Property & Real estate investment in India ? Scenario in 2008
Real estate and Property development is one of the easiest way to track the growth of the country. Without Infrastructure growth its impossible to achieve high growth year after year.
Compared to China there are numerous obstacles in Indian infrastructure growth, which clearly indicate that India will not be able to achieve same growth figure as china year after year. If china has been growing at 10% for India even growing at 8% is a challenge.
I think that Indian infrastructure can grow only at 50-60% in comparison to the Chinese infrastructure growth. Due to this Indian year on year growth figures cannot be even 80% of the china.
Hence average growth in past 5 year will remain below 8% (i think 7%). Hence if India has growth of 9% for 1-2 years, in more years to come growth may be quite less.
There are several factors that clearly indicate that India is in recession phase after 2-3 year of good growth, Its being ignored by lot of people.
- Stock market is falling and given few jerks, these are just like the tremors of earth quake before the real one. I suggest retail investors to not try their luck now.
- Few people argued that people will pull their money form the stock market and then invest in the real-estate so real estate prices will not come down. This is rubbish, real estate prices are already down by 10% across India though little less in Mumbai. In certain pockets upto 30%. I expect average fall of 25%. Real estate boom phase 1 was created with genuine buyers from IT & ITes industries and easy bank loans, but Phase 2 was powered by Investors special FDI, NRI and black money investors who also borrowed from banks. There is bust in the Phase 2 and hence a expected fall.
- But real estate market specially residential is held by people who are very sentimental about property they buy and they rarely sell at lower prices. due to this the sale as well as purchase will get hampered for many years creating lot of social problems as well. Rental may fall. Even many builders hold property for very long to get better returns. In commercial there will be direct fall as business make quick decisions and will sell any property not giving them good returns.
- But as there is entry of some large corporates in Real estate property and infrastructure, to grow and keep getting good revenues even if at low margins, they will setup large residential projects and sell them at low margins. This may ensure lot of low cost housing to be available for next few years. These corporates will be happy to even work at 10% profits unlike small builders who normally target 25-50% profits. The corporates cannot hold property, they have to build and sell every year in large volumes to remain valuable in stock markets. Also their structure ask them not to play games with consumers but offer value to them. many of them are capable of creating a complete new town and city.
- Inflation is increasing, this will significantly impact the buying power of middle class
- In retail sectors its observed that construction or planning on new retail malls has significantly reduced. Few companies will exit mall business.
- Financial markets are in turmoil , this will directly effect industries and production,
- Elections are due in the country within 1 year, which directly impact government to be populist rather then take strong decision to help industries and exporters.
Wednesday, March 26, 2008
Tuesday, March 25, 2008
Samsung vs Sony LCD TV purchase
I did lot of research on the internet before buying the LCD TV. After research I first sortlisted
Sony & Samsung as the Brands. Then in their range I did research and found that
V series from Sony and R series from Samsung are best for quality an price and are most popular with value buyers.
Both have S series which is lower end.
I finalized 2 models
- Samsung Broduex LA40R8, Rs.84000/-
- Sony Bravia 40v300, Rs.88000/-
Sony is considered better in terms of quality but Samsung had better looks due to which i selected Samsung. If this is not important then Sony is better choice.
Sony & Samsung as the Brands. Then in their range I did research and found that
V series from Sony and R series from Samsung are best for quality an price and are most popular with value buyers.
Both have S series which is lower end.
I finalized 2 models
- Samsung Broduex LA40R8, Rs.84000/-
- Sony Bravia 40v300, Rs.88000/-
Sony is considered better in terms of quality but Samsung had better looks due to which i selected Samsung. If this is not important then Sony is better choice.
Tatasky Dish TV Review in Pune India
Tata sky is digital satellite dish antenna receiver service for Television in India.
I was using ICC cable tv connection in India but it was not having good quality, though they chart Rs.333/- per month in Koregoan Park, Pune, India. per month. Only 30% of the channels are clear on TV upto 29inch. On TV with 42inch LCD 90% of the channels will be not clear. Though this also depend on the wiring done, wiring quality and gauge but if you ask for change of wires then they may not do it without tkaing good amount from you.
I researched about the tatasky service and dish tv (from zee group). after doing lot of research i found that tatasky offer better technology, more clarity and better service then tatasky. You may read a lot of review saying tatasky service (call center and service team) is bad but Dish TV may be even worse.
So our of them TataSky is selected and we bought the Package from Croma store in Pune. Tatasky advertise it as 1500 but they charge Rs.1000 for installation which is not justified, that take the purchase cost to Rs.2500. ideally saying Tatasky lie on TV that tatasky cost 1500 and then charge exorbitant installation charges of Rs.1000. But reason for this may be that cable tv providers also charge Rs.1000 as installation charges though zee dish tv charge only Rs.300 or so.
