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Dear ck.kislay,
You are subscribed to the thread "Real Estate Bubble Set to Burst Again in India" by MANOJa, there have been 30 post(s) to this thread, the last poster was stocksurgeon.
https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/13876-real-estate-bubble-set-to-burst-again-in-india
These following posts were made to the thread:
https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/13876-real-estate-bubble-set-to-burst-again-in-india
Posted by: humblefool
On: July 3 2017 09:44 AM
[QUOTE=southsea;n2528672]>[FONT=trebuchet ms]The house expense will largely look as a sunk expense. The terminal value of a house is zero. That too is a sunk cost. Most people dont see this. Renting offers mobility. Especially useful in these days where the average job is for 4-5 years. Or you deal with potentially long commutes. Being a landlord is not easy as people are making it out to be here. You dont just sit back and enjoy the rents flow in. Tenants move out more often nowadays (job mobility), you could get a lousy tenant who doesnt pay on time, trashes your house and worse refuses to leave, and you have to spend more on the upkeep to attract new tenants. 2.5% is the gross rental yield. But once you factor in income taxes, land taxes and these hidden costs your expected return is more like [/FONT]1.5% . All the old areas in Bangalore have many 'landlords'. People who built their homes in the 60s, 70s and 80s on 30*40 or 60*40 sites. They usually have a floor above that gives them a measly 25K or so in rent. After taxes, frequent painting and maintenance costs, etc the net yield is very low. Classic case of being asset rich but cash poor. A colleague of mine had one such landlord. When he wanted to change his house due to a job change, the landlord could not afford to give him back his deposit !! . In general over the long term the market creates an equilibrium. If buying was more profitable then prices would rise to the point where renting makes more sense. And vice-versa. Currently with prices being high the pendulum has swung in favour of renters.[/QUOTE] [FONT=trebuchet ms]Terminal value of Land is never zero. And mobility is a sweet or horrible thing depending on which age group you belong to. For young people mobility is good, as it gives great career options. As you age, mobility is nothing but the equivalent of being a football which will be kicked to the lowest affordable rent area. Like I have always said, RE is not for everybody. Sadly. Renting only makes sense in cases where you are young, and have some ability to absorbs risks and work. As you age, Rent is one of those brutal social taxes you pay for your mere existence. Else the rent you pay on longer term will be higher(sometimes far higher) than the cost of the homes you will stay in. The worst part is you pay more and you won't even own the home.[/FONT]
With warm regards,
Team IREF
https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/13876-real-estate-bubble-set-to-burst-again-in-india
Posted by: humblefool
On: July 3 2017 09:48 AM
[QUOTE=harshogle;n2529098] You are saying as if someone has to do manual calculations. Bill is generated by invoiving machine / system. Have you ever looked at the bill previously? Against each good there is a price which is MRP or dicounted price. In the end, total tax component is mentioned. It is very simple and will continue to work as before. Even previously, VAt rates were into 10 different slabs with various cesses and taxes. [/QUOTE] [FONT=trebuchet ms]I think their point is what about local traders. Kirana people, How will they manage? Not everybody can afford to spend money to set up IT infrastructure.[/FONT]
With warm regards,
Team IREF
https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/13876-real-estate-bubble-set-to-burst-again-in-india
Posted by: spectre
On: July 3 2017 10:09 AM
[QUOTE=humblefool;n2529316] [FONT=trebuchet ms]I think their point is what about local traders. Kirana people, How will they manage? Not everybody can afford to spend money to set up IT infrastructure.[/FONT][/QUOTE] When someone's turnover is above 20lakh per annum, is it too straining for them to set up/borrow IT infrastructure?
