Is it true that real estate will only go up and up?
Answers:
I have been in Real Estate here in Texas for 29 years.
Back in the late 1980's and the early 1990's our oil industry almost shut down, our banks and savings & loans went broke (the US government came in and tried to help).. Texas real estate crashed.
My brother bought a house for 120,000 and two years later sold it for 100,000 and paid the difference on credit cards. Some people had their homes foreclosed on because no one would refinance a balloon note since they owed much more than they were worth.
Still, by 1995 all the values had recovered, so over the long term your lawyer is right. People have to live somewhere- and as long as their is an increase in population in your area and job growth there should be an increase in value.
I would be particular about which properties to buy so that you get as much increase as possible.
Yes and no. Real estate is one of the most likely assets to retain some value, and if bought at the right price will increase in value. However, it is very illiquid compared to paper assets. Further, you need to look at the internal rate of return or net present value, not just if it will go up. It may double in value, but if it takes 20 years to do so, you could actually do much better with historical returns for US stocks
Mostly, real estate goes up, but there are places and times where it goes down. It is not a risk-free investment. But to buy what you can afford is sound policy.
Like so many things involving money and investment,real estate doesn't have a simple yes or no answer. Just like the stock market,if it is having a period of rapid growth and a lot of money being made,especially by the small investor,you can be sure that there will come a time when it will drop,and not just a little or for a short while. Sure there is lots of money to be made,but,especially for the casual investor,things can change quickly. If you are willing to hold on through a downturn or sell,if you are lucky,at the right time or close to it,sure you will probably make some money,maybe a lot. But just don't think it is real easy and it may be a lot harder than your lawyer told you. Is he trying to sell you something or perhaps has a hot tip about something for sale?
Real Estate : Bhiwadi Rajasthan
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Hi All,
The focus for this mail is a place called Bhiwadi in Rajasthan.
Highlights
1) The only place in Rajasthan that falls in NCR Region
2) Around 20 Developers in the area developing Flats, Malls, townships
3) Omaxe the only big developer in this area
4) Loads of small developers
5) Hero Honda coming with a 650 acre assembly line for small cars in bhiwadi with a capacity of 100,000 cars per annum
6) around 60 ancillary manufacturers in line for the small car plant
7) Distance from IFFCO Chowk approx. 50 Kilometers
Current Situation
1) Oversupply as 20 odd developers are selling flats, villas and townships
2) Draw back of Tolls (two of them)
3) The Alwar Road is not yet broadened and would take time to get to a 6-8 lane
4) Rates of approx. 4000-4500 rupees per yard for plots
5) Rates of approx. 1300-1500 rupees per sq. feet for flats
Expectation
1) Lowest rates in NCR for plots and flats
2) Oversupply situation to continue till a two years
3) One can enter after a year and get decent returns. Faster appreciation as compared to Neemrana.
4) Go and visit the site if you can before taking any decision
The views expressed are the personal opinion of the author and should not be used to make investment/ monetary/ financial and other decisions.
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