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Investment in Noida Sector 79 or Resale on expressway?

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Investment in Noida Sector 79 or Resale on expressway?

Last updated: February 28 2014
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  • Investment in Noida Sector 79 or Resale on expressway?

    Hi Friends,

    I need advice on making a new investment in real estate.I am planning to make investment of 60-65 lacs in noida region with 50% self fund and 50% bank loan.

    Please advice which option should be most profitable after 4 years horizon.

    1) Buying a pre-launch Lotus Green in sector 79. AI 4500 approx for 1450 sft unit.
    2) Buying a resale in sector 137/168 or 7x. AI rate b/w 4700-5000 for approx 1200 sft unit.
    3) Buying mahagun mirabella sector 79 in 20-80 subvention scheme. total cost is 75 lacs but need to pay only 15 lacs now with 60 lacs of bank loan. EMI on me will start only on offer of possession. So, my per sft rate comes out 5600 AI and in worst case after 3-4 years if resale goes at min 6600 then would make rs 1000. which is 1000*1380 = 13.8 lacs. So on investment of 15 lacs would make 13.8 lacs in 4 years and would exit by selling before possesion.

    Please help me in deciding the best investment option. Zoh aib bhai, Manoja sir, Trial bhai, fatichar , Venky and all vetrans please advice

    Lets talk Logic
  • #2

    #2

    Re : Investment in Noida Sector 79 or Resale on expressway?

    I am going through the same question myself.

    Lotus in sector-79 is still in air, no floor plans or final rate available so am doubtful about that. I am interested in sector 137/143 though.

    Some how from the location perspective I am more positive about the expressway, I am pretty sure in a couple of years this area would come up pretty well but then the question is investment in resale here almost needs 100% payment now.

    Let me know what and why you choose, would help me also.

    Comment

    • #3

      #3

      Re : Investment in Noida Sector 79 or Resale on expressway?

      As you say you are quite comfort in 50 % self funding & 50 % Bank loan.

      Go for 2 nd option

      Buy a decent 1200 sq ft Flat in Resale .. Expressway or Mid Noida

      Let's say you will get 4800 A.I and possession after 6 to 8 months with registry it will cost you 5000 A.I

      Total property cost 1200 * 5000 = 60 Lach

      In the horizon of next 3.5 years .. rates would be 7500

      1200 * 7500 = 90 Lach

      Plus Considering Rented income for 3 years , Average 15 K per month

      15000 * 36 = 5.4 Lach

      You will get Around 95 Lach.

      Reasons for supporting this

      1 - You will have multiple Builders and locations to select in Resale.

      2. Considering current market situation , you will get a very good deal in decent pricing.

      3. No risk of delay , slow construction or any other other land issue.

      4. The property you will buy in resale now would be in completely developed sector after 3.5 years , in compare to other developing sectors.

      Comment

      • #4

        #4

        Re : Investment in Noida Sector 79 or Resale on expressway?

        Hi Mates,

        Thanks for your advice.

        Prashu sir, your reasoning is valid but I have few pointer to add from investment perspective.

        Before that I am considering that out of 3 options suggested Mirabella option in sub-vention is big NO...Please confirm real estate gurus.

        Now coming to 7X/Expressway resale option and Lotus soft launch here are my pointers for both -

        1) In resale -
        * 1200 sft flat with AI 5000 (including registry cost) it will cost 60 lacs
        * 90% payment done to builder, so immediate outgo in resale would be approx 50 lacs. saving 6 lacs for possesion and 4 lacs for registery.
        * out of 50 lacs, black would be arnd 15-20 lacs remaining would be white deal.
        * depending on circumstance (available cash) + bank loan there would be EMI's and lost interest on payment made in resale. assuming 25 lacs loan and 25 lacs self fund , EMI would be 22K per month
        * so overall flat cost would increase until it goes on rent at 15K per month.
        * so actual flat cost in 3-4 years would be approx 65
        * in 3-4 years resale would go to optimistic 6500 per sft
        * 1200 * 6500 = 78 lacs - (any loan amount left. Also, rent went in paying EMI)

        total profit after 3 years 78-65 = 13 lacs - any loan amount
        but registry done and asset build for life

