Hi Sunil, Greeting!

What’s your opinion about investment in a plot in Maheshwaram (Hyderabad), this is the place where the Intl Airport, Infosys and Fabcity is coming up.

I am looking at this investment from a resale perspective a few yrs down the line. Would request and appreciate your advice on the same.

Thanks and Regards

Saurabh Jaggi

Sunil's Answer... 

Saurabh,

Any investment has to match your goals…

I would imagine that you are looking for this plot to go up in price… which I’m sure in the long term it will… however no one can be sure what will happen in a 2 year period.  No one knows which way the property market will move in any one part of a country. Hyderabad has seen some pretty good growth over the last few years.. will it keep going up? Well based on what you’ve told me, I can say that Investment into an area is a good sign.  Especially  if large companies are buying in an area … I mean you would hope that Infosys and Fabcity have done their research.. but by the same token, this does not guarantee that your investment will go up.

Each investment has risks… some bigger than others. Worst case scenario is that the price of land falls by 50% (which I've never known to happen).  The best case is that prices double in two years (or even triple)…  as an investor you should be ready for both.

Land doesn’t generate income each month – so if you’re putting your money into this plot, you will have to wait 2 years to see a return, and if you’re raising finance then you have to be ready to add the cost of your monthly payments for 2 years to the land. 

At the end of the day, land is not a bad investment… but I only put in surplus money (money that I don’t need) into a land deal… and you need to be prepared that if prices stagnate or go down in the 2 year period to wait until prices go up again.. so don’t have all your eggs in one basket.

Sunil