Last few months have witnessed phenomenal returns on real estate in Delhi and NCR and whole of India. Though currently Gurgaon is slowing down, with prices having come down by 20% in certain cases ... still there is bullishness with caution. However, seemingly money is moving to Dwarka from Gurgaon.
With opening of Delhi metro line to Secretariat and Connaught Place almost a certainty, Connaught place has seen jump of 20 to 40% in capital and rental values. Inner circle showroom space rents at unheard Rs. 450 to 500/- per Sq. Ft., with showrooms space is in scarce supply. This positive sentiment due to Metro opening is pushing up demand in Dwarka and prices.
Where does one invest? Put in his money?
Answer to this is not easy. But it is still possible to find investment opportunities. Read on to know more.
To identify parameters for safe investment were difficult. Finally it boiled down to the question... if I invest my money in Real Estate anywhere, will a possible crash or bearish sentiment in Real Estate erode my real estate investment?
This meant, buying property at prices which in equity market parlance is called "value buy". Rock bottom prices. Choice was between a developed property or land. Developed property has the advantage of finding a tenant so as some return on investment is there. But then, in developed property, you pay for the developer's profit. Bearish sentiment can erode values in such investments considerably.
Land seemed to be safer. But what about a recurring return - monthly or annual from the land? This set me on to the exercise that if I had 1 (one) Crore rupees, then what shall I do?
This quest led me out of of Delhi and finally, in Rajasthan, within 100 Kms from International airport, I located large tracts of fertile agricultural land with sweet water in the range of Rs. 2 to 3 Lakhs per acre (including acquisition cost of stamp duty plus brokerage). Undulating land, with few hills around, lake etc.
It is possible that the land prices will not appreciate so quickly and the holding may exceed few years. Could I then earn recurring revenues? Answer was a simple and emphatic Yes. Investigation showed that multiple sources of revenue are possible.
Simplest is leasing the land for one year to the local farmer who pays you either in kind or cash. About 6-8 % annual return on the investment is possible. Fear here is that such lease creates a right for the farmer. But this is not true. Each third year, a new farmer can be found and land leased to. This is not difficult, and is done quite often.
Even better returns are possible, if herbal farming is done. Safed Muesli shows tremendous potential though there are negative reports that it did not work for the few who tried. But there are many, for whom it has worked. When properly done and marketed, it can generate upto Rs. 2 Lakhs per acre of profit in one year. Profits from first year itself possible.
Another possibility is growing the bio-diesel plantation. As per Govt. notification, in few years time it will become mandatory for a 5% mix of bio-diesel with diesel. Yes ... the bio-diesel is in short supply. Consistent revenues of Rs. 15 to Rs. 35 thousand per acre per year with minimal caretaking.
Then many other possibilities ... growing carnations, poultry, exotic vegetables, open a resort, conference center etc. Rajasthan govt. fairly co-operative on this.
Finally, the big bang is possible. Expansion of urban areas can push up dramatically the land valuations. In any case, large tracts of land give a high level of well being factor to oneself and the family.
http://www.swagatamindia.com Sheikh Pervez Hameed is a realtor since 1989, has ground knowledge of the real estate market of Delhi and its surroundings
Article Source: http://EzineArticles.com/?expert=Sheikh_Pervez_Hameed
By Sheikh Pervez Hameed
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