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Which Stage of construction is best for RE investment?

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Which Stage of construction is best for RE investment?

Last updated: March 9 2012
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  • Which Stage of construction is best for RE investment?

    I am still new to RE investment.

    These are few stages of construction during which people generally purchase for investment purpose:

    1) Pre-launch : People buy during prelaunch, and pay upto 20-30%, stay in the project for an year or so and then sell it.

    2) Original booking (after Launch) : This is original booking in the 1st phase of a project. Again people pay upto 20-30%, stay in the project for an year or so and then sell it.

    3) Buy in resale : Buy it during very early stages of construction, by paying nearly 30% upfront to the seller. Keep it for a while and after some appreciation sell it.

    4) Buy in resale (nearing possession) : This could be another investment, buying a property nearing possession, may be possession due in 6 months to 1 year. Keep it till possession and then sell it to end-users who want ready to move in property.

    Also, investment is based on other factors like amenities, area development etc..so pls take into account these factors too.

    Questions -
    ========
    1) Which out of the above four stages is the best to invest in RE? Purely from ROI perspective.

    2) Considering the above stages/factors, can you please sort below in terms of better investments -
    Ireo Skyon (buy in resale),
    Ireo Uptown (resale),
    Emerald floors (resale),
    Vatika Seven Lamps (resale),
    Crescent Park (resale),
    Bestech Grand Spa (Original booking),
    DLF Regal Gardens (pre-launch)

    NOTE : above properties may not be comparable in terms of initial investment, so the question is purely from ROI perspective.
    Last edited March 9 2012, 11:15 AM.
  • #2

    #2

    Re : Which Stage of construction is best for RE investment?

    Investing in which stage of construction viz. ROI could depend on numerous factors -


    - Your financial capability or simply how much many u have to invest & what is your inflow & outflow of money . Please note that total landed cost of the Purchase needs to be considered .

    - Your plan or your holding horizon .

    - The Builder & his capabilities, repute .

    - Wanting to make original booking or resale is good enough ?

    - How much risk r u willing to take ? .....on the Builder, area u r looking to invest in .

    - on specifications of the project, ratio ie carpet to super area, density, gentry, layout plan, ratio of carpet to super area .




    .................& many more .............



    What may be good for "A", may not be decent for "B", because of different situations, "A" & "B" r in . Ideally, one needs to formulate his / her own ideal & workable set of parameters .


    My POV, please correct me, if i am wrong somewhere .

    Please read IREF rules | FAQ's

    Comment

    • #3

      #3

      Re : Which Stage of construction is best for RE investment?

      Originally posted by MANOJa View Post
      Investing in which stage of construction viz. ROI could depend on numerous factors -


      - Your financial capability or simply how much many u have to invest & what is your inflow & outflow of money . Please note that total landed cost of the Purchase needs to be considered .

      - Your plan or your holding horizon .

      - The Builder & his capabilities, repute .

      - Wanting to make original booking or resale is good enough ?

      - How much risk r u willing to take ? .....on the Builder, area u r looking to invest in .

      - on specifications of the project, ratio ie carpet to super area, density, gentry, layout plan, ratio of carpet to super area .




      .................& many more .............



      What may be good for "A", may not be decent for "B", because of different situations, "A" & "B" r in . Ideally, one needs to formulate his / her own ideal & workable set of parameters .


      My POV, please correct me, if i am wrong somewhere .


      Your are right Sir!
      But let me give you an example to be more specific about the question -
      Lets say I have got 70L (90% White") upfront. Here are the choices I have:
      - I can invest on a middle-of-construction property on GCX road e.g. uptown, 1st phase of Emerald floors
      - Can invest in 2nd/3rd phase of properties on GCX road in early stages of construction e.g. 3rd phase of Emaar - Emerald Premier floors
      - Can invest in multiple properties in New GGN (Sec 80x - 90x), e.g. Vatika in original booking
      - Can invest in multiple properties in New GGN (Sec 80x - 90x), e.g. Vatika in resale

      So, which choice would be better?

      Comment

      • #4

        #4

        Re : Which Stage of construction is best for RE investment?

        Originally posted by deepika001 View Post
        Your are right Sir!
        But let me give you an example to be more specific about the question -
        Lets say I have got 70L (90% White") upfront. Here are the choices I have:
        - I can invest on a middle-of-construction property on GCX road e.g. uptown, 1st phase of Emerald floors
        - Can invest in 2nd/3rd phase of properties on GCX road in early stages of construction e.g. 3rd phase of Emaar - Emerald Premier floors
        - Can invest in multiple properties in New GGN (Sec 80x - 90x), e.g. Vatika in original booking
        - Can invest in multiple properties in New GGN (Sec 80x - 90x), e.g. Vatika in resale

        So, which choice would be better?
        If you want it for end-use and you don't have other protection towards realty inflation, go for resale where there is less uncertainity.

        If it's for investment and you already have a house to stay and take care of price appreciation in realty, then you make take a risk for pre-launch. Because in pre-launch, things are a bit uncertain - whether builder will get the approval, whether you'll get flat of your choice, prices are not tested in the market etc. etc. And so is with better return compared to resale property.

        Comment

        • #5

          #5

          Re : Which Stage of construction is best for RE investment?

          Incidently I had a similar argument with one of my friends ystrdy regarding the same.
          Can some one please throw some more light on to issues like giving in a booking amount of 10-15 lakhs at pre launch and then selling of the property soon after 6/12 months...and getting huge returns (as per my friend!)...in short play a gamble of 10-15 lakhs and get returns of about 10 lakhs after a good enuf appreciation soon.
          DOES it really happen??? i have never thought like this so am still naive at these kinds of gamble.
          Can some one enlighten us a bit more considering the transfer of recently launched projects(no registry) and then the transfer charges that you have to pay etc etc...how much sense does all this make???

