[lovlyfella]

A few pointers from me - I am in IT myself and have a keen interest and investments in Real Estate. Dabbled in Stock Market too.

1. If you want to buy an apartment for self-use, you should not look at economics. It is a different use case altogether.
2. A big No to an apartment as an investment/rental. The ROI is just not justified. Also, there are problems galore that come with renting out properties - disputes, maintenance issues etc. etc. Not worth it at all.
3. Stocks/MFs carry certain risk too. Between buying an apartment for rent Vs. investing in MFs/stocks - the latter option is better. You may thinking of index investing in Nifty 50.
4. Another option (and that I prefer the most in Hyderabad context - not sure of your city) is to invest in duly approved plots. They carry low risk and in medium to long term can provide good returns.

[yogishkamath]

Let me give you my personal experience:

I bought my first house at the height of the 2009 recession at throw-away prices.

It has given me a decent RoI, but guess what would have given an even better return: stocks! Infact, if I had just invested my 20% down-payment in the same stocks that I owned at the time - just that would have been worth almost as much as the house - never mind all the EMIs that I paid for a decade thereafter.

Over time, the BSE sensex (and the index funds that track it) are going to keep up with the nominal GDP growth rates while the average apartment is only going to keep up with inflation. Of course, you will have outliers in the real estate market who make outsize returns but you cannot assume that you are going to be an outlier.

Also, beware of taking loans assuming that the interest rate is going to stay at its current low level. It probably isn't. Can you still afford the EMI if it rises to about Rs. 900-1000 per lakh ? (this is closer to the historic norm)

[sunbaj]

Real estate specifically flats (not talking about land) was a good investment in the early 2000. In the early 2000 the Income Tax tracking was not so robust and as such lot of black money was invested in Real Estate which made this investment very lucrative. Also that was the time when this industry had just started and people who invested got good ROI as it was the beginning of this industry.

Now the cost of flats have really gone high and do not expect that level of ROI unless in a very prime location. Now is not the time to invest in flats however if you are looking for personal use then it is a different ball game all together.

Drawbacks of flat as an investment:
1. It is more of a liability than an investment.
2. You need to get rid of the flat at just the right time else you would not make money out of it in majority of the case rathe you would be on loss.
3. You actually block your money and will not be able to get the money out when in need as it is a tedious process.
4. Taking a flat with a loan should not be called as an investment. At least I do not call it investment.
5. Every now and then if you have tenants they would be bugging you for one thing or the other and when you do not have tenants you still end up paying maintenance and other charges. Flat is more like giving rent even after having the ownership.

[SmartCat]

Google "invest in commercial property" India (or cityname). There are lots of companies that offer 'fractional ownership' of commercial real estate. Ticket size will be much smaller (around Rs. 10L) and the entire hassle of finding tenants/managing property is outsourced. Examples:

https://www.propertyshare.in/
https://www.nobroker.in/prophub/comm...roperty-share/
https://yieldasset.com/
https://strataprop.com/

However personally, I have NOT invested in such 'fractional ownership' platform.

[mugen_pinaki27]

I totally agree with @SmartCat. Co-incidentally, I was just browsing through REITs and found them to be a suitable long term investment prospect that can give decent returns. And with an estimated 36 million sq. feet of office space as per IBEF, REITs will see interesting growth.

[vinaydatla]

Originally Posted by sen2693

I am not a financial advisor and take everything I say with a pinch of salt, but do ask yourself these questions as a way of evaluation for your decision -

1. You are buying a 1.1 Cr worth of apartment with a 30 year loan. For 70L, I am assuming the interest to be paid would be around 25-30L. So overall apartment cost would be around 1.4 Cr. So, after 30 years, do you think the value of that apartment/land would be 1.4 Cr + (rate of inflation)? The value has to be more than the aforementioned figure for you to make any gain out of it.
2. I have heard rental yields in India are low, even around 3-5% in some places. You should calculate what is the rental yield in your area. The formula to do so can be found on internet. See if the rental yield makes sense to you for your money or if you can get better returns elsewhere. Also cost of ownership adds up like painting house, regular repairs , maintenance etc. Not everything of these is paid by tenant.

