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HOW TO INVEST AND MAKE MONEY IN REAL ESTATE

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HOW TO INVEST AND MAKE MONEY IN REAL ESTATE

Last updated: February 8 2012
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  • #21

    #21

    Re : HOW TO INVEST AND MAKE MONEY IN REAL ESTATE

    anildc, my query on entry and exit timing was a serious one and it would be nice if you could explain in more detail.

    Rohit, timing Re market is not worth it - why not make your money in timing the stock market and park your profits in RE for long term?

    RE always works best if held for long periods. Flipping is very costly in money effort and time
    Venky (Please read watch a or before posting)

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    • #22

      #22

      Re : HOW TO INVEST AND MAKE MONEY IN REAL ESTATE

      Originally posted by anildc View Post
      I would like to share my knowledge and experience of real estate investing of 25 years and also invite your comments, judgments, and experiences of the same.
      1. Real estate prices are cyclical in nature, demand and supply based so park your money in reoccurring deposits and wait for right time to enter.


      2. Land and Built up (constructed) properties have different dynamics.


      3. House is a need and investment both. When you are young you can rent a house and invest your money in Land, Bonds or Fixed deposits for higher returns. When you are ageing owning a house becomes a must; to avoid shifting, emotional value and feeling of security. Read in this forum renting versus buying.


      4. When renting a house lookout for longer time frames, leave license can be done in multiples of 11 months, you pay less commissions and fees.


      5. When buying a house calculate your requirement for future (family size) and a thought on city you would like to retire. Older citizens require more security and protection hence a gated community is a must.


      6. When buying a house (or building one) following is the checklist:
      a) Infrastructure of Location; Roads, Water, Electricity, Schools, Market, Drainage, domestic help etc…
      b) Reputation of Builder; history, plan approvals, amenities, specifications, visit to past projects…
      c) Verification of documents by your lawyer and pre approval of banks for loans.
      d) Compensation clauses for delay in possession.
      e) Carpet area and loading for built up.


      7. Buy a house in a project being just launched where rates are mostly lower, in projects where most of the houses are sold builders hike the price on last few. Resale houses in same locality which are little older are available at much lesser rates. Buying property nearing redevelopment can reap rich bonanzas. Read this forum for pros and cons of higher floors.


      8. Returns are higher in Land than constructed property, higher in commercial than residential premises.


      9.Investment in land calls for knowledge of Property card, 7/12 extracts, Mutation, History, Measurement survey, Demarcation, Zone, Subdivision, Sanctioned layouts, Regional Development plan, NA approvals, Set off and NOC from: highways, railways, high tension wires, monuments, rivers and valleys, Society byelaws, Municipal byelaws.(You can google it).


      10. Buy Land in Locations where infrastructure development is expected like bridges, roads, upcoming IT parks, Industrial developments etc…


      11. Always Sell Land where appreciation has maxed out. Cities grow like ripples, keep buying on outer periphery. Hold on to good property like family silver.


      12. Buy Shops, Offices and Flats and rent them out .They give you a productive return and appreciation as well. Returns are lowest in Flats. Buying in booking phase gives you deferred payment and lower rates.


      13. Form groups and co-operatives to collectively invest. Collective purchase power enables you get properties at lower rates.


      14. As a general rule SELL after 12 months into a boom period and BUY after 18 months into recession.


      15. When in doubt always ask because it’s your hard money at stake.


      Will post more later, For any queries please mail me at

      anildc009yahoo.com
      Anil, Great post. Most of your points make perfect sense and are extremely valid in general. The only point where I have difference of opinion is that here we deal with larger chunk of money unlike stocks and hence we tend to think more as a long term investor rather than a short term trader.
      Obviously it would be great to be able to run in a trade mode , but for folks who are in other job for living, the research time required for a good real estate deal really takes good amount of time, and yes making a land deal takes still longer time due to the inherent issues involved.

      In addition most of common people would not do more than say 10 real estate transactions in a lifetime, hence I tend to think long term before deciding on a buy.

      However as mentioned your tips are invaluable and of great help.

      Cheers,
      Birendra.
      Last edited May 25 2011, 02:21 PM.

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      • #23

        #23

        Re : HOW TO INVEST AND MAKE MONEY IN REAL ESTATE

        I don’t want to become REAL ESTATE BABA by predicting next Boom in RE. I have listed just some simple rules and practices which can help most. There are so many factors, parameters of Boom. Like no single philosophy encompasses any life or lives you will have to develop your own investment philosophy depending upon your lifestyle and mind set.