          Comment

          • #6

            #6

            Re : Which Stage of construction is best for RE investment?

            First let me add, what i forgot to write before .

            Biggest of analytical minds & Gurus sometime fail in their investments . "LADY LUCK" & "PATIENCE" r two of the biggest requirements to be successful in RE . "LADY LUCK" is not in our hands, but "PATIENCE" is . "PATIENCE" is one of the biggest virtues in RE .


            Now, coming back to your post, my comments r as under -

            If u start shortlisting & striking out properties, based on my original comment, u would arrive close to an answer .

            Since, your question seems to be hypothetical & without going into the merits & demerits of the Builders named by u & presuming that all Builders/locations u r talking about r equally good or bad, i would say investing in prelaunch or investing in multiple Projects in early stages of construction will spread the risk & negate to an extent, some of the uncertainties of RE .



            Above may not be in line with the thoughts of many & as i said before, what may be good for "A", may not be decent for "B", because of different situations, "A" & "B" r in . Ideally, one needs to formulate his / her own ideal & workable set of parameters .





            Originally posted by MANOJa View Post
            Investing in which stage of construction viz. ROI could depend on numerous factors -


            - Your financial capability or simply how much many u have to invest & what is your inflow & outflow of money . Please note that total landed cost of the Purchase needs to be considered .

            - Your plan or your holding horizon .

            - The Builder & his capabilities, repute .

            - Wanting to make original booking or resale is good enough ?

            - How much risk r u willing to take ? .....on the Builder, area u r looking to invest in .

            - on specifications of the project, ratio ie carpet to super area, density, gentry, layout plan, ratio of carpet to super area .




            .................& many more .............



            What may be good for "A", may not be decent for "B", because of different situations, "A" & "B" r in . Ideally, one needs to formulate his / her own ideal & workable set of parameters .


            My POV, please correct me, if i am wrong somewhere .

            Originally posted by deepika001 View Post
            Your are right Sir!
            But let me give you an example to be more specific about the question -
            Lets say I have got 70L (90% White") upfront. Here are the choices I have:
            - I can invest on a middle-of-construction property on GCX road e.g. uptown, 1st phase of Emerald floors
            - Can invest in 2nd/3rd phase of properties on GCX road in early stages of construction e.g. 3rd phase of Emaar - Emerald Premier floors
            - Can invest in multiple properties in New GGN (Sec 80x - 90x), e.g. Vatika in original booking
            - Can invest in multiple properties in New GGN (Sec 80x - 90x), e.g. Vatika in resale

            So, which choice would be better?
            Please read IREF rules | FAQ's

            Comment

            • #7

              #7

              Re : Which Stage of construction is best for RE investment?

              These tricks have given phenomenal return in NCR in last 6-8 years.
              Reason : High Deman and low supply.

              Last big game of musical chairs was started years back with more than 75 projects getting launched in same timeframe.

              Now with more than 100 projects under construction and as many due for launch in next 2 years, this game wont give the kind of return as shared below.
              Reason :- High Demand and Higher Supply . This will make exit difficult. Imagine what will happen if every one starts buying with this strategy. Over supply and panic sales as most would not be able afford the entire cost.

              So the best bet would be to buy at good location, near the habitats and buy the projects where there is n doubt that the project will be delivered on time.

              All the best,


              Originally posted by maxcapri View Post
              Incidently I had a similar argument with one of my friends ystrdy regarding the same.
              Can some one please throw some more light on to issues like giving in a booking amount of 10-15 lakhs at pre launch and then selling of the property soon after 6/12 months...and getting huge returns (as per my friend!)...in short play a gamble of 10-15 lakhs and get returns of about 10 lakhs after a good enuf appreciation soon.
              DOES it really happen??? i have never thought like this so am still naive at these kinds of gamble.
              Can some one enlighten us a bit more considering the transfer of recently launched projects(no registry) and then the transfer charges that you have to pay etc etc...how much sense does all this make???

              Comment

              • #8

                #8

                Re : Which Stage of construction is best for RE investment?

                My top Choice - Ireo Skyon.

                To know why I said this please check the below post :-

                https://www.indianrealestateforum.co...urgaon?t=27857

                Originally posted by deepika001 View Post
                I am still new to RE investment.

                These are few stages of construction during which people generally purchase for investment purpose:

                1) Pre-launch : People buy during prelaunch, and pay upto 20-30%, stay in the project for an year or so and then sell it.

                2) Original booking (after Launch) : This is original booking in the 1st phase of a project. Again people pay upto 20-30%, stay in the project for an year or so and then sell it.

                3) Buy in resale : Buy it during very early stages of construction, by paying nearly 30% upfront to the seller. Keep it for a while and after some appreciation sell it.

                4) Buy in resale (nearing possession) : This could be another investment, buying a property nearing possession, may be possession due in 6 months to 1 year. Keep it till possession and then sell it to end-users who want ready to move in property.

                Also, investment is based on other factors like amenities, area development etc..so pls take into account these factors too.

                Questions -
                ========
                1) Which out of the above four stages is the best to invest in RE? Purely from ROI perspective.

                2) Considering the above stages/factors, can you please sort below in terms of better investments -
                Ireo Skyon (buy in resale),
                Ireo Uptown (resale),
                Emerald floors (resale),
                Vatika Seven Lamps (resale),
                Crescent Park (resale),
                Bestech Grand Spa (Original booking),
                DLF Regal Gardens (pre-launch)

                NOTE : above properties may not be comparable in terms of initial investment, so the question is purely from ROI perspective.

                Comment

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