With warm regards,
Team IREF
https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/13876-real-estate-bubble-set-to-burst-again-in-india
Posted by: humblefool
On: July 3 2017 10:18 AM
[QUOTE=spectre;n2529323] When someone's turnover is above 20lakh per annum, is it too straining for them to set up/borrow IT infrastructure?[/QUOTE] [FONT=trebuchet ms]Can't comment, Anybody running a Kirana/Small-Business can chime in and comment. But this is like classic US style purge of small business people. Most can't compete with the likes of Walmart, Target and Costco for these reasons. Retailing/Small-Business are very narrow margin businesses. And you can never out compete the scale of a larger company if you are forced to compete on their terms. This could be good for the overall economy. At the expense of short term pain, albeit for crores of middle men and Small business. Politically how this fares is anybody's guess. But how this affects everyday small time businesses and traders? Good parts few, bad parts a lot. Ultimate on the very long term, all these small time business people will have to find more productive work to do. On the short term, a lot of pain, trouble finding new work, financial hardships etc etc.[/FONT]
With warm regards,
Team IREF
https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/13876-real-estate-bubble-set-to-burst-again-in-india
Posted by: spectre
On: July 3 2017 10:28 AM
[QUOTE=humblefool;n2529312] [FONT=trebuchet ms]Terminal value of Land is never zero. And mobility is a sweet or horrible thing depending on which age group you belong to. For young people mobility is good, as it gives great career options. As you age, mobility is nothing but the equivalent of being a football which will be kicked to the lowest affordable rent area. Like I have always said, RE is not for everybody. Sadly. Renting only makes sense in cases where you are young, and have some ability to absorbs risks and work. As you age, Rent is one of those brutal social taxes you pay for your mere existence. Else the rent you pay on longer term will be higher(sometimes far higher) than the cost of the homes you will stay in. The worst part is you pay more and you won't even own the home.[/FONT][/QUOTE] My own experience with owning and renting is completely opposite. To be specific, In 2008 I stayed in a 13 acre apartment complex with various facilities by paying 13000 per month (including maintenance) and in 2017 I stay in another apartment complex of around 18 acre by paying 23000 per month (including maintenance)! Bank interest was always way higher than the rent. Now the one I stayed in 2008 is not in great shape and shows aging - leakages, electrical line problems, sewage problems, STP problems .... The current though around 5 years old, started showing the same. Renting individual house is always cheaper as they don't come with maintenance charges and owners are always skeptical about tenants! The rent of around 1000sqft carpet area in Sahakaranagar (really great area to live) comes at less than Rs.20000/- ! On the other hand, my own apartment (around 15acres complex) gave me trouble to find good tenant. The damages done by one tenant could only be discovered after few months when the next tenant started living, by that time I had no option to deduct money for damages! RE bulls always believe in paper returns and build castles around it.
With warm regards,
Team IREF
https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/13876-real-estate-bubble-set-to-burst-again-in-india
Posted by: humblefool
On: July 3 2017 10:50 AM
[QUOTE=spectre;n2529326] My own experience with owning and renting is completely opposite. To be specific, In 2008 I stayed in a 13 acre apartment complex with various facilities by paying 13000 per month (including maintenance) and in 2017 I stay in another apartment complex of around 18 acre by paying 23000 per month (including maintenance)! Bank interest was always way higher than the rent. Now the one I stayed in 2008 is not in great shape and shows aging - leakages, electrical line problems, sewage problems, STP problems .... The current though around 5 years old, started showing the same. Renting individual house is always cheaper as they don't come with maintenance charges and owners are always skeptical about tenants! The rent of around 1000sqft carpet area in Sahakaranagar (really great area to live) comes at less than Rs.20000/- ! On the other hand, my own apartment (around 15acres complex) gave me trouble to find good tenant. The damages done by one tenant could only be discovered after few months when the next tenant started living, by that time I had no option to deduct money for damages! RE bulls always believe in paper returns and build castles around it.[/QUOTE] [FONT=trebuchet ms, helvetica, sans-serif]Buy plot early in the economic cycle, spend money to build a 3 storey building, Say even a 4 storey building. Cost of building 1 crore. Plot price is largely sunk expense buy now. In Sahakaranagar this building is now worth 2 crore. Lets take your rent. 20,000 per month, per floor. 