I understand that this is probably not the right place to discuss this, but since many people are interested in Real estate as an investment, thought this would be appropriate to ask.

I'm curious how you guys manage your investment portfolio. Like what % in RE, in other forms of investment like stocks,mutual funds,FDs etc

I understand it all depends on one's priorities/interests and of course the situation they are in their lives w.r.t to age, financial obligations etc -but just looking to understand how you guys go about investing and hope we can learn from each others' ideas towards investing.

Would love you hear your thoughts and personal experiences.

To start with here's my approach. I'm a novice investor(so far have been just saving in bank and haven't bothered much, though I used it all up recently to buy a house for end use)

I'm planning to divide my investment amount as follows:
1) 60% in real estate (looking for a plot in Chennai suburbs now (Kelambakkam, Padappai, Oragadam, Sriperambadur areas).
2) 20% in stocks and mutual funds. Have never had much luck so far in identifying growth stocks. Primarily right now investing for long in blue chip companies and index funds. Also just a bit- maybe a tenth of stock investments in gold(GLD). Might sell some of these assets when I eventually end up buying a plot.
3) 20% cash for emergency funds (in FD).

Other than this I participate in my company's ESPP(Employee stock purchase plan). Not contributing anything towards retirement funds.

Can you share some of your tips?
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  • I do not invest a lot. But RE is a big portion of it.

    90% goes towards RE.
    10% bond funds (used to be aggressive stock funds, got out in Apr 2012).

    Nothing else. No company stock/gold or fd.
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  • Originally Posted by k11
    I do not invest a lot. But RE is a big portion of it.

    90% goes towards RE.
    10% bond funds (used to be aggressive stock funds, got out in Apr 2012).

    Nothing else. No company stock/gold or fd.

    @k11,
    It seems to me that's risky, yeah? Maybe I'm wrong - I think you know a lot about RE trends, but seems like putting all eggs in one basket.
    But investing in RE is a pain, as it eats away all the other investments :D When I eventually end up buying a plot, I'll have to sell off my other assets,break FD etc (kind of worried about that. ah well...)
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  • Mine is also same, more than 90% in real estate. People who diversify their portfolio will eventually break all the piggy banks for house purchase, so in a way it is better to start investing in real estate right from beginning instead of doing Math about advantage of rental over ownership.


    I see lot of people upgrading to better homes these days, just like cars. I'm sure they must be diluting their savings and other investments.
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  • Here Goes mine -

    RE : 65%
    Core Business :25%
    Emergency:10%

    % of investment is not matter for people who are with Passion ,determination ,love with what they are doing.. Even with 1% they can do wonders !

    Good luck :)
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  • Hello,
    Thanks for the posting. I think You should investment,
    Real Estate:- 50%
    Saving, FD:- 30%
    Cash:- 20%
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  • Originally Posted by randomguy
    @k11,
    It seems to me that's risky, yeah? Maybe I'm wrong - I think you know a lot about RE trends, but seems like putting all eggs in one basket.
    But investing in RE is a pain, as it eats away all the other investments :D When I eventually end up buying a plot, I'll have to sell off my other assets,break FD etc (kind of worried about that. ah well...)


    Agree, RE is the only thing that is hard to buy.

    I can afford rest of the things in life using my salary like a car, travel, etc.
    So I do not see a reason to save/invest.
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  • I was talking to a friend today - he said he saves about 20% for career growth and doesn't use that money for anything else. It's an interesting idea, he says he is not sure on what he wants to spend on immediately, but he plans to use it for starting up a business, or higher education in future(not sure if he can pull that off at his age) but he's forcing himself to spend that 20% only his career development.
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  • An interesting thread. And not surprised at the responses given that only core RE investors regularly visit/post these boards.

    My policy is as follows:

    1. RE - Every family should compulsorily own atleast one RE Unit (flat,plot in reasonably developed suburb etc) , ideally as much RE units as the number of adults in city. I would even dare say that a beginner should allot 100% of savings to buy a RE unit if he/she does not have any possibility of getting an RE unit through paternal inheritance.