The service person whom came for installation demonstrated us tha tour wire in the house for cable TV is of lower strength and may not be able to carry all channels properly. We saw it using his system an then allow him to change it. it needed 3 meters extra cable costing Rs.40 per meter. They provide 20 meters free cable.
We found quality of all the channels good, all channels were clear for 42 inch LCD TV.
At the time of purchase you need to also buy Rs.1000/- coupon which is actually payment of installation charges, the service person may like to see it. But you need to yourself activate this coupon in your account by calling tatasky call center else your account will show -Rs.1000/- balance and may be deducted from your future payment. Its easier to activate this voucher form tatasky.com website, this is voucher like prepaid voucher.
After that within 14 days of installation you need to purchase the monthly coupons and activate them. you can either pay directly on tatasky website using credit card or buy coupons from tatasky dealers and then activate them.
You will need your subscriber ID, which you can also see on your TV by pressing home button on remote. I was surprised that i can also see my payments made to tatasky and due dates on the TV. i took super saver package cositng Rs.300/- per month but their Family pack of Rs.250/- per month is more then enough for all requirements.
I was using ICC cable tv connection in India but it was not having good quality, though they chart Rs.333/- per month in Koregoan Park, Pune, India. per month. Only 30% of the channels are clear on TV upto 29inch. On TV with 42inch LCD 90% of the channels will be not clear. Though this also depend on the wiring done, wiring quality and gauge but if you ask for change of wires then they may not do it without tkaing good amount from you.
I researched about the tatasky service and dish tv (from zee group). after doing lot of research i found that tatasky offer better technology, more clarity and better service then tatasky. You may read a lot of review saying tatasky service (call center and service team) is bad but Dish TV may be even worse.
So our of them TataSky is selected and we bought the Package from Croma store in Pune. Tatasky advertise it as 1500 but they charge Rs.1000 for installation which is not justified, that take the purchase cost to Rs.2500. ideally saying Tatasky lie on TV that tatasky cost 1500 and then charge exorbitant installation charges of Rs.1000. But reason for this may be that cable tv providers also charge Rs.1000 as installation charges though zee dish tv charge only Rs.300 or so.
The service person whom came for installation demonstrated us tha tour wire in the house for cable TV is of lower strength and may not be able to carry all channels properly. We saw it using his system an then allow him to change it. it needed 3 meters extra cable costing Rs.40 per meter. They provide 20 meters free cable.
We found quality of all the channels good, all channels were clear for 42 inch LCD TV.
At the time of purchase you need to also buy Rs.1000/- coupon which is actually payment of installation charges, the service person may like to see it. But you need to yourself activate this coupon in your account by calling tatasky call center else your account will show -Rs.1000/- balance and may be deducted from your future payment. Its easier to activate this voucher form tatasky.com website, this is voucher like prepaid voucher.
After that within 14 days of installation you need to purchase the monthly coupons and activate them. you can either pay directly on tatasky website using credit card or buy coupons from tatasky dealers and then activate them.
You will need your subscriber ID, which you can also see on your TV by pressing home button on remote. I was surprised that i can also see my payments made to tatasky and due dates on the TV. i took super saver package cositng Rs.300/- per month but their Family pack of Rs.250/- per month is more then enough for all requirements.
Best Tax saving Investment option in India
If you intend to Invest your money as well as Save tax, then here is your best option
Since last 3-4 years, Investment in ELSS has been proven itself to give the best returns as well as tax savings.
SBI Magnum Tax Gain Growth Fund, is considered best and biggest ELSS scheme. In last 3 years it has given returns of 170% which is more then any other investment options even other risky options. + Add your tax savings of 30% , the total benefit is 200% in 3 years. Even 100% benefit will be considered very high.
Tax savings: Many people do not focus on Tax savings and think that all the money they need to invest to get tax savings is loss of their savings, very long term investments (10-20 yrs) and the returs will be setoff significantly by the inflation.
But this is not true if you look at ELSS. ELSS has lock in period of 3 years only, the return on investment is extremely high and inflation is negligable amount.
Investment in LIC has 2 components Insurance component and Investment component. Your premium is partly used to provide insurance and partly invested on your behalf to give returns. Due to this your returns are not high. Also sometimes for focusing into returns you may end up selecting wrong insurance policy and its very confusing. I suggest to consider insurance saperate from the Investment.
Only take pure insurance policy form LIC or other Insurance provider like Term insurance + Whole life insurance (limited payment). Riders for disability may be considered.
