Call Us - 91 33 4020 4020  
Sign In  I  Sitemap   
AxiomEstates - India Real Estate
     India Properties Worldwide
Axiom Banner
Bookmark and Share
E-mail Print Tell A Friend

Residential Properties

Indian Real Estate News : Bangalore
InvestorSpeak: How to start investing in real estate
Source: The Times of India Nov 26, 2013
Starting investment in the real estate is the first step towards financial independence. Typically, people get a job between the age group of 21 to 25 - the earlier you get a job the better. The city where you start the career is also very important. For example, if you start in a city like Delhi, you end up buying a car as your first high ticket purchase, but if you are in a city like Mumbai, where the public transport is good and the city is much safer, you will most likely end up buying a house as your first big ticket spend.

Your first big transaction is very important as it has the potential to push you three to four years ahead as compared to your peers. So, the first rule of investing, especially in real estate, is to start saving and only spend on basic necessity or continue your student-type lifestyle till the time you buy your house.

Apart from saving in, another important thing for first time investor is stretch. Use your entire savings as the down payment for your house and take the maximum amount of home loan available. Since you are young, it is more likely that your salary will grow and the stretched EMI, which you are paying now, will become a cake walk for you in the next couple of years.

Another important aspect for a first time investor is the ability to identify the right property and micro-market within a city. Since you have a limited budget, there is a high possibility that your budget will only allow a limited area where you can invest. You have to identify the right area and the ideal developer for your investment. Do a thorough research by reading relevant articles on that area, take the help of local brokers, reach out to your friends and family and use property sites extensively to close in on your project.

I have an experience to share. My friend Ravi and some of his friends started their career in the year 2000. After four to five years they invested in Mumbai. Their earning was also very similar but since Ravi led a frugal life he was able to save around Rs seven to eight lakh as compared to his friend who saved Rs three to four lakh each.

Since Ravi had a higher saving amount, he managed to leverage his salary to the fullest by taking a stretched loan of Rs 28 lakh and bought an apartment worth Rs 35 lakh. On the other hand, his friend bought a flat in the range of Rs 22 lakh, with loan component of Rs 19 lakh. After 7-8 years, both got over five times returns but since Raviís ticket size was higher, he managed to get almost Rs 70 lakh more who than his friend. The earned money was further invested and his portfolio is now much higher than his friend. With extra savings and a higher EMI of about Rs 9,000 more than his friend, Ravi managed to create a far bigger asset for himself.

 Leave your comments

Citywise News
    All India
    Delhi NCR
    Other Cities
News Category
    Home Loans
    Tax and Legal