25 years is a long horizon for investing in stock market. Generally, if invested smartly, you can make 12% CAGR on that. But please do your own research on this.

I would second the above comments. Rental property with loan is not a viable option.

As you already have 40 lakhs, add 10 lakhs to it by redeeming some of the existing MFs and take a portfolio management scheme (PMS). You can get to choose the type of portfolio to be invested and equity based investments are quite rewarding. Some schemes have doubled in last 3 years. It is a completely hands off investment and you don’t have to spend any time on it.

[gauravdgr8]

Originally Posted by jigar1791@gmail

Initiating a new thread on the topic aforementioned.

===========================

Solution thought of :
Reduce the current SIP outflow by 50%, to about INR 22,000/-, stop DMAT purchases/share trading, and that leaves me with a livable in-hand savings of about 90,000/-. Out of which, INR 45,000/- will be towards my EMI and that still leaves about 45,000/- in hand to manage other sundrys (calculations are at current fixed component of my CTC, not accounting for either the variable bonus OR the annual increments/hikes from switching over).

.........

Is it wise to go for the plunge? Are my corrections of any sense for us, salaried income folks?

Check out average performing Mutual funds for last 10-20 years. 10 years is 3x and 15-16 years is atleast 10x the principal value. Makes better sense as flat would not appreciate 10x

[anjan_c2007]

Had too much of such experiences investing and disinvesting sometimes thinking that real estate is OK or at other times assuming shares or mutual funds are ok. Real estate appreciates but liquidity at the time of need is a question mark. Can get sold instantly or you have to wait for months or years with no result. Also if kept unoccupied, the devil of encroachment always looms large.

Stock market direct investments and/or through mutual funds offer instant liquidity (only if your company is surviving) but can make you a little or much wealthier or even a pauper. It depends on your sense of timing.

I would advise everyone to buy at least one or a few vintage/classic two wheelers. Because that's where the action is since the past decade. Your investment will never depreciate but multiply irrespective of your sense of timing and so on. These need less maintenance, less parking space and just need to be cranked to life and driven once a week for a few kms. And old car prices are not appreciating as much as old two wheelers. A Lambretta Li 150 Series I (1958-59) quotes for Rs 1L these days. And all the old British bikes sell for nothing less than 3-4 L plus to start with.

Of course, with old two wheelers too there could be liquidity problems. But as we are bhpians, nothing else can substitute the joy of ownership of such a machine.

[LaughingMan]

Information about REITs is something which I learnt from this thread, thanks for sharing.

I am from hyd and I would like to present a few observations of mine on the real estate scenario (farmlands/plots) here (I hope this is applicable to a few more cities/states as well).

From the time COVID has hit us, I have noticed that farmlands and plots have seen a bump in registrations, partly because of lifestyle changes and partly because of a slew of developments announced. Ex: the area between Outer Ring Road and Regional Ring Road has seen an appreciation of 100% or more. The number of farm houses have also seen an exponential rise. These kind of price rises usually happen in waves i.e. once the RRR (Regional Ring Road) plan is out and finalized, prices will flatten out until the next round of developments come into picture

If the situation in your state is similar to the one above I believing tilting investments slightly (60-70%) in favor of Real Estate would be a good choice and ride the wave with enough inputs on hand

This is my point of view and I am happy to stand corrected by other wise people out there.

[Huzi]

At your age, I didn’t have this level of clarity. Nonetheless let’s see. 1)You have a well paying job 2)Soon you will have a new member in the family 3)once your father retires you would become a single income household.
Questions you need to ask yourself: 1)do you want to be under debt for 10-12 years and call a flat as your asset ? 2)do you understand the risks associated with this kind of investment (many things can go wrong) 3)is this the right way for you to build your “kitty” (piggy bank)?
I think asking the right questions to yourself, would serve you well, rather than looking at just standalone numbers.

[anand_lukose]

Disclaimer - Not qualified to provide advice in this topic and hence sharing personal opinion only.

Answers to few questions may be beneficial for you.

In India, can you think of any residential property or market where Financial Institutions own residential property and rent out ? I dont think so.

In India, can you think of any commercial property or market where Financial Institutions own commercial property and rent/lease ? Oh yes a lot !