80,000 for 4 floors. 9,60,000 per year. 9 crore, 60 lacs over 10 years. By now even if the property was built on loan, inflation has eating the loan big time. And in 10 years property price has appreciated. Very likely 3.5 - 4 crores by 2028. The owner has long recovered his investment and is enjoying rent income on top of property price appreciation. The guy who was renting paid for the owners investment, and now hasn't even a brick to show for. The owner has very likely used the returns to seed further investments. Where more gullible renters are paying for his investments. NEVER EVER RENT, on very long periods of time.[/FONT]
With warm regards,
Team IREF
https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/13876-real-estate-bubble-set-to-burst-again-in-india
Posted by: spectre
On: July 3 2017 11:13 AM
[QUOTE=humblefool;n2529333] [FONT=trebuchet ms, helvetica, sans-serif]Buy plot early in the economic cycle, spend money to build a 3 storey building, Say even a 4 storey building. Cost of building 1 crore. Plot price is largely sunk expense buy now. In Sahakaranagar this building is now worth 2 crore. Lets take your rent. 20,000 per month, per floor. 80,000 for 4 floors. 9,60,000 per year. 9 crore, 60 lacs over 10 years. By now even if the property was built on loan, inflation has eating the loan big time. And in 10 years property price has appreciated. Very likely 3.5 - 4 crores by 2028. The owner has long recovered his investment and is enjoying rent income on top of property price appreciation. The guy who was renting paid for the owners investment, and now hasn't even a brick to show for. The owner has very likely used the returns to seed further investments. Where more gullible renters are paying for his investments. NEVER EVER RENT, on very long periods of time.[/FONT][/QUOTE] Depends on how big a plot is! The FAR is 1.75, I believe. So, in most cases you can make G+2 floor. Where's the parking? As you said, such people will buy car and not house, so expect parking. Also number of kitchens allowed is also limited! Who'll pay the taxes? Now, you can make anything illegally and keep showing that as proof. FYI, the plots in sahakarnagar is built in 1980s. Original owners are very unlikely to enjoy the benefit, it's their next generation who enjoys! :)
With warm regards,
Team IREF
https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/13876-real-estate-bubble-set-to-burst-again-in-india
Posted by: TruthSeeker1
On: July 3 2017 11:19 AM
[URL="http://www.ndtv.com/tamil-nadu-news/no-films-at-movie-theatres-in-tamil-nadu-from-today-10-updates-1719749?pfrom=home-lateststories"]http://www.ndtv.com/tamil-nadu-news/...-lateststories[/URL] Didnt we tell here that local bodies can add on more taxes on top of the ridiculous GST... ? One nation one tax ? ghanta.... Its the sovereign right of states and their local bodies to levy added taxes and no GST can take it away... And the protest is not just about about the new tax burdain but the removal of exemption on Tamil movies :) lol. NO wonder with no taxes Tamils had a thriving film industry which GST threatens to destroy. Indian union's problems will compound from here on due to this mindless centralisation of power .....
With warm regards,
Team IREF
https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/13876-real-estate-bubble-set-to-burst-again-in-india
Posted by: southsea
On: July 3 2017 11:37 AM
[FONT=trebuchet ms, helvetica, sans-serif]>[I]Buy plot early in the economic cycle, spend money to build a 3 storey building, Say even a 4 storey building. Cost of building 1 crore. Plot price is largely sunk expense buy now. In Sahakaranagar this building is now worth 2 crore. Lets take your rent. 20,000 per month, per floor. 80,000 for 4 floors. 9,60,000 per year. 9 crore, 60 lacs over 10 years. By now even if the property was built on loan, inflation has eating the loan big time. And in 10 years property price has appreciated. Very likely 3.5 - 4 crores by 2028. The owner has long recovered his investment and is enjoying rent income on top of property price appreciation.[/I] Looks like rosy calculations from armchair theoreticians. The gentry is moving into apartments with facilities. The ones who can afford high rents and kind you want as tenants will not want to stay in a 4 story matchbox with 1 feet separation from the neighbouring matchbox. Also the building depreciates with age. At age 30 its value is likely zero. People think renting is easy money. In reality nowadays it is no different from a small retailer competing with a large one. The larger one can offer parking, security guards, swimming pools, maintenance on call, yoga classes, etc. i.e operate at scale and offer all the things that people with money want and expect. Sure you can still eke out a living [/FONT]running a kirana store. But who wants that anymore ?
