Considering that 25 lacs deposited in Corporate/Bank FD, Will become 40 lacs in 3 years, Is it advisable to invest 25 lac today in NOIDA EXTENSION FLATS????

If I dont invest in Noida Extension today and keep it in Bank FD for 3 years and after 3 years when most of the projects will be near completion, would the prices of a 25 lac flat(now) have escalated to more than 40 lac??? This is the question to answer.

SAy if I invest 25 lac in Noida Extension and after 3 years I get the Possession, but the flat cost has increased from 25 to 30 lac in 3years (considering supply is more than demand) theN I am at a loss sinve Bank/Corporate FD after 3 years will fetch 40 lac, and I can buy a flat in NE after 3 years. So I have earned an interest of 10 lac.

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  • well no offense but.
    if thinking of investing 25 lac in one go in noida extention better put ur money safe in FD will give better return.
    dont know what kind of model they r following in noida extention .
    but every week there is new launch in this area.
    some how have feeling that it will follow the fate of nehar par area in faridabad.money will be stuck for long time n also wont be liviable for even longer time.
    other thing the name is noida extention :: but it is actually greater noida.
    this area is far of from heart of both the city.
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  • what is the interest rate and compounding frequency that you are assuming for your calculation. i did some calculation for 8% interest rate and and half yearly compounding and it came to 31.63 lacs.
    Originally Posted by Kaashvi
    Considering that 25 lacs deposited in Corporate/Bank FD, Will become 40 lacs in 3 years, Is it advisable to invest 25 lac today in NOIDA EXTENSION FLATS????

    If I dont invest in Noida Extension today and keep it in Bank FD for 3 years and after 3 years when most of the projects will be near completion, would the prices of a 25 lac flat(now) have escalated to more than 40 lac??? This is the question to answer.

    SAy if I invest 25 lac in Noida Extension and after 3 years I get the Possession, but the flat cost has increased from 25 to 30 lac in 3years (considering supply is more than demand) theN I am at a loss sinve Bank/Corporate FD after 3 years will fetch 40 lac, and I can buy a flat in NE after 3 years. So I have earned an interest of 10 lac.

    Views invited as this seems to be a debatable topic
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  • Dear Alok,

    I was considering the Corporate FD's which offer upto 13-14% interest compounded quarterly. The flat I am looking for is for Rs 27 Lac, and investing this amount inCorporate FD's at 13% for 3and a half years will yield aroud 40 lacs.

    So considering the supply in NE, IT is ver interesting to debate whether 27 lac property/flat will reach more than 40 lac in 3and half years or so???
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  • Another Advantage of Investing after 3years can be that you get to know and look at the costruction quality and also development of area, before investing
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  • Noida or Gurgaon rather than NE or Gnida

    Is NE a compulsion?

    Investing in Noida or Gurgaon will most likely fetch you minimum 10% compounded return and beat inflation for a 3-year period.

    NE/Gnida requires atleast 5-7 year wait. If u increase you holding term from 3 to 7 yrs NE/Gnida makes sense.

    But i would go for Noida sec 75,76,77, 78, 110,121, 137, 168, 143.......so many options, or Gurgaon golf course extn, dwarka-manesar eway.
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  • Corporate FD at 14-15% are as likely to default as a NOIDA ext. builder.

    As Alok points out, FD for 3 years wont get you that much at 8%.

    If you have 25L in cash, you are not the targetted group for NE at all. It is for people looking for affordable housing.

    NE is not the place for RE investment, there are much better options.

    Now if you have 75L in cash, put 25L in RE, 25L in FD and 25L in stocks.

    If you have only 25L, it would be folly to put it all in a flat - unless you plan to live in it - in which case, your own situation will dictate the location.
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  • i agree, there is a reason that company is paying so much interest, as it can not find money at lower interest from big banks. any decent private or public bank will not pay you more then 8-9 % per annum. at 9% and quarterly compounding ,you will get 32.65 lacs. so this is the upper limit that you will get in a safe investment like fd. investing in 14-15 % corporate fd is not safe and you should not confuse them with bank fds who are very less likely to default.
    Originally Posted by Venkytalks
    Corporate FD at 14-15% are as likely to default as a NOIDA ext. builder.

    As Alok points out, FD for 3 years wont get you that much at 8%.