In the US, Wall Street owns a lot of residential property as well because the rental yield is favorable for their investors. In fact, a lot of stories are running in media where Wall Street firms outbid individual buyers in hot residential properties especially in Florida and Texas in the last year.

If India or any other country had a favorable rental yield, then you would see Financial Institutions owning a lot of residential properties for rental income. Since I do not see that, I am going to assume owning a residential property for pure rental yield is not worth it.

[download2live]

If buying real estate then buy something which has land attached to it. Or stay clear.
Many of my friends which bought apartments in Banglaore are now selling it at same price!!!

Stock markets will provide better returns as long as you are not picking the stocks !!!

Mutual Funds or SIP is the way to go. Or if you do not want the human element in it (The funds perform only as well as the Fund manager) then just buy the index trackers. BSE will be nice but even better will be something which follows S&P 500.

[raaj.bhalla]

My 2 cents based on self learning on investing. My situation is very different from yours and here is what I would want to put forward :

1. Rental yield in India is lowest amongst the major countries (2-3%) and cost of a house is maximum as compared to per capita. Doesn't make sense to buy a house to invest that too on loan. Price appreciation in real estate is nowhere compared to stock market (direct stocks or MFs)

2. Since you soon will have a new member in family, start investing for that goal. Me and my wife have prioritized our kids education over everything else and second comes retirement.

3. As someone mentioned, PMS (portfolio management service) is a good option if you have 50 lakhs to invest. My brother in law has just invested in this and he seems happy.

4. If you are not sure about direct stocks (risk averse or lack of knowledge), try Smallcase, it is run by professionals and you buy a bouquet of stocks based on theme. Fee is much less than mutual funds and you get to reshuffle bouquet on your own or basis their recommendation which is pre decided. I find this very interesting and rewarding. Will go for investing here soon. You can do lumpsum or SIP, both.

5. STAY AWAY FROM TAKING ANY LOAN as far as possible. That is just the best way to mess up personal finance.

6. If you really want to invest in real estate, just use that 40 lakhs and try REITS or fractional ownership like Strata. REITs are regulated by SEBI and fractional ownership firms are registered with RERA.

7. Another good option is mutual funds again but invest in Index mutual funds which have expense ratio of only 0.2% as compared to >1% of direct mutual funds.

8. Buy a commercial property in tier 2 city in a prime location and start getting rentals immediately. Rental yield is more. But do not take loan for this as well. Invest what you have.


Do do your due diligence. But in my honest opinion, taking loan to buy a house for investing doesn't make sense

[charanreddy]

Originally Posted by vinaydatla

As you already have 40 lakhs, add 10 lakhs to it by redeeming some of the existing MFs and take a portfolio management scheme (PMS). You can get to choose the type of portfolio to be invested and equity based investments are quite rewarding. Some schemes have doubled in last 3 years. It is a completely hands off investment and you don’t have to spend any time on it.

Portfolio Management Scheme sounds interesting. I have just crossed the threshold for being eligible for it on my Equity / MF investments. Has some one already used this service? What are the costs / risk factors ? I know it’s regulated but how does it compare to Nifty 50 for example ? Any pointers here to set me in the right direction deeply appreciated .

[sgm]

Originally Posted by charanreddy

Portfolio Management Scheme sounds interesting. I have just crossed the threshold for being eligible for it on my Equity / MF investments. Has some one already used this service? What are the costs / risk factors ? I know it’s regulated but how does it compare to Nifty 50 for example ? Any pointers here to set me in the right direction deeply appreciated .

I'm no way connected to any of the below as I haven't used any PMS. Some of the popular ones that I follow.

https://www.adigitalblogger.com/pms/...-veliyath-pms/ by Porinju

https://truebeacon.com/ by Nikhil Kamath, co founder of Zerodha

https://marcellus.in/

You can also consider "Small Cases" for theme based direct stock market investing. Please note that some of them are fee based.
https://www.smallcase.com/

Small Cap funds are a very good option for excellent returns, provided the risk appetite allows one to subscribe to one
Kotak Small Cap Fund Direct Growth
Axis Small Cap Fund Direct Growth