With warm regards,
Team IREF
https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/13876-real-estate-bubble-set-to-burst-again-in-india
Posted by: humblefool
On: July 3 2017 11:40 AM
[QUOTE=southsea;n2529346]Looks like rosy calculations from armchair theoreticians. The gentry is moving into apartments with facilities. The ones who can afford high rents and kind you want as tenants will not want to stay in a 4 story matchbox with 1 feet separation from the neighbouring matchbox. Also the building depreciates with age. At age 30 its value is likely zero. People think renting is easy money. In reality nowadays it is no different from a small retailer competing with a large one. The larger one can offer parking, security guards, swimming pools, maintenance on call, yoga classes, etc. i.e operate at scale and offer all the things that people with money want and expect. Sure you can still eke out a living running a kirana store. But who wants that anymore ?[/QUOTE] [FONT=trebuchet ms]I seriously hope more and more think like you. Makes life for us investors very very easy.[/FONT]
With warm regards,
Team IREF
https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/13876-real-estate-bubble-set-to-burst-again-in-india
Posted by: humblefool
On: July 3 2017 11:44 AM
[QUOTE=spectre;n2529337] Depends on how big a plot is! The FAR is 1.75, I believe. So, in most cases you can make G+2 floor. Where's the parking? As you said, such people will buy car and not house, so expect parking. Also number of kitchens allowed is also limited! Who'll pay the taxes? Now, you can make anything illegally and keep showing that as proof. FYI, the plots in sahakarnagar is built in 1980s. Original owners are very unlikely to enjoy the benefit, it's their next generation who enjoys! :)[/QUOTE] [FONT=trebuchet ms]Plots for Sahakaranagar were built in 80's, but before the airport was announced you could buy them for pretty cheap. If you take home loan you save on taxes. And you are getting a rented home and not some 5-star accommodation. Park wherever you like, you are rent labor, your sole purpose is to pay for our investments. [/FONT]
With warm regards,
Team IREF
https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/13876-real-estate-bubble-set-to-burst-again-in-india
Posted by: VibhorD
On: July 3 2017 11:46 AM
[QUOTE=humblefool;n2529347] [FONT=trebuchet ms]I seriously hope more and more think like you. Makes life for us investors very very easy.[/FONT][/QUOTE] All the best to you investors. Please keep providing more and more quality housing for us renters at fraction of the cost.
With warm regards,
Team IREF
https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/13876-real-estate-bubble-set-to-burst-again-in-india
Posted by: spectre
On: July 3 2017 11:48 AM
[QUOTE=humblefool;n2529348] [FONT=trebuchet ms]Plots for Sahakaranagar were built in 80's, but before the airport was announced you could buy them for pretty cheap. If you take home loan you save on taxes. And you are getting a rented home and not some 5-star accommodation. Park wherever you like, you are rent labor, your sole purpose is to pay for our investments. [/FONT][/QUOTE] As far as saving taxes, one saves tax on HRA as well. Regarding "Park wherever you like" - what is your opinion on the following? Don't have parking space? Can't buy car: Centre mulls new norm, Read more at: [url]http://timesofindia.indiatimes.com/india/dont-have-parking-space-cant-buy-car-centre-mulls-new-norms/articleshow/56130374.cms[/url]
With warm regards,
Team IREF
https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/13876-real-estate-bubble-set-to-burst-again-in-india
Posted by: VibhorD
On: July 3 2017 11:52 AM
[QUOTE=humblefool;n2529347] [FONT=trebuchet ms]I seriously hope more and more think like you. Makes life for us investors very very easy.[/FONT][/QUOTE] It's because of contributions from good Samaritans (Investors) like you, the rentals in places like Gurgaon are at all time low. Apartments which cost more than 1.25 crores are going for 20000 monthly rent. You guys are really working hard towards providing quality housing to people with limited means. Really thanks a lot for that. :)
With warm regards,
Team IREF
https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/13876-real-estate-bubble-set-to-burst-again-in-india
Posted by: spectre
On: July 3 2017 11:52 AM
Mumbai property: Builders inventory at a whopping Rs 2.5 lakh cr as unsold units pile up Read more at: [url]http://www.financialexpress.com/india-news/mumbai-property-builders-inventory-at-a-whopping-rs-2-5-lakh-cr-as-unsold-units-pile-up/746245/[/url] RE bulls can claim that all such news is written by people who don't know ground reality!
