Announcement

Collapse
No announcement yet.

Should I invest in real estate in Mumbai : Need advice

Collapse
X
Collapse

Should I invest in real estate in Mumbai : Need advice

Last updated: August 14 2020
5 | Posts
233 | Views
  • Time
  • Show
Clear All
new posts

  • Should I invest in real estate in Mumbai : Need advice



    Hey guys, could you please help me out in making this decision.

    I need some advice about investing in real estate right now VS keeping the money in FD and investing in mutual funds whenever there is a correction.

    There is a new project coming up near our place in Mumbai (Jogeshwari-E). This is very close to both the highway and the railway station, also there is a new metro being built which might be ready by the time this building comes up. Buying this house will be totally for investing only.

    Booking rate is 20k right now. As per everyone I know, I should definitely invest here for some great returns. Well what really happens after 3-4 years when the building is ready is pure speculation and I would be taking a leap of faith and investing here if I do it.

    Some background on me: I work in a gulf country saving around 30L a year. Have close to 80 lakhs in FDs and my parents are using the interest of this money for their day to day living. I can easily take a loan to finance this new property.

    As for why am I not invested in the market? Well from whatever little reading I have done, it seems the markets correct quite a bit every 10 years or so and the current bull run has been going on for too long already so don’t want to take any chances.

    So basically I need an answer to this “investing in real estate right now VS keeping the money in FD and investing in mutual funds whenever there is a correction.”

    edit:

    so the full story is that this is not really a new project per se...its actually the building where my parents stay which is going for redevelopment. The rate is 20k for people who already stay here. it is 27K right now for outsiders/others for new bookings.

    So as you can see, the rate already is so high for others and I am getting a huge discount here.

    The metro is for sure coming up in the next 5 years.

    I do not want to invest the 80 lakhs I have in the market because of fear of losing it. It's my backup fund if things go bad.

    I read in the news that there are already so many unsold flats in Mumbai, this makes me doubt this investment.
    Last edited August 13 2020, 07:57 PM.
  • #2

    #2

    Re : Should I invest in real estate in Mumbai : Need advice

    If it's a redevelopment shouldn't your parents get a free flat, the sane size? Why are they making them pay for it at 20 K psf? Also it's going to take them at leat 3-4 years till the new building is built. So is the developer going to pay for the rent of your parents, when they live in an alternative accommodation, while they demolish and redevelop the existing building?

    Are they renters or owners in the existing building? I.e your parents?

    Lot of redevelopment projects are also stuck due to financing.

    So unless it's a reputed developer and either you or your parents are going to be an end user in this redevelopment project, no point in going for it, only as an investor.

    Comment


    • cjappu
      cjappu commented
      Editing a comment
      In my opinion DO NOT INVEST in under construction building at all. Lot of stress in the real sector right now may wipe lot of builders. Keeping money in FD in good safe bank is more sensible. Be on a lookout for very good deals in real estate. You would see ample deals in coming two years . And invest in ready to move ONLY.
  • #3

    #3

    Re : Should I invest in real estate in Mumbai : Need advice

    The rate of interest is between 6-7%.

    With inflation every year each penny you have is devalued by atleast 1-2% so basically, your funds are losing its value while you are using the return for day to day living. Another issue is the crappy banking systems which allows scams to happen so easily and only common people suffer. I would never recommend Fixed Deposits.

    My guess is the rental income you will make from these properties are about 2-3% of what you invest plus whatever property appreciation you get. As long as bollywood is in mumbai and if you notice all major company headquarters are in mumbai, it will not lose its charm and people will keep coming to this city. Which is why we have so many alternate methods of transport but still unable to meet the population. People are still buying super expensive properties and they are definitely not a vacation home. Rich will continue to live there forever.

    For the property, there are many new luxury(trending) projects between Borivali and Andheri where you can get in your price range. Find a reputed developer, verify their Rera profile on different projects and invest.



    Always invest in things that will get scarce with time, like space in mumbai.






    Comment

    • #4

      #4

      Re : Should I invest in real estate in Mumbai : Need advice

      In my opinion, in long term, you can bet on freehold real estate as an investment. However, for quick returns, now is a tricky time. For next 2-3 years, we may see an intense downcycle or we may even be in at the bottom and government avoids the downmove by policies like low interest rates. There's a fair chance of high devaluation of currency as well.

      You'll never get a "right" answer for questions like this. Just read about markets and go with your intution.

      Comment

      • #5

        #5

        Re : Should I invest in real estate in Mumbai : Need advice

        Originally posted by amancrapbox View Post
        In my opinion, in long term, you can bet on freehold real estate as an investment. However, for quick returns, now is a tricky time. For next 2-3 years, we may see an intense downcycle or we may even be in at the bottom and government avoids the downmove by policies like low interest rates. There's a fair chance of high devaluation of currency as well.

        You'll never get a "right" answer for questions like this. Just read about markets and go with your intution.
        I more or less tend to agree with the above analysis. The positive side is that quite a few properties are available/beginning to get available at bargain prices due to the current circumstances and many short term investors are looking to liquidate investments. So looking to invest in an RTM property ( if u have the funds ) of an investor looking to liquidate may be an good option to get some bargain deals.
        Please read IREF rules | FAQ's

        Comment

        Tags: None
        Have any questions or thoughts about this?
        Working...
        X