First of all sorry for not active since a week due to my travel. But this travel gave me an inspiration to write this post. Usually people think about property investment when they start to accumulate the good amount of cash. But I will show you few examples where even with small amount you can start your investment and earn the decent returns.
As I said above, when one start to earn, his/her first priority will be to fulfill the basic needs. Then slowly when he/she get confidence about financial stability then they start to think of investing in property. Reasons for that are two 1) Property investment need huge amount and 2) Liquidity is the problem attached with it.
But will start with an example. Before my father get retired from his government job in 1999-00, he purchased one site in Taluka level town called Badami (famous historical place of India) for Rs.17,500. Now the cost of the site is around Rs.3,25,000. Return on investment is a staggering 27% CAGR.
One more example from my home town Guledgudd (around 10 years back Marwadi community’s best choice to run the textile business and at that time this town had the highest tax payers in the whole Bijapur district) have currently population of around 35,000 to 40,000. It is neither a taluka nor the MLA constituency. Now the whole textile business is under the collapse and lot of families left the town. Eventhough it is nearer to Alamatti dam but still we get water once in a 15 days. Recently an agriculture land of 6 acres which is very near to town was sold at Rs.1,50,00,000. Few years back sites which were costing you Rs.30,000 to Rs.40,000 are now costing you in lakhs. This is not the situation of only these two towns but you may notice such huge changes in all most all areas.
I gave these two examples to show you that you may miss the bus if you thought of having property investment when you accumulate the good amount. If you have few lakhs then look for the smaller cities, towns or villages. You will definitely find the opportunities which are within your budget. Thinking to have property in the big cities is good idea but missing the investment opportunity is also a big financial drawback.
Even you can divert your major amount of your portfolio to this investment then I predict you will get good return than equity, debt or gold. But only the big caution in property investment is, you need to plan well in advance to liquidate it to meet your financial goals. Otherwise you may end in a big trouble.
Historical equity investment shown you good returns and recent gold price hike lured a lot of people to invest in gold too. But what I suggest is, with accumulating few lakhs then choosing the property which is within your budget, you can easily earn more than what other asset classes did in past. Reason for the boost is-Area of earth is always constant but population and our demands are increasing which ultimately bring this high returns on property investment.
I have return this post purely thinking about investment opportunities but not about have property for your residential purpose.