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Keep Moving from project to project OR Hold on the property for the longest time...

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Keep Moving from project to project OR Hold on the property for the longest time...

Last updated: August 12 2012
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  • Keep Moving from project to project OR Hold on the property for the longest time...

    For Example, 1.5 yrs ago i bought a flat for 25 lacs and at current i am having a profit of 10 lacs with still 1.5 yrs remaining for possesion...Should i wait for this remaining period to maximise the profit which could be 20 lacs at possesion...OR

    I sell the current flat which will give me around capital to invest in 40 lacs flat...

    I guess best time to exit the investment is just before possession...but moving from flat to flat will also give me the financial liberty in day to day life(Could keep some cash for self-living) whereas getting struck with one flat will always have me financially drained....

    Kindly suggest...
  • #2

    #2

    Re : Keep Moving from project to project OR Hold on the property for the longest time...

    I hope you know that you have to pay tax on profit.

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    • #3

      #3

      Re : Keep Moving from project to project OR Hold on the property for the longest time...

      Originally posted by lamps03 View Post
      For Example, 1.5 yrs ago i bought a flat for 25 lacs and at current i am having a profit of 10 lacs with still 1.5 yrs remaining for possesion...Should i wait for this remaining period to maximise the profit which could be 20 lacs at possesion...OR

      I sell the current flat which will give me around capital to invest in 40 lacs flat...

      I guess best time to exit the investment is just before possession...but moving from flat to flat will also give me the financial liberty in day to day life(Could keep some cash for self-living) whereas getting struck with one flat will always have me financially drained....

      Kindly suggest...
      Real estate is a long term game but then no one goes bankrupt by booking profits at reasonable intervals. If you think that your investment in that flat is keeping you "financially drained" and you are losing your sleep because of that, then exit ASAP. Otherwise your decision should depend solely on expected ROI and nothing else.

      My personal experience tells me that in order to accumulate certain amount of wealth, most middle class folks like myself have to make certain sacrifices and the pain of staying "financially drained" is one of those sacrifices.

      Comment

      • #4

        #4

        Re : Keep Moving from project to project OR Hold on the property for the longest time...

        Originally posted by fatichar View Post
        I hope you know that you have to pay tax on profit.
        most of RE deals have black color...how tax liability will be..

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        • #5

          #5

          Re : Keep Moving from project to project OR Hold on the property for the longest time...

          Originally posted by lamps03 View Post
          For Example, 1.5 yrs ago i bought a flat for 25 lacs and at current i am having a profit of 10 lacs with still 1.5 yrs remaining for possesion...Should i wait for this remaining period to maximise the profit which could be 20 lacs at possesion...OR

          I sell the current flat which will give me around capital to invest in 40 lacs flat...

          I guess best time to exit the investment is just before possession...but moving from flat to flat will also give me the financial liberty in day to day life(Could keep some cash for self-living) whereas getting struck with one flat will always have me financially drained....

          Kindly suggest...

          nice topic to start with....i m also in the same delima...

          but my view is property gives you the best profit in 6-8 years...

          secondly you have the possesion of flat..side rental income which can compensate for your emi and you can take loan for another investment...

          thirdly...you have a ready flat not some under construction property....if you keep selling from one under construction to another you never know when you end up with wrong project or builder or any legal issue..like NE...because under construction to under construction kab bane koi bharosa nahi..ek bar to risk le ke possesion le liya phir kyo bar bar use paise ko under constuction mai fasana..appreciate to ready to move in flat bhi hoga..thoda kam sahi..peace of mind to hai.....

          agar invest karna hai to uske bad fresh capital se karo..project fash jaye to kam sa kam ek property to safe hai......

          Always consider risk factor in real estate..pata chala 20 ke 30 kar liye 30 ke...50..phir 50 ek aise project mai laga diye..jaha kuch lafda hai....sari rotation policy or smartness vahi dhari ki dhari rah jati hai bande ki...

          Under construction property is like gamble in ....jaise mai agar apne 100 lagaye aur 100 hi kama liye...by chance to apni pahle 100 ko side kar lo aur profit pe khelo...agar luck hua to aage aur bana loge nahi to apni capital to safe hai....pahli bar mai hi har gaye to..apna badluck like NE.....


          my personal views....

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          • #6

            #6

            Re : Keep Moving from project to project OR Hold on the property for the longest time...

            Originally posted by ankitmittal14 View Post
            most of RE deals have black color...how tax liability will be..
            tax liability sharifo ke liye hai ankit sir...

            my POV is to keep the property for matleast 3 years after agreement date ..then you can sell it for all white and invest that white in some newly launched project where every installment will goes in white ....

