I wish to invest 40 lakhs in Real estate..

POSTED BY Navneet Kesarkar ON April 1, 2013 4:03 pm COMMENTS (4)

I am 36 yr old, salaried and planning to take loan of 32 lakhs for this investment. I do own a house in mumbai and this will be my 2nd property (Pure investment). I am confused between commercial (Shop) & Residential property. what would you suggest?  

4 replies on this article “I wish to invest 40 lakhs in Real estate..”

  1. Dear PdmRgh, can you elaborate your ownrequirement?



  2. jinesh shah says:

    I also had same view of buying a real estate for investment purpose. It is wise descision only if you play your cards well.

    if you are buying it for pure investment. please ask yourself following questions

    1) Income yield from investments ( in mumbai Residential yield will be 3% annualized and 4% annualized max in commercial properties unless you are lucky and manage yield of 7 to 9% annualized)

    2) You plan to take loan of 32 lacs i understand u wanna RE for 40 lacs. You will incur substaitial cost on interest on your home loan( which can be managed depending on your taxability )

    3) RE investments are long term and most of it buy for capital appreciation. I agree that on long term basis its a scarce resource but current market scenario is subdued for atleast 2/3 years.

    RE Value : 40 lacs
    Loan : 32 lacs
    EMI tentative (33000) approx 1000 on lac interest around 10.75%
    Rental ( net of expenses ) 8000 K

    its negative carry of 25000 PM ard 3 lacs PA

    if the same 8 lacs of your contribution invested directly in markets at yield of around 9 to 10% which is not difficult

    it can yield you 7000 PM the same rental which you are going to get buying a real estate)


    1. PdmRgh says:

      Hi Jignesh

      Could you please guide on the considerations when one is going for first property for own use?


  3. Read pros and cons here


    Get your goals listed and make sure you are and can invest for all them adequately before proceeding.

    Personally if I had a own house and intend to live there for rest of my life I will avoid real estate investments. Of course if you have experience in this sort of a thing it is a different matter but still other goals like retirement are top priority

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