Saturday 30 November 2013

Value for money in real estate investments. Are you invested in the right one?

"One of the common mistakes we see investors making is going for the builders brand alone and not considering other features like locality, quality of construction and connectivity in choosing projects.", says K Ramachandran our CEO.

How do we define value for money? One can easily calculate time value of money by accounting for future rates of interest. However when choosing a project or a builder, brand should not be the only parameter and the normal Pv calculations do not apply.

The projects we associate with have the best value for money in term of return on investment. Some times we see investors getting locked into projects based on builders brand repute. However they make a blatant mistake of not evaluating connectivity, location and other parameters which can cause a 30% difference in resale value in around 3 to 5 years.

For e.g. take the case of 2 developers one, whose project took 3 years to complete ( a bigger brand) and another which took just 1.5 years (smaller brand). Some times the location and speed of construction can be such a positive factor that 40 Lakhs invested in former project could value it at 55 Lakhs in 4 years while it could be well over 60 Lakhs in the latter one.

Hence investors should carefully consider various factors in making sure you get the maximum value for money on your real estate investments

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