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Look before you leap
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Weigh the options of investing in property, get your maths right on the returns and duration, says T. Lalith Singh
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– Photo: V. Raju
For a price: The trend is to stretch one’s finances to the maximum to buy a property of one’s liking.
Investing in property has always been prescribed as a wise move. But, perhaps it was never as wiser as it is now. The sudden eruption of real estate on the scene a couple of years ago indeed had many rushing in to scratch the bottoms of personal treasuries, raise money from all possible sources, call in the bank executives and pore through brochures and advertise
ments of different building projects.
The trend initially happened to have taken in with all those vexed with living in rental spaces and in search of a home to call their own, but very recent times have shown a complete metamorphosis.
As prices rose rather dramatically and the potential of quick returns became more obvious, the scramble began. Speculators rushed in to capitalise and the prices kept escalating further.
The options too have multiplied and the kind of investment opportunities in properties are simply too many. From a small two-bedroom flat in a project coming up at places such as Kapra or Dundigal to plushest of duplex at Kondapur or Nizampet to villas that sweep you off your feet with unheard of amenities, one can scout around for a right choice. The budget too matters, but the trend has come to a stage where many appear to be willing to stretch their abilities to invest in a property of their liking. The costs are ranging from Rs.30 lakh plus flat to Rs.2 crore plus villas. So where should a person looking for returns go with his money?
Different logics are forwarded by the industry watchers on what would ultimately turn out to be a good option purely in terms of appreciation and returns.
Work out your math
If one invests big money and acquires a duplex for say Rs.1.25 crore, how much will it appreciate? How long will it take to ensure that the property grows considerably for the investor to look at disposing of and pocketing a neat margin? Since the investment is big, one naturally expects the scope of dividends to be that larger.
Should one go for mid-level properties that come in the Rs.35 lakh to Rs.55 lakh and hope that it comes back as Rs.50 lakh to Rs.70 lakh in few years? An investment of Rs.30 lakh could double in few years but how long will it take for the Rs.1 crore properties to fetch double the amount?
A thorough understanding of the real estate scenario and its potential should be understood is what some builders suggest. Blind rush and unrealistic hopes could get dashed if one does not exercise caution, happens to be the advice.
The input is the most important factor and in the way in which it is generated too. For this, ultimately could end up deciding the benefits accrued from the investment in property.
Land would appreciate in normal course but the growth usually gets decided by the surrounding infrastructure development. So, some builders point out that instead of getting stuck with the kind of investment, one should worry as to where one should head for.
“Location, facilities, amenities and future growth impact and one should go through these with a fine comb before freezing on a property,” says K. Ravinder Reddy of Janapriya Engineers Syndicate. The loan component also plays a crucial role. “If lesser personal money is involved and you raise say 90 per cent home loan, then the overall rate of return will be good,” he points out.
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Property Plus
Bangalore
Chennai
Hyderabad
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Thiruvananthapuram
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