Be A Wise Investor

Be a Wise Investor

Location is important, no it is extremely important but if you are an investor or an end user the parameters to look for are different. Location is just one part of it.

Property buyer can be further divided:

                          Investor                 End User

We will deal them one by one. In this article we will take up only Investor.

Investor in Commercial

While investing in Commercial don’t invest for a short duration. The thumb rule for any commercial’s viability is 1. Visibility and 2. Footfall.

 Visibility depends on the location of the commercial plot. If it is visible on wide road it has good chances of exponential growth in the time to come. However visibility is clubbed with footfall as well. Ultimately it is the retail business that will give push to the prices of the commercial property. Higher the footfall higher is the percentage revenue earned by the commercial site and it spirals the prices of the commercial.

 I would like to explain by an example. The prices of showrooms in Chandigarh of inner markets is much less than the showrooms facing the sector dividing road. The prices of showrooms facing the Madhya Marg are almost double than the prices of showrooms inside the markets. This is related to both visibility and footfall. The inner market showrooms generally cater to that particular sector whereas major road facing showrooms does not have that constraint. However, the case of brands is different, they have their own pull.  

Hence while investing in a commercial property keep these things in mind:

  1. Stay invested for a long-time horizon 2. Visibility of both commercial site and the unit that you are investing in. 3. Residential area in the vicinity. If the site has high rise apartments near it, all the better. 4.Open car parking (Not basement car parking).  The site having big open car parking space is better. Example a middle block in the internal market of Sector 35 D Chandigarh has more space compared to other blocks as it has Showrooms on one side and booths to the other. The units around it has maximum footfall.

Practical scenario: as the density of sectors has increased and foot fall from other cities like Patiala, Sangrur, Ambala, Ludhiana, Ropar, Nawashahar, Gobindgarh has increased due to business, education or because of International Airport the demand of commercial has also increased Although due to online portals certain segments like clothes, shoes has taken a hit but still there will be strong demand of retail commercial and office spaces. Good commercial properties with all the points keeping in mind are HLP Galleria, District One, Jubilee Junction. Their individual strengths and weaknesses will be discussed soon.

Investor in Residential

The price of commercial is an entry barrier for most of the investors. They generally park their money in residential plots/flats.

We will take both Plots and Flats separately.

                         Investing in plots:

If you are a pure investor don’t invest in a bigger plot. Actually, we are mapping Demand and Supply. Supply of small plots is quite high and so is the demand. Generally small plots are not given a good place in the layout, they are side-lined. Don’t put your money in already inhabited sector as the prices have already seen revision. Generally, first three buyers in a plot are investors, after this comes the end user.

Hence while investing in a Plot property keep these things in mind:

  1. In fresh booking case invest only till you can make quick buck or else stay invested till minimum 2 years after possession. After 3 years as per GMADA, PDA, etc; you will have to construct minimum 25% of the plot which is sheer wastage. Move out if you are making around 10-15% profit year on year basis. For plots by Government agencies/departments like GMADA, Patiala Development Authority, Improvement trusts etc I shall be writing separately as exit plan for them is quite different.
  2. Location is important in residential plots as well. First of all location of Sector should be such that inhabitation has reached within a diameter of 1 Km. Now let’s talk about the location of the plot. The premium locations like Park facing, wide road facing or corner plots come expensive but also fetch better profits as supply of such plots is less. If across the road are also plots of same size as yours (i.e. plots up to 300 Syds.) go for wide road or Park facing as it will not lead to parking chaos. But choose a plot which is only East, North or North East facing as most of the developers including GMADA does not charge direction premium related charges. These are easily saleable as people are increasingly Vaastu conscious these days. If you are buying a small plot and facing your chosen plot is a block of bigger plots it is good investment but vice versa is also true. Let me explain it with an example. Suppose you have chosen a plot of size 200 Syds and facing your plot is a block of 300 Syd plots it’s a good investment for you but not for somebody who is buying a 300 Syd plot in the same block.

Practical scenario: IT City will see further growth but percentage appreciation will be less as number of buyers beyond 30000/- per Syd shrink up to 80% (a rough estimate). The Aerocity has almost reached pinnacle further only meagre appreciation will happen in near future. The better sectors for investors are 97,99, 105,106,107,108,109. Emaar sectors are better as their planning is much better.

Leave a Reply

Your email address will not be published. Required fields are marked *