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    EXPERT ANSWERS SERIES - DAY 2 | Is it a good time to buy an apartment? [20th May 2020]

    EXPERT ANSWERS SERIES - DAY 2 | Is it a good time to buy an apartment? [20th May 2020]

    ParentCircle presents an exclusive Expert Answers 3-Day Series on Financial Planning during Uncertain Times. Post your queries anytime before 1:00 PM on 18th May. Our expert, Certified Financial Planner, Dr. A. V. Senthil will answer all questions by 5:00 PM on the same day. You may choose to post your questions anonymously too.

    Team
    • 11
    • 3
    • Tue, May 19, 2020, 10:50 AM

    Comments

    Team 355 days ago

    Thanks Dr. What are your thoughts on investing in a new apartment or property now or in the next few months?

    Team 355 days ago

    @Team Dear Anonymous Real Estate Investments are emotional investments whether it is an apartment or villa, when you are adding to your CORE or HOLDING portfolio. Here the focus will be aesthetics, family priorities, status, locational advantages, proximity to school, college, community living etc. Here Price will be one of the factors. If it is part of the Satellite or Trading portfolio, and the objective is to generate returns, then you may look at Price & Price Appreciation as the key factors. In the next few months if you are getting an awesome deal and you are having money in the bank, my suggestion would be to buy. Borrowing and investing in Real Estate may not be a wise option, unless you are guaranteed of price appreciation in the near term, say 3 to 5 years. Happy Investing!

    Team 356 days ago

    A question from Mr. Narayanan Sethurao: post covid19, apartments prices are set to go down ...can we opt for 1. bargain/negotiate price on existing unsold villas/flats.? 2. go for secondhand /resale flats in vantage locations quite old .but convenient due to infrastructure /utilities available.?

    Team 355 days ago

    @Team Good afternoon Narayanan Sethurao Nice questions! If it is from a reputed builder (or) developer, the probability of discount is going to be single digits for unsold villas and flats, as they would be incurring interest costs for the lock down period. Bargaining / negotiating prices for properties where the capital appreciation is guaranteed is a good strategy. Second hand properties at vantage locations is also recommended. Suggest to check the quality of construction and the proportion of land cost. Typically for resale property the land cost shall be at full price, whereas the construction cost will be reduced based on the age of the apartment. The life of an apartment is anywhere between 40 years and 60 years, depending upon factors like what type of sand was used, whether the property is closer to the sea etc. Buying a flat for Own consumption is much recommended at this time. Buying for Rental Yield may be on hold for few more quarters. Other asset classes like Equities may outperform Real Estate. I have created a good video content on Buying an Apartment. Total watching time is 55 minutes (6 short videos). If you are interested you can call 9841671678 or email cgo@avsenthil.com

    Asha 355 days ago

    We had booked an apartment before lockdown and were paying the installments currently. Due to this outbreak of coronavirus, the construction progress has also slowed down. Are the rates also going to slash? Is it a good time for us to now pay these installments and invest in a new apartment?

    Asha 355 days ago

    @Asha Good afternoon Asha Winfred Three things to be looked at a) What is the end use of the apartment? Own use, Rental, Others (Ex: For Parents) b) What are the tax benefits available? What is the effective tax rate? c) Capital appreciation possibilities in the short, medium long term? If the end use is for Own consumption and the price is attractive, with a good quality construction, suggestion is to for a apartment at this juncture. Investing for rental income is not recommended at this stage, unless interest rate has come down to 6.5% and land values have corrected by 20%. The probabilities are low. Interest rate may come to 7% over next 2 quarters. I have created a good video content on Buying an Apartment. Total watching time is 55 minutes (6 short videos). If you are interested you can call 9841671678 or email cgo@avsenthil.com