A delay in possession lowers your returns on the property

Q: When can I make money in real estate?

Rishi Dev,

14th December 2015

Investment Advice in Mumbai

price appreciation

mumbai real estate

bargain buys

delay eat returns

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So, before go for buying, check the documents. Made sure that all dues to the builder have been paid by the previous owner in case of a resale. If payments to the builder are pending, the price should be adjusted accordingly.

More importantly, early stage development involves significantly higher risks stemming from uncertainty around their permissions, funding, delivery, and often results in delays.

Abhinandsavalla, Mumbai

14th December 2015

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That is what i am telling you that a delay in possession lowers your returns on the property and should be estimated thoroughly before making the investment. First, the opportunity cost of your own funds is high, you might have been better off investing in other asset classes. Second, in the case of borrowed funds, the interest cost can bite you. You will also lose out on the potential rental income.

Hemant, Noida

14th December 2015

Hence, the best course of action while negotiating pre-possession properties is to get a great deal on price and ascertain the impact of delay and your ability to handle it.

Abhinandsavalla, Mumbai

14th December 2015

As per expert, project sales are typically spread out at 18% at the time of launch, 55% during construction and 27% on project completion. It is usually the 18% who make the real killing. But normally, retail buyers looking for a home to live in find investing in such projects premature, given the long delivery timelines.

Hemant, Noida

14th December 2015

Comment

Yes, it is true and builders usually sell a significant portion of the property to early investors to bring in cash early to fund the project construction. Such sales are often at huge discounts with these investors looking to cash in on a resale usually at the pre-launch stage.

sonyarai,

14th December 2015

And with the current slowdown in the real estate market, the need for cash may swift a few investors to sell at a little discount to the existing prices, opening the doors for retail buyers to search for bargain buys.

Hemant, Noida

14th December 2015

If you buy really low, strike a good bargain and get a good deal, or if you are lucky with an investment you never thought would really show double-digit appreciation.

sonyarai,

14th December 2015

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