I am 21 years old and I live in India. I am fairly new to real estate investing. In India, the condition of real estate is slightly different. The builders are selling homes for almost 10 times the price they bought it for. So no one is really interested in buying these houses. There is a very slow depreciation of prices of homes since many years. The correction of these prices were ongoing but covid-19 stopped that from happening. So there is a very less demand of real estate while the inventory is quite a lot. On the other hand, the interest on home loans here is 8-12% which is almost tripple than other western countries. So strategies like brrrr dont really work here. One can use appreciations for gaining profit but that too is not guaranteed which is suggested by the previous trends. I am currently a engineer and my job is quite high paying. So I basically wanted to know how can I go about with real estate investing in India or any other alternatives if you can suggest.
I don’t think folks on this forum are familiar with India.
In general, there are couple aspects to real estate investment: appreciation vs cash flow. Appreciation is harder to predict. You can try to use historical # to predict. But I suspect in emerging market like India, there can be a lot of variable (boom and bust) house price. It can be like rolling the dice to go for appreciation.
Cash flow is easy to calculate. You know your downpayment, loan terms, and monthly payments. Rent can change, but typically it is quite stable. Repairs can also vary, but in general you can predict this. So you can quite easily calculate cash flow and ROI.
My personal take is buy property for income (or at least break even). Then whatever appreciation is a bonus.
Not sure what this statement means and how it relates to your potential investment. I assume these new homes are catered to small subset of population (wealthy and well off). So builders are trading slow turnaround for high return. In any case, this should not have to do with your potential investment, unless you want to invest in property that competes with these builders.
I do not know how good is Indian real estate market for an absentee landlord. A few years ago, there used to be a glut of homes in the Delhi, its suburbs, and in Northern Indian cities. Those cities had some partially occupied buildings and some totally empty buildings, and some buildings did not even start even though the builders took earnest money from the customers and were even receiving monthly payments.
American Real Estate will soon become like that of India where the landlords are afraid of renting out the empty unit for the fear of loosing ownership to the tenant (through adverse possession) or not receiving rents (rent freeze or rent moratorium).
India is still living through its Nehruvian-Stalinist Socialist model that emphasized command and control economy and takeover of private property by government. Throughout 1950 and 1960, the government of India under Nehru (and her daughter) took over (and nationalized) lot of private and big business and property. The governments in recent years have tried to undo some of the past mistakes (thefts if you will), but it is very hard to do in a democratic setup. Unfortunately, Real Estate remains victim of India’s mistakes of 1950s and 1960s.
I can only think the same things do not happen in the USA, although I see an increasing appetite for erosion of property rights in the USA. That worries me a lot.
There is a joke ( I do not know if it is based on facts) that Air India (was a private business run by India’s TATA group before it was nationalized in 1950s) trained Singapore Airlines Now, the Singapore Airlines one of the best run Airline in the world, and AIR India keeps making losses and living of taxpayers support. Govt is trying to sell Air India but not many buyers are coming up to buy it.