With warm regards,
Team IREF
https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/13876-real-estate-bubble-set-to-burst-again-in-india
Posted by: amancrapbox
On: July 3 2017 11:58 AM
[QUOTE=humblefool;n2529348] [FONT=trebuchet ms]Plots for Sahakaranagar were built in 80's, but before the airport was announced you could buy them for pretty cheap. If you take home loan you save on taxes. And you are getting a rented home and not some 5-star accommodation. Park wherever you like, you are rent labor, your sole purpose is to pay for our investments. [/FONT][/QUOTE] You made money on this because airport came up. Not because real estate investment, just by itself was a wise decision. Calculate your IRR, and you'll know you need a continuous 6-7% appreciation per year just to break even over next 15-20 years. Even at this rate, you'll have hassles of construction, rent collection, finding new tenants every now and then, maintenance. Not at all worth it, unless you got land for free/ low cost, and then the price suddenly shot up, in which case, as I said - money was made on an event, not a general real estate investment.
With warm regards,
Team IREF
https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/13876-real-estate-bubble-set-to-burst-again-in-india
Posted by: Dkumar12
On: July 3 2017 12:09 PM
My 2 cents for staying on rent on a floor-- Don't forget the issue of parking. I stayed in Gurgaon and there was fight for parking every other day.. Every one treats public parking as their own birth right if it falls in front of their house.. Then fight with landlord on water usage because the same water tanks are used by all 2-3 floors.. Few people secretly use 1-2 electricity appliances from tenants connection..and that sub meter also charge on higher side.. Plus bear the nuisance of landlord specially if they are local- Do this, Do that, This is not allowed... that is not allowed.. Pay some extra money and get peace in apartment.
With warm regards,
Team IREF
https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/13876-real-estate-bubble-set-to-burst-again-in-india
Posted by: humblefool
On: July 3 2017 12:11 PM
[QUOTE=spectre;n2529351] As far as saving taxes, one saves tax on HRA as well. Regarding "Park wherever you like" - what is your opinion on the following? Don't have parking space? Can't buy car: Centre mulls new norm, Read more at: [URL="http://timesofindia.indiatimes.com/india/dont-have-parking-space-cant-buy-car-centre-mulls-new-norms/articleshow/56130374.cms"]http://timesofindia.indiatimes.com/i...w/56130374.cms[/URL][/QUOTE] [FONT=trebuchet ms]Rent please, continue to rent. :) Also on that parking think firstly and most importantly, the government can't even enforce strict tax accountability even in case of clear evidence. These kind of pie in the sky laws are hilarious. Either way, you know how Auto rickshaw parking works right? In every area there are rented spaces where drivers pay to park. I see huge paid Multi level parking lots in every area, if these laws are passed. That will be new business opportunity. As usual, whoever owns the lands wins. Indians are brilliant- for every new thing you want to do, there is a work around which exists. Try harder.[/FONT]
With warm regards,
Team IREF
https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/13876-real-estate-bubble-set-to-burst-again-in-india
Posted by: humblefool
On: July 3 2017 12:14 PM
[QUOTE=amancrapbox;n2529358] You made money on this because airport came up. Not because real estate investment, just by itself was a wise decision. Calculate your IRR, and you'll know you need a continuous 6-7% appreciation per year just to break even over next 15-20 years. Even at this rate, you'll have hassles of construction, rent collection, finding new tenants every now and then, maintenance. Not at all worth it, unless you got land for free/ low cost, and then the price suddenly shot up, in which case, as I said - money was made on an event, not a general real estate investment.[/QUOTE] [FONT=trebuchet ms, helvetica, sans-serif]Not sure what your point is, calculated risks pay really well. And yeah, there are hassles to everything. Getting a entry level job requires 22 years of studies, investments in time, slogging and all that. [/FONT]
With warm regards,
Team IREF
https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/13876-real-estate-bubble-set-to-burst-again-in-india
Posted by: spectre
On: July 3 2017 12:26 PM
[QUOTE=Dkumar12;n2529365]My 2 cents for staying on rent on a floor-- Don't forget the issue of parking. I stayed in Gurgaon and there was fight for parking every other day.. Every one treats public parking as their own birth right if it falls in front of their house.. Then fight with landlord on water usage because the same water tanks are used by all 2-3 floors.. Few people secretly use 1-2 electricity appliances from tenants connection..and that sub meter also charge on higher side.. Plus bear the nuisance of landlord specially if they are local- Do this, Do that, This is not allowed... that is not allowed.. Pay some extra money and get peace in apartment.[/QUOTE] Ditto in Bengaluru. Tried to stay in house - which offer larger space at much cheaper rate. But problems are plenty. In addition, BDA parks are so crowded that my kids were hardly getting chance to even access swings! On top, owners in the street rarely chat with tenants, which hardly mattered for me but was an issue with my wife! Maid was cheaper, but maids were more keen to work in apartments as they pay more and jobs are plenty. So finding maid was difficult. Same for water tanker, you call 10 times, they hardly turn up. In apartments they go by volume! Eventually decided to buy peace with money - moved to apartment.