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            • #7

              #7

              Re : Keep Moving from project to project OR Hold on the property for the longest time...

              I think any place you invest in that gives you decent return and appreciation in actual resale value every year on year... then it should be held onto till the time it is increasing... What is the point of selling an appreciating asset and then risking your money again in another investment which might not appreciate well ???

              But then again - most important is for people to be aware of the actual resale rates prevailing rather than moving with a little less than the builder appreciation rates !

              As for the tax issue Fatichar bhai... when you go into purchase of a property with a builder maximum is white ( and a little black )... for which you will as it is b paying your taxes if you are investing money to buy that property...

              But in the case of resale... u only get ur white amount back in books and the remaining profit is mostly given as black... so there should'nt be much tax on this !

              Isnt that how it works ... or am i missing something ?
              Last edited August 10 2012, 08:35 PM.

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              • #8

                #8

                Re : Keep Moving from project to project OR Hold on the property for the longest time...

                For the benefit of investing public you should be rotating it, so that everyone has their sense of happiness going along with them.
                All the public who can afford property at this rate is owning 2-3. Now, from here if you still expect steep rise like last few years, only the existing owners will have the capacity to buy.
                so the way it should go is:
                A sells to B
                B sells to C,
                C sells to D,
                D sells to A.
                Everyone will be happy, that they are rotating their money.

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                • #9

                  #9

                  Re : Keep Moving from project to project OR Hold on the property for the longest time...

                  I think a lot depends on the market cycle. If you look at today's scenario, u will notice the following:

                  3C started boulevard at very low rates. Developed the project (and couple of other strategic ones - Panache and zing) and worked alongside the brokers and investors to hike the price as much as possible. 3C bought all the land on Expressway at something like 20K psft. Boulewavrd reached 5200 from 2800. But Nirmal Singhjee sold all other land to duffer builders at even 70K psqm. Sardar Jee to apne paise le ke first class chalte bane. Janta ke flats ka rate 2 times hua to unke land ka more than 3 times.

                  Ab naye builders launch kar rahe hain very costly. Initially investors ki madad lete hain...kyonki zameen ke paise dene hain Sardaar Jee ke. Phir Khoon-Khraba rate laate hain. Brokers itne ho gaye hain ki shuru ka saara maal wo hi hadap kar jaate hain. Phir janta ko bhech dete hain. Builder rate bhadata rahta hai.

                  Zara resale ke aur builder ke rates main difference dekho -

                  Arista - Fresh 5K, Resale 4K
                  Tiera - Fresh 5.5K+ 750 PLCs etc., Resale 4400 all inclusive
                  Zest- Resale 3.3 K
                  etc. etc.

                  Ab batao is cycle main does it make sense to buy fresh and hold long? NO SIR!!! Wo time nikal gaya. Time is - Ghuso aur chipkayo. Why should i buy a Gulshan ikebana at 3.9 K + PLC when I can get aLogix Greens at a lower rate all inclusive. Look at the difference in progress.

                  Suppose, I bought Gulshan at 3550. Sold after 2 months at 3750. 5 lakh pe 2.7 lakh banaye. Kya galat hai? Ye chalta hai ab. Lamba nahin. Keep doing that. Ghuso, niklo. Suppose Gulshan will go to 5 K...tab bhi resale 4 K se neeche hi hogi. Upar kyon hogi? Can't I buy Tierra/Seasons/Zing/Golden Palm/Xavier/Subhkamna/blah blah?

                  Bandhuon...jagoo...market scenario samjho. Junta se aage raho...peeche nahin. Long term is only for jise ghar khareedna hai....aur resale ke liye kuccha nahin hai.

                  Comment

                  • #10

                    #10

                    Re : Keep Moving from project to project OR Hold on the property for the longest time...

                    Originally posted by Anirudh113 View Post
                    I think any place you invest in that gives you decent return and appreciation in actual resale value every year on year... then it should be held onto till the time it is increasing... What is the point of selling an appreciating asset and then risking your money again in another investment which might not appreciate well ???
                    Absolutely correct statement.
                    Originally posted by Anirudh113 View Post
                    But in the case of resale... u only get ur white amount back in books and the remaining profit is mostly given as black... so there should'nt be much tax on this !
                    Let me correct it by saying "....the remaining profit is mostly asked as black by seller so as to evade paying taxes on it....". Buyers are ready to give all white mostly unless someone wants to rotate his colored money into it that he has got by selling some other property.

                    Comment

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