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RE business in Chennai collapsing

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RE business in Chennai collapsing

Last updated: August 17 2009
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  • Re : RE business in Chennai collapsing

    Originally posted by contra View Post
    1000% ROI in 10-12 years that is long term.

    What was the cost of 1 acre of land in Perugudi in 1999......What it is now in 2009? Humble farmers who owned acres of land in Perungudi-Velachary are now Crorepatis......I know a government servant who sold some ancestral land in OMR and now travels in a BMW. That is what I meant by Long term.

    Similary now if I buy 1 Ground for 95 lacs, in 2024 it could be 10 Crores. That is long term investment. I am 30 now, with that amount and some other investments I can retire at 45.

    I have patience. During the journey there could be downs & ups but I won't bother because I will sell only in 2024.

    Some people are trying to time the market by making statements like exactly by 2012 RE will correct by 50% ...by 2015 by 80% then they will buy. That is foolish nobody absolutely nobody can time the market...If they can then they should be Bernard Madoff's cousin brother.

    Those who invested in 2007 expecting 600% return in 2010 are jokers...I am not talking about them and neither am I interested in such blokes.
    Contra,

    Been reading your posts.Appreciate your optimism, and preparedness.

    Since you are able to afford entirely in cash and planning to hold for long term, your bullishness makes sense.

    RE gives good returns long term undisputedely.

    But, How many years is long for RE?This long term can spawn generations too for many properties to attain even 10%+ CAGR.

    From your posts I gather you are looking for individual house or flats from a reputed established builder.In case of flats the returns will be lesser because of the less land share, building depreciation and high maintainence.Rental income if properly invested can only compensate to some extent.

    Anyways, My concern about your assertion is about How long are you willing to hold?10-15 years is a very short term in my opinion to get the 15%+ CAGR you are expecting.RE appreciates in spurts and is not linear.

    Just like how one cannot perfectly time the entry, one cannot time the exit also.

    Agreed, people who bought in OMR 15 years back are worth crores now.But same is not the case with people who bought in North Chennai.

    Most people are wise only in hindsight, and those who have profited in RE are only who claim that they had the vision after their property appreciated.The reasons for the rise would be something they never anticipated.

    In most cases the fruits from RE investment are only realized by our descendants and not in ones own lifetime.

    Like many on the board feel, I also reiterate that

    RE investment is a hedge against troubled times like how gold is a hedge against inflation.

    Returns from RE are not the only attractiveness.RE is something like a footprint you leave back once you are long gone.

    I hope you are not treating RE like a commodity.It isnt and never will be however regulated the RE industry and developed our country gets.

    Since you are a consultant, I am assuming you understand the importance of diversification and not being over leveraged and your portfolio reflects the same.Dont bet your future and retirement life just on the returns from RE.

    All the best to you.

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    • Re : RE business in Chennai collapsing

      wonderful post

      Comment


      • Re : RE business in Chennai collapsing

        Dear friend,

        Your views expressed are quite true.

        ks2071746

        Comment


        • Re : RE business in Chennai collapsing

          Originally posted by nabishek View Post
          Contra,

          Since you are a consultant, I am assuming you understand the importance of diversification and not being over leveraged and your portfolio reflects the same.Dont bet your future and retirement life just on the returns from RE.

          All the best to you.
          NAbhishek,

          Thanks for spending the time. If you have been reading some of my posts carefully I have always also said Gold nowadays seems to be a good investment, I had also spoken about stocks even indirectly giving examples of some stocks which are profitable companies having very good P/E multiples. I have not talked about putting everything into real estate.

          [Note: I didn't want to hurt anyone. I have personally earned money in real estate. I own a 2200 sq.ft apartment in Sarjapur Road ( without a single paisa in home loan) which I have given on rent to a Senior Director level person. I myself still a young person. I did not study in IIT, IIM or MS in US like most of you are. But it was real estate which made me, gave me this power to talk. So I will always swear by Real Estate.]

