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Futility of a 2nd House when not for END USE..

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Futility of a 2nd House when not for END USE..

Last updated: June 3 2017
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  • Futility of a 2nd House when not for END USE..

    Dear everyone , I live in South Delhi and have been searching for a 2nd house ( plot / villa / apartment ) ever since my home loan got over 3 months back . I have searched and analysed Noida Expressway , YEW , GN , NE and would like to share my conclusions and analysis with you

    Conclusion No 1 . With so many stalled projects that are behind schedule / unlikely to get delivered / delivered with a pathetic construction quality/ those that have been delivered but are struggling to get COMPLETION CERTIFICATE .............it does not make sense to invest in UC Property IRRESPECTIVE of the builder and RERA

    Conclusion No 2. The prices have shown a correction over the last 4 years , Forget about the price hike there has been a correction of anything between 5 to 20%...........with so many more apartments that are to be delivered in the near future and many more to be launched........these regions are highly highly unlikely to give any positive returns on INVESTMENT

    Conclusion No 3. I was inclined to buy a house and shift at A SUITABLE TIME after leaving the current house like some of my friends have done...........however what i realised and saw was that their flats quality had deteriorated over time AND the same flat"s price (at which they had bought) had gone down further.

    Conclusion No 4. The rentals that these houses and apartments fetch are INSIGNIFICANT ( For example the HIG Independent houses with a Price tag of 1.4 Cr behind ATS Corporate office is available at 12 k for rent ) so the old theory of purchasing a flat and funding a portion of EMI through that rent does not come into the picture.

    Conclusion No 5 . Builders in their greed have launched projects at sites that have NOTHING at present . Usually when a new area is taken up for development , there is a locality / neighbourhood within a few kms that has everything ( hospitals / markets / malls / schools / jobs / employment/ Public transport ) and people are willing to travel 3 to 4 kms to save money of buying an expensive house...............this is exactly the reason why NE came up well and got occupied immediately .............BUT as far as Noida Ex Way is concerned ..............I dont see any sense in going beyond sec 143..................People will say that travelling on these expressways is easy and fast but there is practically nothing beyond sec 143 at present till you reach GN / Pari chowk. All these areas in sec 150 / 152 / YEW have been developed in ANTICIPATION of development that is ABSENT PRESENTLY in the more Proximal sectors ( Sec 143 for 150 ..........sec 150 for YEW)................Brokers and Builders have made a lot of promises regarding the development of these areas over the last 10 years BUT the reality is in front of everyone

    After 3 months of hard work and a lot of visits to these regions I dropped my decision to INVEST in a 2nd HOUSE...........My advice to all my dear friends would be to analyse the same and buy (1) ONLY a RTM Property and that too (2) ONLY When you plan to shift (3) Definitely NOT for INVESTMENT.

    Regards
    Last edited June 1 2017, 12:10 PM.
  • #2

    #2

    Re : Futility of a 2nd House when not for END USE..

    Honestly, all this has been concluded enough no. of times over several other threads. Please note that there are several dealers & hurt investors on this thread who wouldn't agree with this. If anyone wants to invest in Noida in a residential property then it better be land (with a vision of long term parking of the investment).

    An example is, land in sector 93 B, which is going to have excellent returns but the window to take would have to be 10-15 years at the least.
    Buy Land, they're not making it any more.

    Comment

    • #3

      #3

      Re : Futility of a 2nd House when not for END USE..

      Dear Fireheart , you are probably right that these things have been discussed in other threads that deal with individual projects ...........but there is not a SINGLE THREAD that I am aware of that deals ONLY with the usefulness or futility of a SECOND house and presents the observations and inferences like I have tried to portray.
      You are very knowledgeable and experienced as far as Real Estate is concerned and Probably therefore know all the things that I have mentioned , BUT spare a thought for those who are newbies as far as PROPERTY is concerned , have just started reading IREF , have just started dreaming about their OWN house , have not read the posts that you have read...........this thread is for them
      Last edited June 1 2017, 02:15 PM.

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      • #4

        #4

        Re : Futility of a 2nd House when not for END USE..

        In that case few of your conclusions have to be taken with a pinch of salt. With a 1.2 Cr investment in an apartment the return is somewhere around 2.5% (25-28k rent) in sector 93. Sector 135 duplexes are not in demand when it comes to rental, hence the low prices. A 2.5% return is considered ok from an apartment by many.