I suggest all people to invest in ELSS schemes in India to save tax and get best returns on investments
Since last 3-4 years, Investment in ELSS has been proven itself to give the best returns as well as tax savings.
SBI Magnum Tax Gain Growth Fund, is considered best and biggest ELSS scheme. In last 3 years it has given returns of 170% which is more then any other investment options even other risky options. + Add your tax savings of 30% , the total benefit is 200% in 3 years. Even 100% benefit will be considered very high.
Tax savings: Many people do not focus on Tax savings and think that all the money they need to invest to get tax savings is loss of their savings, very long term investments (10-20 yrs) and the returs will be setoff significantly by the inflation.
But this is not true if you look at ELSS. ELSS has lock in period of 3 years only, the return on investment is extremely high and inflation is negligable amount.
Investment in LIC has 2 components Insurance component and Investment component. Your premium is partly used to provide insurance and partly invested on your behalf to give returns. Due to this your returns are not high. Also sometimes for focusing into returns you may end up selecting wrong insurance policy and its very confusing. I suggest to consider insurance saperate from the Investment.
Only take pure insurance policy form LIC or other Insurance provider like Term insurance + Whole life insurance (limited payment). Riders for disability may be considered.
I suggest all people to invest in ELSS schemes in India to save tax and get best returns on investments
Home, Property, Real estate investments
Home & Property:
It is extremely important for everyone to plan a home for yourself even if you stay with your parents or relatives. And it is necessary to invest as early as possible. In case you pay rent then you may end up spending lot of money on rental, live at lower standard of life and may not be well satisfied in long term.
- Sometimes you may not be sure in which city or area you plan to stay. Many a times this may not be a choice available to you. If you think there can be delay in this then I recommend you to still invest in any suitable home property option in and around the place to stay or your relatives stay. Take Home Loan buy the property and then rent it out. This rent may compensate for the rent that you may pay for staying at other location.
- Also in future when you find a right property for yourself , you can sell this one and buy the new one. This will screen you from the increase in property prices as the property price of your existing home will also keep increasing with the market.
- if you are just planning and thinking when and where to buy home since last 1 year, then you are seriously loosing money every month without feeling it. You will feel the heat in future.
- If you find that property prices are very high, then I recommend to wait for some time for the prices to come down or goto some areas where property prices are low and buy home for investment. In year 2005-2007 the property prices have risen sharply and its expected to come down in 2008-2009 in many pockets (where lot of new residential projects come up) . so I suggest you to find right locations and buy a home.
- Loan - Loan rates are now coming down. I suggest you to buy smaller home if you are not getting enough loan. Do not think that it is always necessary to stay in the house that you buy. You can buy it for investment, screening yourself form property price hikes, and earning rental incomes.
- If you think that stock markets and mutual funds are risky, then Property market is probably with much less risk.
Life Insurance planning in India
Life Insurance
In case of Term assurance policy (one type of policy) you can get a large amount of Insurance for next 15-20 years for a very low cost. The insurance claim can be made only in case of death/disability withing the next 15-20 yrs. After that the policy will expire. Though you do not get back any money but also the amount payable is very low compared ot any other policy.
Second useful policy is Whole life Limited payment. This policy is valid for whole life but premium payment may end at the time of your retirement. In this case the Insured amount will be received by your family/nominee after your Death. You can also have add ons in this policy like Disability rider etc. that will allow you to benefit in case of disability.
Other then these 2 schemes, other Life Insurance policies are (Investment + Life Insurance) policies. i.e. part of your premium is used for giving you Insurance and rest of the part is invested in markets (like mutual funds) to give you returns after maturity. By making different combinations Insurance companies create several hundred different confusing schemes.
For employees who earn below 20k per month, i suggest to consider combination schemes.
For employees who earn above 20k per month, i suggest to invest separately in the Life Insurance & Investment schemes. Do not mix them, as in future when your income grow your investment requirements will grow faster but your insurance requirements may not grow. It is easier to close a investment and start new one, combine investment but combining or reviewing Insurance policies is not possible. Also as India is growing new and new investment options are coming to the market and you may like to change your investment planning every few year.
Life Insurance, Health Insurance & Investments planning you need
What aspects of life you need to plan ?
- Save Tax. You may end up paying 10% to 25% of your total yearly earnings as Income Tax. Instead of paying taxes you can invest your money in schemes that will not only save your tax but also give you high returns. So double benefit. If you you do it every year then you will have lot of saving s.
- Life Insurance: As you are an important earning member of your family or will make a family, it is must for you to secure the future of your family in case of your Death or Disability. Earlier you plan, more you save. If you are interested in pure Insurance cover for yourself I suggest to go for Term Assurance & Whole Life Limited payment policies. I believe that you should have life insurance cover of at least 10 times your average Yearly Salary though 20 times is recommended as your salary will increase in future.