    If you have 25L in cash, you are not the targetted group for NE at all. It is for people looking for affordable housing.

    NE is not the place for RE investment, there are much better options.

    Now if you have 75L in cash, put 25L in RE, 25L in FD and 25L in stocks.

    If you have only 25L, it would be folly to put it all in a flat - unless you plan to live in it - in which case, your own situation will dictate the location.
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  • And If I am buying a flat for end use, is it advisable to put in the money now or wait for 3 years???

    What is the approximate per year that NE flat will give if I invest 25 lac now??? Any guesses??? or Estimates???
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  • I don't think anyone can predict what will be the prices at the end of 3 years. your decision is based on what kind of risk you are more comfortable with.


      lets say you invest in your money in a flat right now. your risks are

        you don't know what quality will be delivered after 3 years.
        project can be delayed and your money will be stuck.
        builder can runaway with your money

        if you invest in a fd, your risk is , prices can appreciate much more in next 3 years then what would you get in a fd. so you will not be able to buy anything.

        it is up to you, which kind of risk you are comfortable with.

        Originally Posted by Kaashvi
        And If I am buying a flat for end use, is it advisable to put in the money now or wait for 3 years???

        What is the approximate per year that NE flat will give if I invest 25 lac now??? Any guesses??? or Estimates???
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  • Thanks Alok for the analysis. Yes it all depends on what kind of risks a person can take, so that he doesnt have to repent later on. So I will like you to comment, based on your experience of realty in NE, What is more likely to happen???- Scenario 1 or scenario 2.

    So what is advisable??
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  • that's the thing. I really don't know what will happen after 3 years in noida extension. but good livable project which will be delivered in 3 years will definitely appreciate more then 15% per year by the time of possession. so you will not be able to buy in them with same amount of money that you have now. don't believe the hype that inventory is too high. some of it will not be delivered and a lot will be delayed.

    again it comes to risk management. will you like to take risk now and get cheaper home. or will you like to pay more money after seeing finished product.
    Originally Posted by Kaashvi
    Thanks Alok for the analysis. Yes it all depends on what kind of risks a person can take, so that he doesnt have to repent later on. So I will like you to comment, based on your experience of realty in NE, What is more likely to happen???- Scenario 1 or scenario 2.

    So what is advisable??
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  • Originally Posted by alokgarg
    that's the thing. I really don't know what will happen after 3 years in noida extension. but good livable project which will be delivered in 3 years will definitely appreciate more then 15% per year by the time of possession. so you will not be able to buy in them with same amount of money that you have now. don't believe the hype that inventory is too high. some of it will not be delivered and a lot will be delayed.

    again it comes to risk management. will you like to take risk now and get cheaper home. or will you like to pay more money after seeing finished product.



    The interest cost of investment is about 20% of cost.

    Another 10-15% could be for risk factor.

    With the huge supplies, 15% annual appreciation in unlikely in NE (Crossings is a living example).

    After 3-4 years one can get a flat at today's cost+30-40%. However, preferred location may not be available.

    More or less the same will be story in sectors 75-78.
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  • Originally Posted by Basant
    The interest cost of investment is about 20% of cost.

    Another 10-15% could be for risk factor.

    With the huge supplies, 15% annual appreciation in unlikely in NE (Crossings is a living example).

    After 3-4 years one can get a flat at today's cost+30-40%. However, preferred location may not be available.

    More or less the same will be story in sectors 75-78.


    Hi Basant,
    We are all predicting the same way.

    But we never predicted that share market going beyond 19K, we never predicted g.old to reach 20K. we never predicted wholesale prices of essential goods to increase 200% in last 5 yrs:)
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  • Originally Posted by Munish Malhautra
    Hi Basant,
    We are all predicting the same way.

    But we never predicted that share market going beyond 19K, we never predicted g.old to reach 20K. we never predicted wholesale prices of essential goods to increase 200% in last 5 yrs:)



    Munish bhai - You are not in form today ....not at all......time for some net practice.

    :-)

    Regards
    Sbajaj
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  • Hi kaavish
    if you book a flat with good builder in ne by paying 10%+10% in clp for a flat of rs. 25 lac balance 20 lac put in p.o. You will get around 13000 p.m. From this money you can your int. Or emi for long as you want and have both the benefit.
    Regards
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