[Oxy]

Yesterday I got a call (it smelled like a scam) from Square Yards, which claimed to be the exclusive marketing partners for Godrej Properties.

The guy said he has an investment proposition and asked me to invest in something called the 10-90 plan from Godrej. Basically you book an under construction property by paying 10%, sign the sale agreement with the builder, and then wait for the construction to be over. You don't take a home loan because your intention is to sell off the property immediately after it's completion and Square Yards would help you find a buyer. And they claim finding a buyer would be easy as all their properties are in prime locations apparently.

So for an 80 lakh property, assuming an annual appreciation of 10%, and assuming the property takes 3 years to complete, you invest 8 lakhs now and take home 24 lakhs after selling your unit 3 years down the line.

Details here: https://www.squareyards.com/blog/a-g...properties/amp

The guy claimed Godrej is able to offer something like this because they are sitting on a huge pile of cash of 2500 crores even at this time.

Please beware of such tricks.

[ajmat]

Originally Posted by Oxy

The guy claimed Godrej is able to offer something like this because they are sitting on a huge pile of cash of 2500 crores even at this time.

Please beware of such tricks.

Why would Godrej resort to this with a cash pile like that. They need not bother with RERA and would have the power to buy material at good prices and complete construction well on time and dictate the price.

[Red Liner]

Originally Posted by Oxy

Yesterday I got a call (it smelled like a scam) from Square Yards, which claimed to be the exclusive marketing partners for Godrej Properties.

Nothing new. Every single builder is now offering this kind of scheme to get buyers through the door. Even I received a proposal call like this a few weeks back. Expect these calls to ramp up in the next few months as the US keeps burning itself down and the covid issue keeps India from getting back on track.

Here’s the other thing. The properties listed by Godrej under this scheme are way way off the beaten track. I recently visited the aqua project and...holy lord. I think the only ones who bought themselves in there are people who look at google maps exclusively to buy property.

[shankar.balan]

If you buy property, you’re basically buying it for the next gen’s enjoyment and gain. It is very rare that the buyer of property gets to make a “killing” on it in his/ her lifetime. Unless of course the buyer is a big time speculative investor. And I mean seriously Big Time!

Property is really not such a great investment as it is touted to be. Unless of course it is in PRIME locations and is a bespoke luxe level property, in which case it is very likely to carry a frightful price tag as well.

The Golden rule with property is “location”, “location”, “location”.

I dont mind freely admitting, that I also got carried away on the idiot wave of property investment around 17-18 years ago and believe me, I am currently BURNING with my dumb and dumber property investments. And I absolutely have to make a serious effort to get rid of these and convert them to cash, before I become too old. And I dont have a next gen. So this becomes all the more imperative for me to do, if I am sensible...

To achieve this, I am more than willing to actively seek and humbly accept both help and advice, if any is forthcoming, from the experienced and sensible members of this forum.

[am1m]

Originally Posted by shankar.balan

I dont mind freely admitting, that I also got carried away on the idiot wave of property investment around 17-18 years ago and believe me, I am currently BURNING with my dumb and dumber property investments.

Sincerely, thank you for your honesty!

People like you are rare who will share their 'real' real estate investment stories. I have asked around, and even on the property/real estate thread on this forum, but for every 100 stories of buying property and how great the property value looks on paper after 'x years of appreciation', there is maybe one real account of how much a property actually sold for, what were the taxes and hidden costs, and how long it took to sell when the time came to cash in on the 'investment'.

[2000rpm]

Real estate is a bad investment. Period. (this is for metros)

Imagine you buy a 5 Cr house in a Mumbai highrise. If someone can answer my one question, I will forfeit by first statement.

What will happen 35 years down the line when the building becomes old?

Which builder will want to get into the redevelopment of a property with 1000s of owners without too much additional FSI?
How will such buildings be demolished with crowded Mumbai landscape?
How much land do you own out of this 1 flat out of 1000 flats?

Basically I have no visibility of the investment once the building becomes old. It can theoretically be a write-off!

I would still look at Land as a better investment!

[PatienceWins]

Originally Posted by shankar.balan

I dont mind freely admitting, that I also got carried away on the idiot wave of property investment around 17-18 years ago and believe me, I am currently BURNING with my dumb and dumber property investments. And I absolutely have to make a serious effort to get rid of these and convert them to cash, before I become too old. And I dont have a next gen. So this becomes all the more imperative for me to do, if I am sensible...

Agree with you on property investment. It makes sense only if you are buying a property to stay in it. The rental yield is also very less, and can be in negative if you factor in tax and maintenance. Maintenance is a hassle, especially if you are out of station. Also the hassle of guarding land/ house from encroachment, complaints from locals etc.