With warm regards,
Team IREF
https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/13876-real-estate-bubble-set-to-burst-again-in-india
Posted by: amancrapbox
On: July 3 2017 01:00 PM
[QUOTE=humblefool;n2529371] [FONT=trebuchet ms, helvetica, sans-serif]Not sure what your point is, calculated risks pay really well. And yeah, there are hassles to everything. Getting a entry level job requires 22 years of studies, investments in time, slogging and all that. [/FONT][/QUOTE] You buy land worth rs 1 crore, construct worth rs 1 crore. Net monthly outgo/ opportunity cost at modest return of 9% per annum is almost rs 1.8 lakh. Where do you make money? Even if you don't have to take a loan for land, and only a fraction for construction, it's better to sell-off at market rate, park your money in a mutual fund at a good time, and live a hassle-free life.
With warm regards,
Team IREF
https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/13876-real-estate-bubble-set-to-burst-again-in-india
Posted by: Que Sera
On: July 3 2017 01:35 PM
[QUOTE=spectre;n2529323] When someone's turnover is above 20lakh per annum, is it too straining for them to set up/borrow IT infrastructure?[/QUOTE] 20 lakh pa is 7500 per day for a five day week. 20% net margins yield 4 lacs pa or 33,333 per month
With warm regards,
Team IREF
https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/13876-real-estate-bubble-set-to-burst-again-in-india
Posted by: NG2012
On: July 3 2017 02:35 PM
We need all kinds of people. Savers, investors, splurgers. Emotionals and calculating. Without splurgers, investors will not thrive. Without investors, wasters cannot survive. Over fairly long period of time (40-50 years?) most asset classes should match and it will be directly proportional to the growth of the nation. Over long term real estate seems to get affected by way too many external factors. So we have large dilapilated palaces in smaller towns of India standing as testimonials of long gone past and snake infested areas turning into thriving malls within a decade. My personal opinion is that one should buy the best house one can. Yes, renting does make financial sense and buying house at inflated prices can be a mistake. but then getting married is also a kind of financial blunder. Economics and Excel sheets can prove that producing kids also causes financial loss. Wasting money is an important part of life that why people want to spend money on gyms, expensive clothes, gold, expensive cars, pretty wives, kids, exotic vacations, decent houses etc. All this brings us intangible benefits. For an average Joe, investment is an investment only if he/she liquidates it at profit. And liquidates it before he has to pay attention to his prostate health. Otherwise it is sheer wastage of money. A large percentage of real estate investors never liquidate it and so they are just throwing away their money for some morbid pleasure. By the time people turn 60, they label there RE portfolio as the favor that they intend to do to their kids. Which should work if they have only one child. When there are more than one child, it is a disaster. My another weird observation is that sad and unfortunate people tend to accumulate more real estate. Most devoted real estate investors (i.e. individuals with 75% networth in RE) tend to hate their brothers and uncles (father's brothers) due to property related issues. At the same time people who splurge their money tend to be from happy and indulgent families. [B]NOTE: [/B]This is just based on my limited experience and I am hopeful that I am wrong. Moreover I am considering small time investors and not Donald Trumps of the world.