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        • #24

          #24

          Re : HOW TO INVEST AND MAKE MONEY IN REAL ESTATE

          MACRO FACTORS OF BOOM AND RECESSION

          MACRO FACTORS OF BOOM AND RECESSION

          Now Agriculture sector and Service sector are main contributors to GDP. There was manufacturing sector rising at horizon with announcement of DMIC project but with Japanese calamity that might be delayed. Rising Incomes will fuel a Boom. With few seasonal uncertainties agriculture will averagely do well and In service sector there will always be huge supply of cheap Trained, Skilled and Unskilled labour (Avg. starting pay for trained personnel in USA is 20$ per hour as compared to 2$ per hour in India). Our trade balance (Import Export) is mainly affected by import of fuel, the day we become fuel self sufficient it will be biggest single factor for Boom. In the past Builders have been caught with inventory of more than 50,000 flats on hand causing a slowdown. Inflation and Rising living costs also leave little savings for investments. We have a Population of 120 crores and we have very few cities (none planned). Entire population is city wards bound in search of opportunities, education, medical facilities, better lifestyle etc…


          Yes India is in growth phase and real estate is headed north wards with corrections every few years. Land cannot be manufactured; it will remain a scarce commodity. Our regional plans are announced every 25 years , Pune’s last was announced in 1997 , with all merged villages land drying up projects are being announced in nearby grampanchyats and our next regional plan will be announced in 2022. Only GOD knows what’s happening on PMRDA front. It is difficult to find a decent reasonably priced piece of land to make your home. Demand is outpacing supply. Infrastructure development on periphery of cities is slow and minimal. We are plagued with corruption. Our politicians are manipulating markets to fill their coffers. We are living like cockroaches in a can, in very costly real estate as compared to rest of the world, yet prices keep rising.
          Last edited May 25 2011, 03:53 PM.

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          • #25

            #25

            Re : HOW TO INVEST AND MAKE MONEY IN REAL ESTATE

            anildc, great posts/comments .

            Hope that the forum & many of us gain from yr.insight .
            Please read IREF rules | FAQ's

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            • #26

              #26

              Re : HOW TO INVEST AND MAKE MONEY IN REAL ESTATE

              ************************************************** ****
              Shree the same thing happened in 2009 when the Wakad new launches were 2300-2400 psf. Did you use that opportunity?
              ************************************************** ****
              amty_gr

              I miss 2300-2400 rate for wakad as i was onsite. i book the flat for 2700 in late 2009. ( those who got it for 2300 are really smart & lucky). Since my old home is 30 km from wakad, my family members were against my decision.however i made up my mind and finalize the deal in 3 weeks.

              hope my decision would be correct in longer term.

              +VE :
              I would have spend another 5 L if delayed my decision by 8 - 12 months.
              Immediately got tenant after posession.
              able to save VAT & ST.
              got the benifit 8.5 interest rate.
              Wakad & near by area is under development.

              -VE :
              Investment Location (wakad) is far from my home.
              flat is on 10th floor. ( very few options left at that time )
              Posession delayed by 4 months.
              Last edited May 25 2011, 07:55 PM.

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              • #27

                #27

                Re : HOW TO INVEST AND MAKE MONEY IN REAL ESTATE

                Pune municipal corp. has asked for permission from state govt to allow 40% paid FSI for developers if this comes thru than the current rates shall fall. Recently state govt. hiked FSI of redevelopment of old buildings in Mumbai from 1.7 to 3.

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                • #28

                  #28

                  Re : HOW TO INVEST AND MAKE MONEY IN REAL ESTATE

                  What is this? Boom or Recession?

                  Property prices in India increase by 2.4% in January 2011 - says *********** Property Index


                  Property prices in Delhi/NCR drop by 0.6% in January 2011 - says *********** Property Index

                  May 18, 2011 16:21 IST

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                  • #29

                    #29

                    Re : HOW TO INVEST AND MAKE MONEY IN REAL ESTATE

                    gr8 post.. keep up the good work..

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                    • #30

                      #30

                      Re : HOW TO INVEST AND MAKE MONEY IN REAL ESTATE

                      Don't delay your home buying decision because of increase in interest rates - The Economic Times

                      the media and RE Barons nexus???

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