Any idea how we can move from property to other investments/ cash without losing heavily on tax? As per the income tax laws I could find online, you have to invest in another property within a stipulated time to save on long term capital gains tax. This does not serve the purpose of selling the property to move out of it. Any suggestion from others would be very helpful.

[pganapathy]

Originally Posted by PatienceWins

Any idea how we can move from property to other investments/ cash without losing heavily on tax? As per the income tax laws I could find online, you have to invest in another property within a stipulated time to save on long term capital gains tax. This does not serve the purpose of selling the property to move out of it. Any suggestion from others would be very helpful.

A CA friend of mine told me a couple of years ago about a government FD you can invest in. Essentially, you have to leave the money in that account for 5 years or something like that, and you get a very low rate of interest. Basically the government gets the difference in interest rate and gets the capital for a couple of years. That is supposed to equate to the tax saving you get. Please check with your CA on this.

[AZT]

Originally Posted by Oxy

So for an 80 lakh property, assuming an annual appreciation of 10%, and assuming the property takes 3 years to complete.

Please beware of such tricks.

Thanks for posting this. The appreciation rate assumption is the biggest red flag

[ValarMorghulis]

Real estate is one area where everyone keeps saying the market is going to crash and burn and prices will come tumbling down but that almost never happens. I was in the market to buy a house (for self not as an investment) since 2014 and everyone kept telling me to wait "just one more year" as the market was due for a correction.
Instead prices kept increasing every year despite the increase in unsold inventory.
Last year I finally took the plunge and got a ready-to-move apartment. It cost a LOT but I'm happy with the purchase.
'On paper', the prices have increased by ~15% in the last one year. Whether I'll get that price if I try to sell my flat is an altogether different story.

tl;dr If you want a home and are getting a good deal, go for it. Double check your finances and if you can, go for it. Timing the market or trying to, either real estate or stock market, isn't advisable.

[PrideRed]

This might be a good time to gamble in real estate. With lower demand, prices might come down in couple of months. However don't expect to become billionaire in short span, but treat it like any other investment. Some properties work out well some don't. Golden rule I always follow is, never put all your investment in one bag and good to have part of your investment in real estate as well.

[kushagra452]

IMO, anyone who have funds ready to purchase a property for self use should be able to strike a good deal. As far as the Delhi real estate market is concerned, post Covid it is not uncommon for dealers and builders to offer 10%-20% off the pre-Covid prices.

Given the uncertainty around Covid, it will be prudent for an individual to go for a ready to move property. Serious buyers who have a cheque ready will be in a position to bargain with agents and builders/developers, who earlier used to quote astronomical prices. One will have to approach their property hunt with a lot of patience and be ready to play the mind games with agents/developers/builders.

[Jaguar]

What are the thoughts on commercial real estate? Say, invest the amount equivalent to a 2-3 bhk in a small shop or two in a shopping complex. I suppose the rental income would be comparatively higher but not sure about other associated risks.

[Saanil]

Originally Posted by PatienceWins

Any idea how we can move from property to other investments/ cash without losing heavily on tax? As per the income tax laws I could find online, you have to invest in another property within a stipulated time to save on long term capital gains tax. This does not serve the purpose of selling the property to move out of it. Any suggestion from others would be very helpful.

In case you do not want to invest in another property, you can buy capital gains exemption bonds issued by government entities (like NHAI, PFC, REC). There will be a lock-in of 5 years though. Please do consult a professional as I am not sure of the current rules and regulations.

Check out this article.

[VKumar]

Please don't mind my word gentlemen, just like the youth who didn't do very well in studies (I did, still like them);and do everything from property dealing to taking govt contracts, I too have quite a bit of experience of the real estate stuff.

It doesn't matter if the market has gone up or not, anyone who shows me a property which is selling for a price lower than what was last year, will get an eclairs. Not getting into numbers, but this starts as a business and then turns into a joy. One would love to own more and more of flats, villas and the best of all - piece of land. What you get in return is:
Rental income + Appreciation

I, for one, love the property stuff - I have cancelled my car plans in past for good ones, and am I not a happy man? Today, if i have to put 50 lac somewhere, I am still fine with a property, get me a low cost 2 BHK - easy to sell and easily goes up on rent of 15-20k depending on location. Due to Covid situation, there are multiple properties in market which are available for a price lesser than what it should be - if you want to make some quick buck, find the:
Right property at right place and right price!

But then, it would have already been bought by someone, who will make money; right in front of you; while you will be still telling how bad an investment a property is. I know of people who carry a Mercedes Benz (Monetary terms) in the boot of their Brezza, looking around for the good ones where they can directly give the token amount, and this is the high time that if one wants to take the risk - just take it.