        2) Soft Launch in Lotus
        * 1450 sft 4500 AI = 65 lacs (in soft launch sector 79, launch could be higher)
        * initial payment in 1st year in CLP - 30% of cost = 15 lacs
        * assuming self fund is 25 lacs, initial 1-1.5 years payment managed without bank loan
        * in process can invest balance amount in short term mutual fund, share etc
        * once construction picked up , bank funding will start after 1.5 years from now... so emi of 22K will start. 22*18 = 4 lacs
        * after 3 years total cost = (assuming 90% payment made) 55 lacs + 4 lacs = 60 lacs
        exit after 3 years 1450 * 6500 = 94 lacs

        So profit would be 94-10-60 = 24 lacs (with no registry)

        Yaar these calculations suggest option 2 but still spectical about lotus green , 3c's and so much negative comment about them.

        gurus please advice to get my investment right.

        Trail bhai, fatichar, venky, Zohiab, Manoja and all other veterans please analyse and suggest the best

        Comment

        • #5

          #5

          Re : Investment in Noida Sector 79 or Resale on expressway?

          Hi Buddy,

          As I am going through the same calculations so some points for my clarification -

          1) Why are you considering 4500 AI rate in Lotus 79. I have been told 4250 BSP and other charges, so these other charges I suppose could be much more.

          2) Don't you think it would be tough to sell 1450 sqft 2 BHK in noida market ? In 137/143 sectors we could get 1000 sqft 2BHKs of good size. I suppose they would be easy to sell because of low total cost. Just my view, need your thoughts on this please.

          3) I have to do entire self funding and not go for loan so would you suggest me something differently.

          Seeking opinions please.

          Comment

          • #6

            #6

            Re : Investment in Noida Sector 79 or Resale on expressway?

            Originally posted by LetstalkL View Post
            Hi Mates,

            Thanks for your advice.

            Prashu sir, your reasoning is valid but I have few pointer to add from investment perspective.

            Before that I am considering that out of 3 options suggested Mirabella option in sub-vention is big NO...Please confirm real estate gurus.

            Now coming to 7X/Expressway resale option and Lotus soft launch here are my pointers for both -

            1) In resale -
            * 1200 sft flat with AI 5000 (including registry cost) it will cost 60 lacs
            * 90% payment done to builder, so immediate outgo in resale would be approx 50 lacs. saving 6 lacs for possesion and 4 lacs for registery.
            * out of 50 lacs, black would be arnd 15-20 lacs remaining would be white deal.
            * depending on circumstance (available cash) + bank loan there would be EMI's and lost interest on payment made in resale. assuming 25 lacs loan and 25 lacs self fund , EMI would be 22K per month
            * so overall flat cost would increase until it goes on rent at 15K per month.
            * so actual flat cost in 3-4 years would be approx 65
            * in 3-4 years resale would go to optimistic 6500 per sft
            * 1200 * 6500 = 78 lacs - (any loan amount left. Also, rent went in paying EMI)

            total profit after 3 years 78-65 = 13 lacs - any loan amount
            but registry done and asset build for life

            2) Soft Launch in Lotus
            * 1450 sft 4500 AI = 65 lacs (in soft launch sector 79, launch could be higher)
            * initial payment in 1st year in CLP - 30% of cost = 15 lacs
            * assuming self fund is 25 lacs, initial 1-1.5 years payment managed without bank loan
            * in process can invest balance amount in short term mutual fund, share etc
            * once construction picked up , bank funding will start after 1.5 years from now... so emi of 22K will start. 22*18 = 4 lacs
            * after 3 years total cost = (assuming 90% payment made) 55 lacs + 4 lacs = 60 lacs
            exit after 3 years 1450 * 6500 = 94 lacs

            So profit would be 94-10-60 = 24 lacs (with no registry)

            Yaar these calculations suggest option 2 but still spectical about lotus green , 3c's and so much negative comment about them.

            gurus please advice to get my investment right.

            Trail bhai, fatichar, venky, Zohiab, Manoja and all other veterans please analyse and suggest the best
            Check the layout n loading of lotus green flat first - pata challa it's turn out to be a 1100 sqft flat and bcoz of high loading it is sold as 1450 sqft

            3 years later no end user will buy such high loading flat which will entails equivalent higher monthly maintenence for life..... when 1000's of similar flats with less loading are available all around it makes for a weak case.

            Also see the location and layout of the towers etc......pata chala it's even more congested than boulevard and panache.

            In short - don't get fooled by just BSP and so called expected future "returns"

            Hope it helps

            Comment

            • #7

              #7

              Re : Investment in Noida Sector 79 or Resale on expressway?

