Sunday, November 09, 2008

The real state of real estate.... real'i'ty bites i guess


Building or owning your 'dream home' can be quite an ordeal. Since childhood we grew up hearing that real estate is the only real thing whose prices always escalate, and hence are the best investment to keep with the increasing cost of living. In our parents time getting the banks to sanction you a home loan was herculean tasks. Our parents who earned meager amounts would have to run trips up and down to and from the bank, getting them convinced enough to disburse them a loan. Look at how this scenario has changed today... today the bank hire agents to run after you, and provide you with details of how much loan you are eligible to get, how much you need to pay monthly, and also do all the documentation and paper work for you. The same market is so much more dynamic today. Banks are not only willing to take huge risks by giving loans, and but also have an unscrupulous mechanism of loan recovery very much in place! The next time you miss a loan payment, don't be surprised to see your neighborhood goonda at your door, threatening to break your neck if you don't pay up!!

Investing in the right property at the right time is the key. Though there are few who may not have gained a lot, but one may not have lost too much either. The luckiest of those are the ones who invested in the potential places at the right time, either owing to their foresight or sometimes by sheer chance! Their property values have doubled over just a matter of 2-3 years which is really short. Irrespective of the quality, size, looks etc. that should essentially determine the value of the property, the current price gets driven by the location (usually one tries to get as close to work as possible), connectivity, and availability of resources around the area. This is justified as most sane civilians like us would like to reside in relatively inhabited areas with the minimum available resources, rather than buy a mansion in the wilderness! Makes sense...

But there are these times when you hob around these so-called 'lucrative' areas, thinking they may by chance get you the property within your budget. Their brief over the call about the area gives you an illusion that you would visit the site and soon be signing off documents and close the deal in a jiffy. The reality only hits you when you get to the location, and realize it wasn't as close to your work as the guy described it. Not only was the location not close enough, but when you walk into the semi-built block to inspect the quite-pricey apartment, you are appalled by how such a huge space could have been grossly misused to build a shack like that!!! And remember that you are within a reasonable radius around your workplace; you just can't convince yourself that you would be paying a price like 'that' for a home like 'this'.

Given that today the prices of real estate a nearing saturation in the metros, no one can expect their money grow to a double in a short time, irrespective of how lucrative the area has 'already' become today! There needs to be a better balance... and every decision is so critical owing to the whooping sum one ends up paying as 'EMI' today... we even have movies being made about EMI now.... shows how much of an everyday concern it has become to lesser beings like us, stretching our budgets and curbing our expenditures to be able to afford places like this, and that too having to compromise on the looks of the home itself at times!

The other strategy of course, would be to look at the next-upcoming areas and predict the venerability of those areas today. With the present drive of our development and vote-hungry government who is rapidly converting farmland into SEZ, paying a quick meager sum to the farmers and selling off the land for real estate, manufacturing and IT, there are a plethora of such areas cropping up. Today those areas look like the wilderness, wild and beautiful, requiring one to take alternate round about to get there are the official roads to this place are under construction, and it will take a while before they become accessible from those routes. And then one also needs the surrounding infrastructure to come up, so that after you walk out of the 'gated' community, you don't bump into a loitering gang of naxallites! All this means that you can't getting any close to work today... you gotta wait! Now how on earth was I supposed to know that the government would chose this spot for the zone they want to develop and not where I stay??

Sometimes life does get you into spots like these.... you need to choose....