Last weekend, we visited a proposed construction site near Panvel. They have just done Bhoomi Pujan and the plans are getting a final sanction. The location is amidst good population but the area is not developed. With Airport coming near by, this is right to invest there. Once we have the final design, we will make a decision. We are likely to invest. One of the friend is also referring a Project in the outskirts of Pune. Let's see.
If I do go ahead, the surplus cash will be absorbed. We are close to opening the Loan Against Securities account with ICICI Bank so fund should not be a problem. However, with IPO Investment returns turning out so low, I am not sure if it would continue making sense.
Today, we exited from MRO Tek & Manugraph & bought more of IFCI, Aditya Birla Chemicals, Shriram Transport & entered in 3I Infotech.
Happy New Years to All.
Regards, Rohit
Showing posts with label Real Estate. Show all posts
Showing posts with label Real Estate. Show all posts
Friday, December 31, 2010
Wednesday, June 23, 2010
Investments Update
Few weeks before I decided to cut down on my monthly SIP in MF and direct that to Direct Equity instead. I still continue 1 SIP in HDFC Equity though. I picked up Aditya Birla Chemicals, JBF Industries, MRO Tek, Manugrah Industries, Micro Tech, Mind Tree, Precison Pipes & Reliance Communications. Big Shopping, huh !
Review of my portfolio performance shows that Direct Investments are earning a far higher rate of return than the one in MF. Now, this is not a new discovery though the Direct Investment ideally requires a quality time to research & understand what you are getting into.
In the time to come, I would focus on reducing the number of scripts I have in my Direct Equity Portfolio - currently at 13. Somehow, I am psychologically attracted to scripts which have low MRP :) I am consciously looking at scripts in the sub 100 Region so its mentally easier to build position. That's how most of the scripts mentioned above have found a place in my portfolio.
Review of our family's Asset Class, net of all liability shows that I continue to have an overall asset imbalance, primarily due to inflated real estate in Mumbai. Here is how it looks:
78% Real Estate
8% Equity
14% Cash or Equivalent
There is nothing much I can do in the short term. I hope to avoid additional real estate investment, keep diverting my savings to Equity & Debt and get a proper balance, eventually. But why is it not possible to correct this imbalance? Well, the real estate pie (net of loan value) comprises of the only property we have so we can't liquidate. It has grown significantly in last 4 years though its more like a paper profit as one always needs at least one house to live.
Why am I sitting on cash? Hum.... As I mentioned, I do not have time required to make a quality investment. I am pondering over some of the real estate investment options if I should increase the imbalance and go ahead. On the other hand, there is always 'I want to be on my own' thoughts though I am miles away. Let me post separately on this.
Regards, Rohit
Review of my portfolio performance shows that Direct Investments are earning a far higher rate of return than the one in MF. Now, this is not a new discovery though the Direct Investment ideally requires a quality time to research & understand what you are getting into.
In the time to come, I would focus on reducing the number of scripts I have in my Direct Equity Portfolio - currently at 13. Somehow, I am psychologically attracted to scripts which have low MRP :) I am consciously looking at scripts in the sub 100 Region so its mentally easier to build position. That's how most of the scripts mentioned above have found a place in my portfolio.
Review of our family's Asset Class, net of all liability shows that I continue to have an overall asset imbalance, primarily due to inflated real estate in Mumbai. Here is how it looks:
78% Real Estate
8% Equity
14% Cash or Equivalent
There is nothing much I can do in the short term. I hope to avoid additional real estate investment, keep diverting my savings to Equity & Debt and get a proper balance, eventually. But why is it not possible to correct this imbalance? Well, the real estate pie (net of loan value) comprises of the only property we have so we can't liquidate. It has grown significantly in last 4 years though its more like a paper profit as one always needs at least one house to live.
Why am I sitting on cash? Hum.... As I mentioned, I do not have time required to make a quality investment. I am pondering over some of the real estate investment options if I should increase the imbalance and go ahead. On the other hand, there is always 'I want to be on my own' thoughts though I am miles away. Let me post separately on this.