              In sector 143 at rate AI 4500 approx you can get direct from builder also like Logix or Sikka all white no need for cash portion. Now days they are giving in 50:50 or 40:60 in PLP plan also so need to take loan till Possession if you have 40% of money.

              Comment

              • #8

                #8

                Re : Investment in Noida Sector 79 or Resale on expressway?

                LetstalkL Sir



                Lotus , Sector - 79 .. will take at least 4 years

                Taking abt rate - 4250 + Service Tax + Car Parking + Floor PLC + View PLC + Lease Rent + IFMS .. + Any other Additional Charges

                Plus when you will transfer the flat to second party , Builder will obviously charge some Transfer Charges ( Rs - 100 to 400 )

                In Any way . it will Cost you 5000 A.I , Just from Builder 's Side.

                So ...

                In Resale case , you are getting a Almost completed Property , multiple options , prime location, developed sector , with good rental income , where you can have registry also at 5000

                In Lotus - 79 case , you are getting just concept not the property , land is all blank , nothing is clear ( Site plan / floor Plan / authority approval ) ,a bigger area flat , minimum 4 years to get possession at 5000


                Now Compare Both Options as per ROI , after 4 years

                1. Resale Case

                1200 sq ft flat , 5000 A.I Rate

                1200 * 5000 = 60 lach

                25 Lach Self Funding

                25 Lach Loan , 22 K per month EMI - 22 * 48 = 10 Lach

                Assuming average rental income 17 K

                17 * 42 = 7.14 Lach

                At the worst case , rate would be 7500 after 4 years

                1200 * 7500 = 90 Lach

                So you will get - 90 Lach ( Total Value ) + 7.5 Lach ( Rent )

                Total – 97.5 Lach - 10 Lach ( Loan Amount ) = 87.5 Lach

                Total Profit = 87.5 Lach – 60 Lach = 27 Lach Approx

                ROI - 45 %

                2 . In Lotus , Sector – 79 Case

                Area – 1450

                Rate – 5000 A.I

                1450 * 5000 = 73.5 Lach

                37 Lach Self Funding , 37 Lach Bank Loan

                37 Lach you will by pay by own in 1.5 years

                and per construction lets assume , your average monthly EMI would be 28 K for 37 lach bank loan for 2.5 years

                Total EMI = 28 * 30 = 8.4 Lach

                after 4 years , lets assume prices would be 7100 ( Compare to developed sector & area of flat )

                Total Value - 1450 * 7100 = 1.03 Cr

                103 Lach – 8.5 Lach ( Loan Amount ) = 94.5 Lach

                Total Profit – 94.5 – 73.5 = 21 Lach

                ROI = 28 %

                * In Resale case your loan EMI tenure would be 4 years , so you will get additional approx 2 lach profit as principle amount deduction.

                correct me if I m wrong somewhere.
                Last edited February 25 2014, 03:30 AM.

                Comment

                • #9

                  #9

                  Re : Investment in Noida Sector 79 or Resale on expressway?

                  I would suggest hold on till this year end and buy RTM, before registry. There would be some pressure on investers to avoid the registry cost. I believe prices will not move for another year.

                  @Prashu - Strongly disagree on prices being 7500 in next 4 years. Never going to happen. There are no buyers today at 4200-5000, how will the same end users will be able to afford 7500 in 2018? There is no reasoning behind this projection.
                  Last edited February 25 2014, 11:41 AM.

                  Comment

                  • #10

                    #10

                    Re : Investment in Noida Sector 79 or Resale on expressway?

                    Kalesh JI

                    Mahaugun Morpheus
                    Mahaun Maple
                    Amrapali Eden park
                    Stellar King's Court
                    Omaxe Twin Tower
                    Antriksh Greens
                    Kailash Dham
                    Windsor Greens

                    Purvanchal Silver City
                    ATS Greens
                    Parshvnath Prestige
                    Omaxe Grandwoods
                    Supertech Emrald Court
                    Eldeco Olympia

                    & many more ......

                    All of them are RTM property in Noida and Currently rates are Between 7500 - 9000

                    and 4 years back many of them were available at 4000 to 5000

                    So ... for RTM property 4 years , having lots of potential

                    No doubt .. Good projects which are available at 5000 now , will touch 8000 in next 4 years.

                    Comment

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