        Investment in a second house would differ a whole lot on a case to case basis. Some want a steady rental income with a 5-10% guaranteed rental increase and they may decide to park their money in a second house while others may invest in a mutual fund and get a non-guaranteed income which is much higher than the rental earning.
        Buy Land, they're not making it any more.

        Comment

        • #5

          #5

          Re : Futility of a 2nd House when not for END USE..

          Not to mention, the definition of returns from an investment also differs for people. While the universal definition of getting "some money" by giving "a large amount of money" is mostly accepted there is a whole lot of folks who don't think in these terms. There is a reason why the mutual fund market is 80% untapped while every tom, dick & harry is sailing on the RE boat somehow or the other.
          Buy Land, they're not making it any more.

          Comment

          • #6

            #6

            Re : Futility of a 2nd House when not for END USE..

            It is good that you have brought up the discussion of sec 93 and the rent fetched by the apartments in THIS sector .........this pretty much means that even if the above conclusions are scrutinized by experts the ONLY CONCLUSION that can be debated upon is the one that deals with the rental part , rest 4 are pretty much OBVIOUS and UNDISPUTED.
            Even if what you are saying is correct that would mean an average rental for the huge investment that too only for this sector........ ..........soon the tenants who live in this sector will realize their available options and decide to prefer new societies in sec 137 at half the rentals...........look what has happened with Crossing republik...........the rental rates have not stagnated but fallen. With new societies / new flats waiting for tenants and eager to embrace them soon in these new sectors........we will soon see a decline in rentals / forget about rentals ............they might even struggle to find tenants.
            Every Person has a dream of owning his house..............sooner rather than later............... these tenants will decide to buy a property and if it is not RTM (and start paying EMIs) their obvious preference will be to shift into a house with lower rentals to accommodate the burden of their EMIs and with so many flats and even duplex villas available in 10 to 12 k they wont be short of choices

            Comment

            • #7

              #7

              Re : Futility of a 2nd House when not for END USE..

              Originally posted by pkdch0101 View Post
              It is good that you have brought up the discussion of sec 93 and the rent fetched by the apartments in THIS sector .........this pretty much means that even if the above conclusions are scrutinized by experts the ONLY CONCLUSION that can be debated upon is the one that deals with the rental part , rest 4 are pretty much OBVIOUS and UNDISPUTED.
              Even if what you are saying is correct that would mean an average rental for the huge investment that too only for this sector........ ..........soon the tenants who live in this sector will realize their available options and decide to prefer new societies in sec 137 at half the rentals...........look what has happened with Crossing republik...........the rental rates have not stagnated but fallen. With new societies / new flats waiting for tenants and eager to embrace them soon in these new sectors........we will soon see a decline in rentals / forget about rentals ............they might even struggle to find tenants.
              Every Person has a dream of owning his house..............sooner rather than later............... these tenants will decide to buy a property and if it is not RTM (and start paying EMIs) their obvious preference will be to shift into a house with lower rentals to accommodate the burden of their EMIs and with so many flats and even duplex villas available in 10 to 12 k they wont be short of choices

              All this is a phase only:-

              Phase of bearish term

              Phase of excess supply

              Phase of sluggish Growth


              This Phase will settle down definitely.

              Fundamentals of real estate will not change.........

              when the prices were rising in 2008 to 2014 topic of discussion was something opposite...every thread contains 1000 of queries in IREF where/why to invest or not



              IMO: Any decision/Strategy must be after considering this fact, (technically or fundamentally)

              Definition of smart changes with time when we postmortem


              2005 :Smart: Who bought Equity three year before (2002) and hold or sold in at 3 to 5 time valuation from then (rest all were regrating)

              2007 : Smart : who bought Gold in 5000/10gms two year before (2005) and hold or sold in 18000/10gms (rest all were regrating)

              2011: Smart: who bought Kothi or Flat three year before (2008) and hold or sold in at 3 to 5 time valuation from then (rest all were regrating)

              2017 : Smart: Who bought Equity three year before (2014 Modi PM) and hold or sold in at 3 to 5 time valuation from then (rest all were regrating) (interestingly Real estate Company DLF/Godrej Propery has given 100% return in last six month since note-bandee)



              Question: who will be the next in this list in 2019 >2022 >2024
              Last edited June 1 2017, 05:25 PM.

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              • pkdch0101
                pkdch0101 commented
                Editing a comment
                Very well said..........expected from a veteran, BUT this time around this Bearish Phase in Real Estate will stay for a longer time than it has in the past simply because of the VISIBLE MASSIVE PILE UP of Inventories available for sale and many more to come......until these are consumed by END USERS .........this phase will continue.
            • #8

              #8

              Re : Futility of a 2nd House when not for END USE..