- Health care - is most important planning aspect because in India Health care problems are the highest along with highest risk of accidents. Secondly in India we have so many relatives and in case of difficulty it will be almost necessary for you to contribute lot of money for their health care. Listening things like my mother or close relative has major operation etc. is very common. Even if you take care of your health, others around you may not. It is necessary to invest in health care plans like Mediclaim for yourself, your wife, children as well as parents. Many such schemes now offer Cashless treatment, i.e. in case of problem just show the Health insurance card to the hospital staff and they will carry cashless treatment if the cost is less then the insured cost. In Rs.10-15k per annum you may be able to pay for the health insurance of your complete family.
Investment - Company invest on your behalf in PF already for you but this amount may not be significant. So you need to invest more specially to meet your future bulk money requirement. Once you grow you will need to pay large sums for Children education, Marriage, Foreign travel, Valuable item purchase or emergencies. Hence if you have some investments you may withdraw them in future to meet these needs. At present investment in Tax saving Mutual Funds and ELSS (also like mutual funds) is considered best investment option. Many people think that these are risky but overall they have very less risk but better returns. More then 95% of the people who have invested in Mutual funds have benefited. All long term investors are expected to always benefit.
- Save Tax. You may end up paying 10% to 25% of your total yearly earnings as Income Tax. Instead of paying taxes you can invest your money in schemes that will not only save your tax but also give you high returns. So double benefit. If you you do it every year then you will have lot of saving s.
- Life Insurance: As you are an important earning member of your family or will make a family, it is must for you to secure the future of your family in case of your Death or Disability. Earlier you plan, more you save. If you are interested in pure Insurance cover for yourself I suggest to go for Term Assurance & Whole Life Limited payment policies. I believe that you should have life insurance cover of at least 10 times your average Yearly Salary though 20 times is recommended as your salary will increase in future.
- Health care - is most important planning aspect because in India Health care problems are the highest along with highest risk of accidents. Secondly in India we have so many relatives and in case of difficulty it will be almost necessary for you to contribute lot of money for their health care. Listening things like my mother or close relative has major operation etc. is very common. Even if you take care of your health, others around you may not. It is necessary to invest in health care plans like Mediclaim for yourself, your wife, children as well as parents. Many such schemes now offer Cashless treatment, i.e. in case of problem just show the Health insurance card to the hospital staff and they will carry cashless treatment if the cost is less then the insured cost. In Rs.10-15k per annum you may be able to pay for the health insurance of your complete family.
Investment - Company invest on your behalf in PF already for you but this amount may not be significant. So you need to invest more specially to meet your future bulk money requirement. Once you grow you will need to pay large sums for Children education, Marriage, Foreign travel, Valuable item purchase or emergencies. Hence if you have some investments you may withdraw them in future to meet these needs. At present investment in Tax saving Mutual Funds and ELSS (also like mutual funds) is considered best investment option. Many people think that these are risky but overall they have very less risk but better returns. More then 95% of the people who have invested in Mutual funds have benefited. All long term investors are expected to always benefit.
Insurance & Investment Planning for people in Service
It is important for an individual to do very good Tax Rebate & Investment Planning early in the life. This will make you more secure and confident as you grow.
It will also show how mature you are in your life planning. Only if an employee is very good at his personal planning he can be of good value to a company.
Though it is good to pay income tax for the growth of the nation, But government has made investment schemes where by investing you will not only be indirectly paying taxes but will also earn returns on your investment.
i.e. instead of paying say Rs.1000/- as tax to government, you may invest Rs.4000/- in some Tax saving schemes. In this case you will not only get back your Rs.4000/- after few years but will also earn good returns. so may be after 5 years you will get back Rs.8000/- depending on the scheme you choose.
Now there are schemes available that can give interest rates higher then Bank deposits. many of these schemes invest their money in the Growth sectors in India, and as the nation grow your money also grow. So you are part of the nation's growth.
It will also show how mature you are in your life planning. Only if an employee is very good at his personal planning he can be of good value to a company.
Though it is good to pay income tax for the growth of the nation, But government has made investment schemes where by investing you will not only be indirectly paying taxes but will also earn returns on your investment.
i.e. instead of paying say Rs.1000/- as tax to government, you may invest Rs.4000/- in some Tax saving schemes. In this case you will not only get back your Rs.4000/- after few years but will also earn good returns. so may be after 5 years you will get back Rs.8000/- depending on the scheme you choose.
Now there are schemes available that can give interest rates higher then Bank deposits. many of these schemes invest their money in the Growth sectors in India, and as the nation grow your money also grow. So you are part of the nation's growth.
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