A short journey to the USA in 1994 was not only a great break from work but today when I look back, it has proved to be a great learning experience and with me benefiting!
While visiting relatives there, my uncle and I were discussing the concept of time-sharing investment in real estate and pre-leased properties. You get to earn monthly returns apart from getting a few days to stay at the property per year while awaiting a decent capital appreciation.
On my return to Mumbai, I spoke to my family and suggested we invest in a holiday home in Pune. Couple of trips back and forth and presto we were the owners of a townhouse in a silent, peaceful, and green zone of Koregaon Park, Pune. In those years, Pune was recommended as a go-to place for a holiday and was also a retirement paradise.
We used to come and stay for a couple of days often during the years. In 1998, Pune as a city was slow compared to Mumbai and we were used to working long hours in Mumbai. We got busier with work and tried to monetize our investment property by trying to rent it out. However, we were too choosy and instead thought of selling the townhome but there was hardly any capital appreciation on our investment so we held on to it. Come 2003, Pune was changing from a Tier 3 to a Tier 2 city. In 2005, we decided to make the move from Mumbai to Pune. Our investment property became our new office space.
In 2008, a bridge was constructed in the city which added to better infrastructure in Pune and thus property rates shot up, ours did too! Now, we have capital appreciation on our investment with the city developing.
Question is what if I had sold at no capital appreciation?
Gratitude. Thankful, I did not.
What is the learning here?
Every bit of infrastructure adds value to Real Estate that is built around it. I believe that for real estate investing, a developing city with less infrastructure is a great bet. You can expect super capital appreciation as urbanization with better infrastructure will definitely take place.
In my story, if I had decided to rent, after some due-diligence, I could have monetized my asset but I chose not to. Luckily, infrastructure which was at a slow pace is still catching up and growing in Pune thus adding to capital appreciation of real estate.
Patience definitely pays! Real estate investing is a game of patience. One needs to be lucky apart from taking an informed decision. One requires a realtor who understands the city, its infrastructure and paperwork. A realtor connects you with good property lawyers, bank financiers, if required, and handholds you throughout the process till the possession is complete peacefully.
Over the years, I have learnt a lot by visiting lawyers and understanding the paperwork needed for property dealings. In 2014 I started off as a Real Estate Consultant armed with all the knowledge I acquired in the process. I have observed every disruption since 1992 and Real estate has not tanked. It does not correct neither does it goes up. The rates moreover remain stagnant. Even today if you were to sell a property, you could be selling with some discount (Loss in Profit) if you cannot wait. Although, some properties sell almost overnight.
There are many ways in which one can invest their capital. There are opportunities for big investments but also for small ones to begin with. I highly recommend Fractional Investing in commercial real estate with as low as 25 – 30 Lakhs that will give a good ROI and can be held for some appreciation of the asset.
With quite a vast experience, I am happy to be in this field as I believe not in SELLING you a property but assisting you in making the right BUY decision. I am a catalyst, taking your intention to invest to a decision to invest! I know there are negatives in every city but I ensure you see the positive changes happening to infrastructure development in India that makes investment in real estate in India ideal.
Are you ready to keep patience in real estate investing?
Life Inspiration Advisory LLP
Disclaimer: The views expressed in this article are the opinion of the author and should not be construed as a promotion.