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          • Re : RE business in Chennai collapsing

            Dear friend,
            Like you, there are many who have vastly benefitted by investing in RE. One should time it properly and wisely for maximisng the benefit.

            ks2071746

            Comment


            • Re : RE business in Chennai collapsing

              Originally posted by contra View Post
              NAbhishek,

              Thanks for spending the time. If you have been reading some of my posts carefully I have always also said Gold nowadays seems to be a good investment, I had also spoken about stocks even indirectly giving examples of some stocks which are profitable companies having very good P/E multiples. I have not talked about putting everything into real estate.

              [Note: I didn't want to hurt anyone. I have personally earned money in real estate. I own a 2200 sq.ft apartment in Sarjapur Road ( without a single paisa in home loan) which I have given on rent to a Senior Director level person. I myself still a young person. I did not study in IIT, IIM or MS in US like most of you are. But it was real estate which made me, gave me this power to talk. So I will always swear by Real Estate.]
              Good and nice to know that you are well postioned.

              You dont need to have a IIT/IIM degree to be a successful investor.

              You just have to

              1.Understand and make well informed decisions while allocating towards your investment potfolio, and hold on to your investment strategy.
              2.Constantly monitor your money.
              3.Proactively anticipate the market swings.
              4.Reactively make the right switches and enter and exit promptly.
              5.Be prepared and strong to face the risk and benefit while riding the tide.

              Today we have various instruments to make money, but the fundamentals of creating and accumulating wealth has not changed.

              Continue sharing your thoughts and experiences.All the best again.
              Last edited April 24 2009, 04:19 PM.

              Comment


              • Re : RE business in Chennai collapsing

                Dear friends,

                Please read the following article "Real estate companies set to post dismal full-year numbers"

                “DLF, in our opinion, will have to reverse more than Rs200 crore of revenues booked earlier, owing to discounts that it offered on pre-sold apartments and likely cancellations in its Chennai project,”

                Like the saying, an ant can bring down an elephant.Looks like our chennaites have demonstrated they wont lie low while being taken for a ride and not delivering on promises even if its a big brand name.

                Comment


                • Re : RE business in Chennai collapsing

                  Dear friends,

                  Though I do not fully agree, ( please note- I do not fully agree, rather than disagreeing) one of my friends have been maintaining that apart from anything else, one's luck also plays a major part in his/her making money in RE or share market. Some chaps, whatever do they touch, irrespective of up or downtrend, they reap the benefits/return, whereas, a few chaps only lose on every thing they touch even in boom time.

                  ks2071746

                  Comment


                  • Re : RE business in Chennai collapsing

                    hi KS

                    it depends 50% on ones luck,i believe in luck when it comes to anything only after that its about hardwork

                    Comment


                    • Re : RE business in Chennai collapsing

                      Originally posted by ks2071746 View Post
                      Dear friends,

                      Though I do not fully agree, ( please note- I do not fully agree, rather than disagreeing) one of my friends have been maintaining that apart from anything else, one's luck also plays a major part in his/her making money in RE or share market. Some chaps, whatever do they touch, irrespective of up or downtrend, they reap the benefits/return, whereas, a few chaps only lose on every thing they touch even in boom time.

                      ks2071746
                      I know what you are saying KS.

                      Some people naturally have the ability to perform well in business and investment.The acumen cannot be explained and attributed to any acquired skill, technique or lineage.They just seem to know how.Sometimes these people come about as selfish and opportunists, but the fact remains, they are very shrewd.

                      People who lack this ability compensate it by working hard and putting lots of more effort and by listening to good advice.They prepare themselves, to allow life to grant them all they aspire.

                      Whether there is something called luck is an unexplained phenomenon.I believe it exists and it plays a major role in timing of ones success,Its like a catalyst.

                      For luck also to work, all the reactants(skill/hard work) should be present at the right time(?) and the condition(affordability/availability/circumstances/good will) should be conducive.

                      I also believe in "synchronicity".For no reason suddenly everything would fall in place as expected or fall apart completely.This is applicable for everything in life.Though there are spiritual explanations, I havent heard any convincing explanation till now on why it is so.Sometimes
                      circumstances just force us to wait for the right moment and opportunity.

                      Something thats constantly taught by all self development books and courses.People who take conscious efforts to keep track of their surroundings and are very focussed on the objective and goal they want to attain are more aware of the opportunities and are the first to grab them.
                      Last edited April 24 2009, 07:54 PM.

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