              Originally posted by pkdch0101 View Post
              soon the tenants who live in this sector will realize their available options and decide to prefer new societies in sec 137 at half the rentals
              Sector 93 is an exception and will remain an exception in times to come. I know a tenant who's paying 37k for an apartment that's currently being rented at 25-28k. Ajnara Daffodil offers that size in 15k today, negotiable even at this price.

              ATS, Eldeco & Purvanchal are PREMIUM societies and even CXOs are renting apartments here. One of the PayTM bigshots bought an apartment very recently and gave a 15 lakh premium to the current market rate because he liked the society as well as the flat so much. Then there is a Star Sports channel bigshot who bought an apartment last year. I don't follow sports so forgetting his name but he's quite a popular guy, both on TV and in the society.

              The only change that will happen in these societies is that after maybe 5-7 years there may be 85-90% owners only.

              However, rentals have hit rock bottom in 7x sectors as well as 137 simply because you can rent an apartment at just about any price today. Some folks have rented it so that at least they can pay the maintenance out from it. One of my friends has rented his 3 BHK (1450 size) in Sethi Max Royal for 12k, he had started looking for tenants willing to pay 18k in April 2016. Net take away is somewhere around 8k only after maintenance deduction, flat bought for 74 lakhs all inclusive in March 2016.
              Buy Land, they're not making it any more.

              Comment


              • pkdch0101
                pkdch0101 commented
                Editing a comment
                Your comparison is as illogical as your laughter............you think comparing sector 93 with what 137/143/150 will be in 5 years is like comparing defence colony and Jor bagh with Kotla..Give me a break , you think people are fools who are buying ATS properties in sec 150 even when there is nothing around * 1 to 1.5 Cr .............and the distance is < 20kms between sector 93 and 150 , this is not Delhi V/s Meerut. Please do your homework and read about ATS Pristine on this forum only before posting again.........just posting hahahaha will not be enough .............I PRAY FOR Your speedy recovery and i curse myself for replying to your statements obviously incorrectly assuming that i was in the middle of a meaningful constructive arguement.
                Last edited June 2 2017, 02:59 PM.

              • fireheart
                fireheart commented
                Editing a comment
                laughter is illogical...hahahaha.....please go invest in sector 137, 143 and 150 aur ATS ke project mein toh 2 ghar khareed lo....why do you want to be a fool like me when you know that in 5 years the most intellectual & richest gentry of our country is going to migrate there and the wise people investing there today will be billionaires in just 5 years....godspeed!

              • pkdch0101
                pkdch0101 commented
                Editing a comment
                Fireheart , Again you are confused between investment and end use........all that i have said and written is only for end users ...........buying a property for INVESTMENT be it anywhere in this region is a STRICT NO NO. And don't advise me to buy anything ................i have already stated the FUTILITY of a second house. We can have endless questions , counter questions and arguements over this ...........but i think we have placed our views on this topic and THAT IS EXACTLY WHY THIS FORUM has been created and not for personal attacks . You can stick to your views and i will stick to mine ...............I hope the people reading this thread pick up the valid points , observations and DECIDE where to spend their HARD EARNED MONEY. Regards
            • #9

              #9

              Re : Futility of a 2nd House when not for END USE..


              1. 80% + buyers know IREF after they booked flats.
              2 . 80% buyers are looking for their first property.
              3 . 60% buyers are in age group of 28-35 years.
              4. Nuclear families
              5 2 or 2+1 bhk in Max demand.
              6. Kuchh phale? Kuchh phasen?
              Naseeb apna apna?

              This is best time for Ist time buyers for their enduse only.

              Affordable flats of guru gram are best option s for investment , reputed builder at premium location 2+1 bhk under 30 lac., 5 years locking

              Comment


              • pkdch0101
                pkdch0101 commented
                Editing a comment
                Yes best time for buyers ONLY FOR THEIR ENDUSE ,
            • #10

              #10

              Re : Futility of a 2nd House when not for END USE..

              Expressway best option s
              Klassic RTM 14Xx size 55 lac
              Seasons 168 3 bhk 45 lac.
              2 bhk 32 lac
              Duplex 135 1.1 Cr
              Today135 yamuna facing 3 bhk 55 lac RTM.

              Expressway rates are similar to noida ext. Low budget only RTM.
              Kosmos
              Klassic
              Seasons
              Today
              VFM

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