r2i forum

Have browsed many threads in this forum and a few others, and do believe in diversification. Understand the principles but do not have the right implementation.

With the growth potential of the Indian real estate (in the current economy), do not find a strong reason to convince spouse to diversify, specially into an investment with comparative growth potential and advantages.

90% of our networth in Indian real estate (Land).
Stock market swings, account shows only a nominal growth.
Fixed Deposits: worried about inflation.

Find our current AAP to be risky with all assets in one corner of the world, though the investment is frequently watched by friends/relatives.

Each time, it comes to, lets keep the money in liquid investments, there comes yet another real estate opportunity, and we are into the X+1 syndrome.

Understand real estate is illiquid, historically only inflation-adjusted returns, risk associated with protection of the land, but then there is the stock market high swings, cash is not the right way, and so on.

Any convincing pointers please to invest in the stock market (USA/India/Global), NCD, FI, and other liquid investments and reap similar to real estate rewards?

Have come up with one reason why not just real estate (land) but other assets:

Apart from the well known diversification, the need for income producing assets requires investment in FDs, dividend stocks or other liquid assets.
(unless one has the option to sell a portion of the land and live out of the proceedings for a while :))

If you had already invested in RealEstate in India such as Land/Apartment, then you don't need any AAP:-) as RealEstate appreciated a lot and will continue to appreciate in future (May be slowly) due to the following factors:

- Huge Population especially concentrated in Metros and Top 10 cities where Demand/Supply is completely tuned to Demand side. The supply(availability of land/apartment) is very limited compared to the population (demand) and hence it's gone up by more than 200 to 300% in the last 8 years.

- There is so much black money in real estate where the tax transactions are low which leads to huge corruption where our bad folks are very good in handling.

- The so-called 8% growth which benefits only a few but makes other lives miserable plays a great role as everyone wants to invest only in real estate and gold.

Finally, I am not happy personally to invest in real estate as I am stealing the liveliness of deserving middle/poor people's life.

#3, yes, the appreciation has been good in certain locations but mediocre elsewhere.

When the prices go north, true, it seems to be the right thing to do, rather than invest the money in a swinging equity or just-for-inflation CD.

The fear is in investing in one country, one State, one currency, one asset class.

But seems like real estate is an addiction, once you get hooked, it is difficult to look elsewhere; even if you do for a short while, then change your mind.

Have discussed this with my spouse many times, but never have been able to provide a strong alternative, other than theories of AAP. Have had a little success, but %age of allocation is the concern.

I just recently returned from India, there is so much pressure from friends and relatives to buy real estate in India. People in India have gone mad after real estate.

The arguements for real estate appreciation in India are fair. India has a massive population and most of the people even as we speak are piling on top of each other every day in a living space not exceeding 500 sq ft. So clearly there is demand.

But real estate to me is a different kind of beast which when turns around does so with a lot of venom and crushes all fundamental theories. It is unlike stocks which go down and then quickly rise up. Real estate when it rises, rises for a long time and when it falls, it takes time and tide with it.

I say this because even the most densely populated and more importantly highly desired markets like Hong Kong, Tokyo, Bangkok, London, Manhattan have seen super sharp down-drafts which have stolen the shirts and pants of many an investor and speculators. I can say the same thing about the san francisco bay area, clearly one of the most desired geographies in the world which is currently reeling from a crash. During the boom time the arugements were many like 1)Best weather 2) Everyone wants to live in this area 3) Silicon Valley 4) Great educated work force blah blah blah blah. I know enough people who lost their shirts and other parts of their clothing chasing gold in this golden state. All that said, I am not saying that a crash is imminent in India's real estate market. I say this because I dont know and nor do i have the expertise to say it. But is it a possibility, I think it is. How, when and by how much, who knows! If you think you can multiply your buck by investing in India's RE market, go for it!

suyog;408306I just recently returned from India, there is so much pressure from friends and relatives to buy real estate in India. People in India have gone mad after real estate.

Yep.. Even the farm lands are now converted into real estates.. Everyone has become brokers, sub-brokers, sub-sub-brokers.. Just the % of commission gets shared with so many people.. So lot of folks are into it.

Madness everywhere.. only government office which is extremely busy is the registrar office. Everyone is working hard there because end of the day they get their share along with monthly salary. No exception there.

I didn't carry my ID card (Ration card, India driving license, passport) but I was able to sign the papers showing my US driving license. Can you believe that ? Because end of the day, they just wanted to get the deal done somehow.

If you say anything - oh, I forgot this, forgot that -- they will say, no problem sir.. there is a workaround. Amazing quick-fix workarounds

They are not only mad but they even went to the extend of calling me stupid and dumb for not investing in India real estate in the past and told me to invest all of my life savings in India real estate immediately!

#5, #8, whether right or wrong, you must find yourself lucky to have such relatives. Some of ours would like to enjoy a piece of it or let it scatter rather than have it invested in our name.
Few such experiences in the past, now we have learnt a lesson!

I believe one should complete cycle of real estate investment to understand whether gains projected by relatives/close friend are true. Let me share my experience. In our family, 3 of us had bought around 10 properties in last 10 years (flats, Sites, Agri land etc..). All these properties are at prime location with leading builders that too in Bangalore.

For personal reasons, all of us wanted to sell our properties. In 3 years, we could only sell one asset. We get lot of foot falls even today but some how deal wont' happen even with our utmost flexible terms and decent discount.

I know that it is hard to sell but not preared for 1 out of 10 deal in 3 years. Frankly, I am convinced that these investments would not come to your rescue when you are in need. From then on, I had become of wary of these RE investment and never went back to the same.