With warm regards,
Team IREF
https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/13876-real-estate-bubble-set-to-burst-again-in-india
Posted by: humblefool
On: July 3 2017 02:46 PM
[QUOTE=amancrapbox;n2529398] You buy land worth rs 1 crore, construct worth rs 1 crore. Net monthly outgo/ opportunity cost at modest return of 9% per annum is almost rs 1.8 lakh. Where do you make money? Even if you don't have to take a loan for land, and only a fraction for construction, it's better to sell-off at market rate, park your money in a mutual fund at a good time, and live a hassle-free life.[/QUOTE] [FONT=trebuchet ms, helvetica, sans-serif]Did you even read the comment before that one or, you have already made up your mind on this? I clearly mentioned that house needs to be built on a land purchased way earlier. Which means your cost dropped by 50% right there. You take a loan, which is deprecating at the rate of inflation. On top of this property price appreciates and you make rent. Plus you save on taxes when it comes to taking a loan. If you still can't understand from where you make money here, real estate investments are not for you. Stick to your mutual funds. Plus this really makes me curious. People here keep talking about investing lump sums in Mutual funds. In real life Im yet to meet a person who has 1 crore rupee upfront to make such a 'opportunity cost' investment as you describe it. If you don't have 1 crore to buy a home, you don't have 1 crore for that MF investment either. How do you plan to raise that 1 crore? Through debt? Selling jewelry? How? Now please don't tell me you will raise your 1 crore for Mutual fund investment through a SIP. People here keep telling it will take some 30 years to pay that 1 crore loan. By that rate, say you work hard beyond belief. You will still need some thing like 25 years to invest 1 crore in a MF. That is if you are that disciplined, in this era and age. The number of people with that kind of a discipline on forums like these are less a percent.[/FONT]
With warm regards,
Team IREF
https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/13876-real-estate-bubble-set-to-burst-again-in-india
Posted by: TruthSeeker1
On: July 3 2017 03:13 PM
[QUOTE=Que Sera;n2529418] 20 lakh pa is 7500 per day for a five day week. 20% net margins yield 4 lacs pa or 33,333 per month[/QUOTE] They will not comply with GST even in our wildest dream.... they will just procure in cash.. do business in cash... the end... evasion will skyrocket ... most service providers have to now pay 18% so we can be sure billless services will skyrocket they don't give damn about input credit..... a barber will forgo the input credit on his shaving cream and scissors and continue to give you GST rahit haircuts and shaves at affordable price..... lol
With warm regards,
Team IREF
https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/13876-real-estate-bubble-set-to-burst-again-in-india
Posted by: polo1234
On: July 3 2017 03:20 PM
[QUOTE=humblefool;n2529333] [FONT=trebuchet ms, helvetica, sans-serif]Buy plot early in the economic cycle, spend money to build a 3 storey building, Say even a 4 storey building. Cost of building 1 crore. Plot price is largely sunk expense buy now. In Sahakaranagar this building is now worth 2 crore. Lets take your rent. 20,000 per month, per floor. 80,000 for 4 floors. 9,60,000 per year. 9 crore, 60 lacs over 10 years. By now even if the property was built on loan, inflation has eating the loan big time. And in 10 years property price has appreciated. Very likely 3.5 - 4 crores by 2028. The owner has long recovered his investment and is enjoying rent income on top of property price appreciation. The guy who was renting paid for the owners investment, and now hasn't even a brick to show for. The owner has very likely used the returns to seed further investments. Where more gullible renters are paying for his investments. NEVER EVER RENT, on very long periods of time.[/FONT][/QUOTE] Bhai maths to correct karlo Rent over 10 years is 96 lakh not 9 cr 60 lakh .You have just about recovered your cost of construction in 10 years . Forget the plot cost And this is when you are assuming that all your floors will be rented for all the period , no vacancy, no maintenance expense , no brokerage expense , no income tax nothing .. Frankly , Rental is the worst form of capital deployment in India . if you still believe in renting buy commercial. The rental yields are at least respectable there
With warm regards,
Team IREF
https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/13876-real-estate-bubble-set-to-burst-again-in-india
Posted by: VibhorD
On: July 3 2017 04:24 PM
[QUOTE=humblefool;n2529445] [FONT=trebuchet ms, helvetica, sans-serif]Did you even read the comment before that one or, you have already made up your mind on this? I clearly mentioned that house needs to be built on a land purchased way earlier. Which means your cost dropped by 50% right there. You take a loan, which is deprecating at the rate of inflation. On top of this property price appreciates and you make rent. Plus you save on taxes when it comes to taking a loan. If you still can't understand from where you make money here, real estate investments are not for you. Stick to your mutual funds. Plus this really makes me curious. People here keep talking about investing lump sums in Mutual funds. In real life Im yet to meet a person who has 1 crore rupee upfront to make such a 'opportunity cost' investment as you describe it. If you don't have 1 crore to buy a home, you don't have 1 crore for that MF investment either. How do you plan to raise that 1 crore? Through debt? Selling jewelry? How? Now please don't tell me you will raise your 1 crore for Mutual fund investment through a SIP. People here keep telling it will take some 30 years to pay that 1 crore loan. By that rate, say you work hard beyond belief. You will still need some thing like 25 years to invest 1 crore in a MF. That is if you are that disciplined, in this era and age. The number of people with that kind of a discipline on forums like these are less a percent.[/FONT][/QUOTE] Land purchased in past doesn't mean you will value it at purchase value at the time of construction. You will value it at the market value at the time of construction, because if you sell it instead of constructing it, you will sell it at market value and not purchase value.