    2. But after getting first RE unit (flat/plot whatever), diversify like this:

    Put 40-50% in Hard assets - RE or Gold . In RE, if one has the ability and big bucks, consider investing in Commercial RE .

    3. Put 40-% in Liquid assets - Either Equities or in one's own business or invest in part equities and part in your own career. People somehow , more in South India are paranoid about share market. Thing is one should make sincere effort to understand share market rather than try to invest based on tips. Investing through SIP in established mutual funds and/or in established blue chip companies operating for decades can never go wrong. Also one should invest in such period when share market is not hot (like now) and try to stop investing when market is too much talked about (like in Oct/Nov 2010 or Dec 2007 )

    4. Put 10-15% in FDs and not more . This is unless you are above 55 years. I am telling from my personal experience in last many years that FD is the best way to lose wealth, since inflation is the biggest enemy of middle class. So long as India is a democracy and we have politicians who try to win elections through freebies and entitlement schemes, we will have inflation. India is having min 8% inflation for almost all of last 3 decades (except during NDA rule), and FD rates don't go beyond 11-12% (for highly rated FD instruments) and taxation laws chip away lot of your interest earnings silently. I know people break this by investing in bits of 50000 Rs across many bank FDs but one day even this will be curbed by Govt.

    The above will not be the case if investor is over 60 years, in such situation, cut on investing in shares/career/own business and instead increase investing in FDs.

    Equally important is keep track of taxation laws while investing. Current taxation regime is heavily favoring investing in RE and Gold since effectively there is no enforcement of black deals. Things can change and if in future we have high vacant land tax or property tax as percent of market value, then we may need to rethink on our investment plans.
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  • Again when we talk about investing in RE, there are many categories of investing in RE namely:

    1. Investing in Suburban RE plots (vacant plots)
    2. Investing in Exurb RE plots (far away areas )
    3. Investing in newly built standard apartments in city/suburbs
    4. Investing in recently built/newly built Luxury apartments (hiranandani kind)
    5. Investing in old apartments in city (10+ years old) with possibility of redevelopment at some point of time.
    6. Investing in Commercial units (shops etc)
    7. Investing in exotic RE (hill stations etc) and
    8. Investing in farm land.

    A question to all friends - which of above would be the best in terms of ROI (Return on Investment)?

    To add - I would personally consider 1 and 5 as better than the rest.
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  • These are my thoughts:

    Stock: I don't have much experience with it, most of my investments have been all gut based or from hearsay with colleagues/friends etc which have not worked out well so far :)
    I plan to just stick with index mutual funds(I think its best signal tracking the economy as a whole)

    Gold: So far, I have invested only in Gold ETF(GLD) and never bought actual physical gold(as in ornaments/jewelry) as I believe they have depreciation right off the bat, based on making charges/model etc.

    RE: By far, anecdotally from friends and forum members - this seems to have the maximum appreciation. Only problem is its very expensive investment and illiquid.
    I think once I identify a plot to invest, I'll liquidate my investments and put it in RE. Although my concern is its little risky to not have much investments else where(having witnessed many people lose their home equity and life savings from their retirement account in the 2008 recession in US, I'm not confident the same wont affect India). But looking today, it seems to be the best option.
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  • Gold looks good now. I have started to get in.

    I do not look at RE as investment. I always want to consider them as personal use. I will not buy something where I would not live.

    I have never invested in plots. I do not invest in multiple properties at a time, even though I track hundreds of them. I hold only two properties for myself, one commerical and one residential. I have touched 9 figure amount by myself using RE bought in last 10 yrs.

    I do not like Chennai burbs too. Its hard to convince myself to get in.
    I am trying to get into NCR market however. My next big RE purchase would be when I completely pay off my place (bought in 2010) in early 2014. I might fast track it to 2013 if I find a good place.