Regards, Rohit
Monday, January 26, 2009
Condo Apartment near Mumbai
Recently, I looked at one of the Condo Apartment near Mumbai. Tuscany Terraces, at Neral, has last few Condo Apartments available on Sale. You can visit there web site here.
We liked the property. Progress is in good shape and the entire property should be ready in next 3-6 months. It took us about 2 hours to reach the place, from western suburbs in Mumbai. Location is slightly inside from the main highway, but this did look like a great issue to me.
On Offer are Studio, Studio + Loft, 1 BHK & 2 BHK. I focused on Studio, keeping in mind my budget. Cost is around Rs.25 Lakhs. The Company offers a rent back option giving 6% returns for a tenor of 10 years with an option to discontinue at the end of 5 years. When you rent back, you still have 30 nights available for your vacation.
I checked if one can rent the room on his own. Yes, it looks so. Though the logistics would be too messy. Other option to increase the overall return would be to rent some of the nights from your 30 nights vacation. That seemed very much possible.
Checked with the banks financing the property. Interest would range from 10.25 to 11.30%. They were not sure if this would qualify for recently announced Govt. package of loans @ 9.25 for amount of < 20 Lakhs. This would be treated as second home, they said. They would fund from 70 to max 85% of the property value, furniture cost excluded.
It looked like a good fit, though I finally decided to skip this for now. Increased margins by banks meant higher contribution, for which I am not ready at this stage. Cash is king. Best way to double your money is to fold it over once and put it in your pocket :) My view is that real estate is set for some more correction though specific properties may not go down further, as in this case. They hardly have many apartments left for sale.
My concern is about the negative spread that I would carry, year on year. The cost of funding is around 11% on flat cost, furniture, stamp duty and registration. I would get returns @ 6% on flat cost. Now for the spread, I would essentially be banking on property appreciation in long term. Indicators like development of the entire area, TMC City in the nearby vicinity, upcoming Airport in Panvel, a new highway connectivity etc. point that good appreciation should be possible. Though for now, I am not in a mood to take a long term bet. Just waiting and watching. I may re-visit this in next few months.
Cheers, Rohit
We liked the property. Progress is in good shape and the entire property should be ready in next 3-6 months. It took us about 2 hours to reach the place, from western suburbs in Mumbai. Location is slightly inside from the main highway, but this did look like a great issue to me.
On Offer are Studio, Studio + Loft, 1 BHK & 2 BHK. I focused on Studio, keeping in mind my budget. Cost is around Rs.25 Lakhs. The Company offers a rent back option giving 6% returns for a tenor of 10 years with an option to discontinue at the end of 5 years. When you rent back, you still have 30 nights available for your vacation.
I checked if one can rent the room on his own. Yes, it looks so. Though the logistics would be too messy. Other option to increase the overall return would be to rent some of the nights from your 30 nights vacation. That seemed very much possible.
Checked with the banks financing the property. Interest would range from 10.25 to 11.30%. They were not sure if this would qualify for recently announced Govt. package of loans @ 9.25 for amount of < 20 Lakhs. This would be treated as second home, they said. They would fund from 70 to max 85% of the property value, furniture cost excluded.
It looked like a good fit, though I finally decided to skip this for now. Increased margins by banks meant higher contribution, for which I am not ready at this stage. Cash is king. Best way to double your money is to fold it over once and put it in your pocket :) My view is that real estate is set for some more correction though specific properties may not go down further, as in this case. They hardly have many apartments left for sale.
My concern is about the negative spread that I would carry, year on year. The cost of funding is around 11% on flat cost, furniture, stamp duty and registration. I would get returns @ 6% on flat cost. Now for the spread, I would essentially be banking on property appreciation in long term. Indicators like development of the entire area, TMC City in the nearby vicinity, upcoming Airport in Panvel, a new highway connectivity etc. point that good appreciation should be possible. Though for now, I am not in a mood to take a long term bet. Just waiting and watching. I may re-visit this in next few months.
Subscribe to:
Posts (Atom)