With warm regards,
Team IREF
https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/13876-real-estate-bubble-set-to-burst-again-in-india
Posted by: Ranger
On: July 3 2017 06:14 PM
[QUOTE=humblefool;n2529333] [FONT=trebuchet ms, helvetica, sans-serif]Buy plot early in the economic cycle, spend money to build a 3 storey building, Say even a 4 storey building. Cost of building 1 crore. Plot price is largely sunk expense buy now. In Sahakaranagar this building is now worth 2 crore. Lets take your rent. 20,000 per month, per floor. 80,000 for 4 floors. 9,60,000 per year. 9 crore, 60 lacs over 10 years. By now even if the property was built on loan, inflation has eating the loan big time. And in 10 years property price has appreciated. Very likely 3.5 - 4 crores by 2028. The owner has long recovered his investment and is enjoying rent income on top of property price appreciation. The guy who was renting paid for the owners investment, and now hasn't even a brick to show for. The owner has very likely used the returns to seed further investments. Where more gullible renters are paying for his investments. NEVER EVER RENT, on very long periods of time.[/FONT][/QUOTE] They way you have written 80,000 * 4 clearly shows you've never built anything to be given out for rent & has never dealt with tenants as well. If a person is paying 20K rent for the ground floor, do you think you'll find a tenant who will pay the same rent to stay in 4th floor? Please indulge this forum and provide the dates/plots/rates you've invested in?
With warm regards,
Team IREF
https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/13876-real-estate-bubble-set-to-burst-again-in-india
Posted by: southsea
On: July 3 2017 09:32 PM
>20 lakh pa is 7500 per day for a five day week. 20% net margins yield 4 lacs pa or 33,333 per month No way the small retailers will be able to afford their own IT infrastructure for GST. More likely that someone like Tally will offer web-based solutions for a small fee every month for such retailers.
With warm regards,
Team IREF
https://www.indianrealestateforum.com/forum/city-forums/ncr-real-estate/gurgaon-real-estate/13876-real-estate-bubble-set-to-burst-again-in-india
Posted by: stocksurgeon
On: July 3 2017 11:09 PM
[QUOTE=humblefool;n2529371] [FONT=trebuchet ms, helvetica, sans-serif]Not sure what your point is, calculated risks pay really well. And yeah, there are hassles to everything. Getting a entry level job requires 22 years of studies, investments in time, slogging and all that. [/FONT][/QUOTE] 1. German real estate (strongest and well doing economy of EU) [B]- is FLAT FOR 30 years- [/B][URL="http://morganfoundation.org.nz/german-house-prices-flat/"]http://morganfoundation.org.nz/germa...e-prices-flat/[/URL] 2. Japanese real estate is [B]falling since 1980. [/B]Please note that Tokyo is most densely populated city in the world. People sleep in literal Matchboxes. It is highly developed rich country. Ever traveled in Metro in Japan- the faces are literally sticking to glass door- no space at all! 3. Real estate in India has been g[B]oing up (with minor corrections) for past 30 yrs[/B]. Now our [B]prices are at par with the developed world.[/B] - [B]PAST MAY NOT REPEAT. [/B]Most well educated people extra-polate past 20-30 yrs data and predict the future based on past data- that is most logical approach to do. However, in real world, the future is pretty different and un-predictable by the best of the brains. 4.[B] PEOPLE are not getting jobs despite 22 yrs of study and hard-work.[/B] Engineers are driving Uber cars- both in USA and India- there was no point of studying and graduating to get a drivers license- The future is different, my dear! My two cents!
With warm regards,
Team IREF
With warm regards,
Team IREF
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