale.


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