From My Desk
Date	29-Jul-2016
Subject	Myths about Real Esate
Details	Why I am Interested for Real Estate Read the article if you are going for any real estate investment. Let us discuss myths about real estate. Myths no: 1 First of all it is an asset class which will give me superficial return in the years to come at the rate 20% compounded annual growth rate(CAGR) or more. Explanation: It is absolutely wrong to assume and it won’t give you any superficial return in the long run in comparison to other asset class. Example: One of my client invested around 100000/- with the land in 1983-84 and finished his house around 1990-91 with a cost of Rs 800000/- lakhs and now the house with land cost around Rs 1.5cr i.e scheduled price (which is again fixed by the state govt.) because the client is staying with family for last 3 decades he is never going to sell it in anyway using its rent(Rs 15000/pm) as a part of retirement income plus his pension). In the above example, if we calculate the CAGR of investment of around Rs 900000/- (land+Building) for last 25 years and today’s cost is Rs 1.5cr the rate is around 11.90% without considering his stay and rental income from the house as both are regarded as his consumption. Let’s say with a investment of around Rs 1.5cr in any duplex (where land is in your name) can you get the following benefits including his consumption. Rent: Rs 15000/Pm or Rs 180000/-Annum Your Rent: Rs 15000/- Per month (you stay threre) or Rs 180000/-Annum Total : Rs 30000/-pm or Rs 360000/- Investment : More than Rs 1.5cr as the builder is never going to sell you with the schedule price fixed by govt. With an investment of Rs 1.5cr with other asset class, you can generate a income of Rs 6L per year (taxfree) but you miss the feelings/compliments from the family members & friends “You have a very beautiful House” Myths no: 2 We have purchased a particular house with a good bargain in comparison with others. Or the house is available at a discount or loaded with freebies like AC, Geyser, car as prize money e
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