Honest Acres

My close friend insists to me that he wants to invest in that particular area due to above said development.

Now my answer to that particular question is :

1. What development actually takes place due to IIT ? few restaurants, coaching centre, hostel rooms, few good hotels for professors etc. Instead if it would be airport than development would be great.  Normally what makes a area worthy are railway station, post office, good public parks, a bus stand, a good big school, excellent business market or nearby good industrial estate.
2. Further If IIT is established in particular area then it doesn’t mean that other areas doesn’t have any benefits out of it. Normally students prefer restaurants in the heart of city, instead nearby their Institute.
3. Majority of persons doesn’t want their house nearby a hostel or a college. Normally hostel students have a tendency to create nuisance in nearby area. They are living here without their parents and no fear of social status as know body knows them here. I know when I live in Jaipur for my MBA coaching my engineering friends never miss any wedding in near by area !! 

 Now there are certain other points which needs consideration :

1. There is no guarantee of government projects, years have been passed after declaration of AIIMS in Jodhpur and still only hostel and boundary wall is ready. In between if government changes then there is possibility that new government will try to take that project in city of their choice.
2. I suggest to readers that they should read books of Warren Buffet and Benjamin Graham. Books by these two are really good on investments. Although It is risky for us to suggest the same as after reading this many of you would try share market instead of Real estate!!.

What Benjamin Grahim says, If a particular news of any development is so popular that every body knows benefits, than market prices adjust according to that automatically. It means after a announcement if we purchase a property in Nagore road, than prices are actually inclusive of IIT benefits, we are going to benefit only if purchase the land before declaration of IIT.

 Now instead of taking risk it is better to wait and watch and then look how the area is developing, then whenever things become clearer then go for a investment. You may miss the windfall profits but you are safer now.

We advise risk taking actions only for those clients who are fully in real estate line and real estate is their main business. Further risk should not be more than 10 % of your total portfolio.

 My suggestion to readers is to look for property which is not much in news, but have strong fundamentals. Then keep patience, you may not get lottery benefits you will definitely find much more than your expectations. Fundamentals in real estate are generally: 

1. Wide roads.
2. No back history of disputes in that particular area.
3. Few good houses in that area, if possible then look for houses of Jain, Maheshwari and Agarwal community , houses of such communities increases the value of colony.
4. Better infrastructure like parks, school, market etc.

    Now the main question is how we can find such properties, why majority of investors does not purchase such properties before us. Answer is simple, majority of investments in real estate are done on the recommendation of brokers, and people seldom apply their original thinking. Secondly there are good areas for investments but presently occupied by backward communities, people afraid to go there, they are anyway going to exit that particular area within years and property price rise manifold.

 By this article I did not wish to say that their would be no rise in property price after declaration of IIT in that particular area, what I want to say is that it is not suitable for investment for normal investors with low risk appetite.