Hi,
I wish to invest some money spread over 2 years or so. I wish to ask where best to invest the same?

Some mute points are
1. I already have some investments in Gurgaon.
2. Bank loans will not be needed.
3. My horizon is relatively short i.e. around 3 years from date of starting the investments.

My key concern is considering the prevalent RE prices and my time horizon, is it safe to invest in RE or should I let money idle in a Fixed Deposit? if yes, where to invest i.e. Gurgaon, 8X sectors, Fbd, Kundli, Noida etc? I am not looking at name of any project but a broad area to invest.

Any advice / recommendation will be highly appreciated.
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  • Investments

    Hi
    Greetings!!

    think of parking near time cash requirement for 2 years in Good rate bank FDs. Best return muthoot depending on how much you want to invest. ROI 13.5% assured Risk nil
    Some investment for 2 years in ready for possession plot as well flat in Fbd. expected ROI 20-30%p.a, Risk Nil+ rental income in case of flat
    Long term investment over 5 years in Fresh launches in GGN. All internally funded. ROI 10-50%, Risk High, No regular rental income.. May need to lock investment for upto 10 years
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  • I agree with blessu.

    Need 4-5 year time horizon to enter now. Which means you may not be able to sell booking at good profit and may have to pay full amount - maybe even pay registry if the market is dull at the delivery time.

    FD will give 35% return in 3 years. Difficult to beat that - at least it is not rational to expect more than 40% upside from here.

    We had a poll on this recently
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  • Originally Posted by Venkytalks
    I agree with blessu.

    Need 4-5 year time horizon to enter now. Which means you may not be able to sell booking at good profit and may have to pay full amount - maybe even pay registry if the market is dull at the delivery time.

    FD will give 35% return in 3 years. Difficult to beat that - at least it is not rational to expect more than 40% upside from here.

    We had a poll on this recently



    Agreed considering NE issue, builders having problems with funds, hardening of home loans making buyers more cautious.

    Its better to hold for some time and then take a call, however if one is really keen on investment better options could be rohtak, dharuhera, bhiwadi, neemrana where base price is less and appreciation can be expected
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  • i am interested for i bhk in gurgaon
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  • is faridabad is best for investment now
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  • Venky what you mean by 40% upside is it 40% upside on the current prices...because if you mean 40% rise in current prices in 3-4 years...the actual ROE will be 80% in 4 years

    so a if FD will give you ~ 40% in 4 years and the prices rise only 40% from here in 4 years (very conservative assumption), still the ROE on undercionstucted propertied will be 80%.. THis is the beauty of the underconstructed properties


    Originally Posted by Venkytalks
    I agree with blessu.

    Need 4-5 year time horizon to enter now. Which means you may not be able to sell booking at good profit and may have to pay full amount - maybe even pay registry if the market is dull at the delivery time.

    FD will give 35% return in 3 years. Difficult to beat that - at least it is not rational to expect more than 40% upside from here.

    We had a poll on this recently
    Attachments:
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  • Ravika, i light of the facts mentioned in your pose, you can invest in the society flats in sector 56/57. There are many societies where you cannot get loan because the registration is not open yet and this leads to reducion of sale price in those societies. Buy a good negotiated deal in this kind of society and look for a buyer for three years your targetted price. Till you get a potential buyer, you can get good rental income from this purchase. Two birds, one in hand one in bush. This is almost no risk deals as you get possession immediately and because you are buying less than the market already, even if there is some correction in market, you should be safe.
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  • PE Investment

    I am also compring this with some PE investment where we getr returns to the tune of 20%-22% PA any views on that ?
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  • Amit, 40% return after 3 years in an under-construction flat is surely doable (not 40% per annum but some 10-15% per annum in irregular jumps)

    And I agree with your calculation, there is around 20-21% return on capital deployed since payments are staggered with a CLP. 21-10=11% more return than FD if things go as expected is not unreasonable with RE.

    But with loan, it is less attractive = 21-12 = 9% more return over this period than FD. Still substantial.

    Of course, this 8-10% per annum is your risk premium - you may not get this much if there is a downturn.

    Definitely better than stocks in the current juncture.

    Aashugan, I recently evaluated Birla and ICICI private equity. Birla is into venture capital and has a listing exit plan. With high rates, small businesses are unlikely to outperform or list well. ICICI direct does project finance for residential RE - again it is yesterday's theme, the risk of default is too high in current scenario.

    I opted out of both.
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  • Was talking to a Big Shot today who arranges FSI.
    according to him the new FSIs are hard to come by below 1500. with the cost of const touching 1200-1300 and 10% " clearance fee" the cost to builder is now touching 3000. after adding marketing / brokerage the cost comes to 32-3300. So to expect new launches below 3700-3800 for new FSI is highly improbable.
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  • I agree, 3000 is bargain basement now.

    One should go for resale purchase.

    And many NOIDA projects sold at low prices will be abandoned because of the cost price inflation
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  • two in hand none in bush

    Originally Posted by amty_gr
    Ravika, i light of the facts mentioned in your pose, you can invest in the society flats in sector 56/57. There are many societies where you cannot get loan because the registration is not open yet and this leads to reducion of sale price in those societies. Buy a good negotiated deal in this kind of society and look for a buyer for three years your targetted price. Till you get a potential buyer, you can get good rental income from this purchase. Two birds, one in hand one in bush. This is almost no risk deals as you get possession immediately and because you are buying less than the market already, even if there is some correction in market, you should be safe.



    Unless you are sentimentally attached to Gurgaon, for the same budget you would comfortably get 2, 3bhk flats in FBD. Thus two in hand none in bush+ rentals. Best Part you will get new construction whereas the flats in 56/57 are about 10 years old now or more (most of them). Also you cannot get the society flats registered in your name straight away. I think the are through power of attorney which is challengeable..Also no problem with bank loan...
    Also with two flats you always have a chance to book profits and preserve the second one:)
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  • Bless you -honestly it is crazy to even compare Ggn with FBD....

    The kind of commericial/office development is there in GGn..can never happen in faridabad till you and me are alive...


    Faridabad may be a good area to invest, but it doe snot even come close to GGn..

    My POV you may disagree
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  • IRR Formula

    Originally Posted by amit001
    Venky what you mean by 40% upside is it 40% upside on the current prices...because if you mean 40% rise in current prices in 3-4 years...the actual ROE will be 80% in 4 years

    so a if FD will give you ~ 40% in 4 years and the prices rise only 40% from here in 4 years (very conservative assumption), still the ROE on undercionstucted propertied will be 80%.. THis is the beauty of the underconstructed properties


    Hi
    Greetings!!
    Amit001 may I kindly request you to attach the formula of IRR in case of CLU plans on the link please. This would help everybody to check the IRR at a given price point and for a given CLP
    https://spreadsheets.google.com/ccc?key=0Ahk_8tfSUql8dDloWnl4bXFvSjJ6TTB0Uk8taFp2bXc&hl=en&authkey=CKjfg6cD#gid=1
    Obviously anybody can look and edit any information pertaining to offers available/ launched on dway
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  • Ravika,

    For your investment we need to know the amount you can spend? There are definitely some good places that can give you good returns in 3 years time, but it all depends on the money that you are ready to spend.

    For anything in the range of Rs 20-25 Lakhs I agree with AryanKB said to look towards Bhiwadi. Infra and industry is already in place and connectivity with NH-8 and Gurgaon will improve further within next 1 year.
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