    My personal goal is to hold double my RE assets in the next 5 years.
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  • Originally Posted by ramki830
    Again when we talk about investing in RE, there are many categories of investing in RE namely:

    1. Investing in Suburban RE plots (vacant plots)
    2. Investing in Exurb RE plots (far away areas )
    3. Investing in newly built standard apartments in city/suburbs
    4. Investing in recently built/newly built Luxury apartments (hiranandani kind)
    5. Investing in old apartments in city (10+ years old) with possibility of redevelopment at some point of time.
    6. Investing in Commercial units (shops etc)
    7. Investing in exotic RE (hill stations etc) and
    8. Investing in farm land.

    A question to all friends - which of above would be the best in terms of ROI (Return on Investment)?

    To add - I would personally consider 1 and 5 as better than the rest.

    My openion is vacant plot in suburb == Less headech also (If the papers are clear)
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  • Originally Posted by k11
    Gold looks good now. I have started to get in.

    I do not look at RE as investment. I always want to consider them as personal use. I will not buy something where I would not live.

    I have never invested in plots. I do not invest in multiple properties at a time, even though I track hundreds of them. I hold only two properties for myself, one commerical and one residential. I have touched 9 figure amount by myself using RE bought in last 10 yrs.

    I do not like Chennai burbs too. Its hard to convince myself to get in.
    I am trying to get into NCR market however. My next big RE purchase would be when I completely pay off my place (bought in 2010) in early 2014. I might fast track it to 2013 if I find a good place.

    My personal goal is to hold double my RE assets in the next 5 years.


    Awesome. 9 figure is very good.
    For investing in NCR, do you have contacts in Delhi to for eg, go and look at the place? Mainly trying to understand how feasible it is for someone (like me) who don't have any contacts in the north to invest there. I've heard (from forums) of few people who were able to invest without even seeing the property, signing the loan papers abroad etc (but assume they must have had a relative or a friend to visit the property at least and give an opinion and do legal check)
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  • No, I do not invest without seeing.
    I have some friends from S Delhi who work with me. One of them is eager to invest with me. I rely on brokers. I try to do site visits when possible. I did visit last year, will try to do end of this year too. I am focussing on Gurgaon only, I cannot afford Delhi and do not like Noida, Ghaziabad, Faridabad, Sonepat.

    Originally Posted by planner
    My openion is vacant plot in suburb == Less headech also (If the papers are clear)

    Plots in suburbs is not a good idea in this high interest rate and slow market environment. You cannot also leverage up using bank loans, banks will fund only 50-60% of guideline value which could be 30-40% of purchase price. No rental returns makes holding cost very high. Registration cost of 9% will make returns very bad in short term.
    Although for long term, cheap plots (under 1000/sqft) are fine, but only for cash investors.

    Banks are the reason why you can buy expensive places (resale apts). 20% downpayment is enough. Same thing with underconsturction properties, you can buy a 1C property for 25L. Outside of Chennai, 10% payment is more than sufficient.

    If the market goes up by 25%, your 1C property becomes 1.25C. 25L gain with just putting 25L from hand. 100% return on your downpayment.
    If the market is flat you lost the interest cost (opportunity cost) for 25L. Your bet is leveraged.

    On plots, you will have to buy plots only worth 22.5L + 2.5L for reg. Even if it appreciates by 40%, it goes to 31.5. You return is only a paltry 6.5L.

    Price appreciation in plots are not crazy too.

    Look at my thread.
    https://www.indianrealestateforum.com/forum/city-forums/chennai-real-estate/30965-investment-sholinganallur-vs-nallambakkam-vs-mahindra-world-city?t=32894
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  • I invest in RE, Mutual Funds and Gold. I am finding RE is the most profitable and my relatives have made killings in RE in Chennai in the past 10 years. I have been investing in Mutual Funds since 2004 and it has given me very meagre returns and i am not satisfied with that. Whereas during the same period (since 2004) if i had invested in RE, i would have made killings. Anyway no regrets about the past. That's why now i am focussing more on RE.

    I am not comfortable in investing in RE in other cities where i do not have contacts or relatives. That's why i recently avoided good opportunities in Bangalore and Trichy. I am comfortable investing in RE only in Chennai as i have my siblings and close relatives in Chennai to take care of any issues...
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