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Hi guys. So in my life I have purchased
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real estate in three different
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countries. So one is that I have
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purchased a lot of real estate in India
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primarily in South Goa. Very happy with
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those purchases. Second I bought a
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property very recently in Dubai. So it
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has a unit which is near BJ Khalifa. So
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that's a second unit, second country.
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And third I have purchased a house in
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Thailand. Right? So these three places,
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three different locations I have
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purchased real estate. Now this is not a
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bragging video. The reason why I
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highlight this point is that I have
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practical experience of buying real
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estate across multiple geographies and
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as a result I will be able to share my
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perspective of buying real estate and
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some hard lessons good bad stuff that
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I've learned about real estate
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purchasing from an investing lens. This
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is very important because these days
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when you open up like YouTube videos you
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will see like a developer doing a
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podcast but it's developer jobs to send
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sell you his properties. Okay? So he's
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not going to give you like a fair
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assessment. So on this video if you
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listen to it in a rational manner there
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are some good points that you'll pick
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up. So in a nononsense fashion let me
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start detailing out my learnings from
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real estate. I will highlight 10 12 key
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points. Right? So let's begin. The first
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key thing that I learned about real
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estate purchasing is the fact that you
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need to consider real estate either as
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an investment or a lifestyle property.
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For example, most of us most of the
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retail investors are interested in
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buying a house but we confuse it with
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investment. See, for example, if you're
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buying a house, then buy a house. Don't
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worry too much about the fact that you
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know what returns will I make out of it
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and will I be able to sell it after two
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years, three years? Because the problem
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is and the rational argument here is
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that if you build a home, if you attach
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like your kids pictures, if your kids
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are spending time in that house, will
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you really sell it, right? I mean, at
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least not in your lifetime, you would
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not like to sell it. So, the point is
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that don't see a house as an investment.
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And similarly, if you're making real
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estate purchases from an investing point
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of view, don't confuse it as a house.
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This is one of the key changes or key
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things that people in India do not know.
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They consider their house as an
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investment. It's very unlikely that you
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will sell it. Right? And so please don't
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do that. It's not worth it. Right? My
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advice to you is and this is something
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that I have personally applied. So
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across the board I have purchased like
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maybe 50 crores worth of real estate,
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right? And in that I own one house,
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right? And that house is in Goa and that
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is the place where I would eventually
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settle. And the that house I pretty much
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bought it like last year, right? and I
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did some renovation work in it. In fact,
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renovation work is going on. So the key
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tip that I would give to you in terms of
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buying a house is that try to buy like
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an older house. There's a trick behind
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it. The trick is that see what ends up
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happening these days is that there is a
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lot of inflation which is happening
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especially on commodities. So builders
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for example if they have started
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developing a project in let's say 2025
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they will give you the handover in 2028
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but for the next 3 years they have to
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deal with cost of construction inflation
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because the price of cement will go up
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price of bricks will go up price of
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labor will go up. So they do their worst
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computation they'll say that okay today
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like I mean after 3 years inflation will
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at least be 10% a year on construction
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material. So if today I feel the fair
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value of this property is 100 then after
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3 years it should be 130. So 130 say I
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will sell. Right? So that is what they
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do and this is one of the reasons why if
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you for example come to Dubai market you
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will realize that off plan properties
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off plan means under construction
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properties on per square ft basis are at
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least 20 30% higher compared to ready
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properties which does not make any sense
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because ready property means that hey
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you can pay money today and you can get
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possession of that property and start
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getting rent or saving rent. But these
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properties are cheaper in majority of
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the parts of the world. Not just in
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Dubai, even in like in India, you will
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see like markets like Gurong that this
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is happening that your newer units which
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are getting constructed, they are much
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much expensive compared to older units.
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So if you're looking to buy a home, my
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advice would be that buy like an older
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unit. You'll get more spacious, you'll
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get a much better price also and in all
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likelihood much better location as well,
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right? So because whatever new
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developments are coming they will either
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be on the outskirts of the city like I
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mean absolute like main main city
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development will not happen or like
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prime location development will not
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happen. So if you want to enjoy like
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good location, good society, reasonable
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sizes and reasonable prices, buying an
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old house kind of makes sense. Now from
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an investment point of view is that the
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best thing? That is a subsequent
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discussion. But this is my viewpoint.
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Now this is not the viewpoint. This is
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my assessment which brings me to the
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second key point and you need to align
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the first point along with this which is
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that see what we think is that and I get
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questions like hey should I buy it in
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like Gura or Goa or should I buy it in
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like Japan or should I buy it like in
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Dubai. See basically it's not a question
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of Gura Goa this that it's a micro
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market. So real estate does not work
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that okay if I buy an agriculture land
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I'll always get like an appreciation or
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if I buy like a land it will always
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appreciate or if I buy it in Bangalore
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that city is developing so my property
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will also develop. It's what you are
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doing is called as macro. Okay macro
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does not work on real estate per se.
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Why? Because there are individual micro
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markets. For example I'll give you my
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own understanding. For example when I
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bought this unit in Dubai basically I
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bought it as a per square feet price of
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1,600 dirhams per square feet. Okay,
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this is the rate that I paid right in
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front of this. There is a building which
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is coming that is getting sold at 300
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psf. Now I'm not saying that the
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building which is coming in front that
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is getting sold at 300 psf and now
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you'll say that okay you're making up
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this data. So just go and look up right
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in business way right so this is the
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name of the area business mari drive
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right so you can just search for it what
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is the going PSF so you'll see like
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premium developments hitting even like 3
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and a half thousand psf now if I'm able
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to find out a property which is cheaper
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right then I would pretty much like pick
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it up even from an investing point of
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view or like you know living point of
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view so that's an assessment that I'm
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trying to give you but the larger point
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that I'm trying to align here is that
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see real estate is a micro market micro
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market means that for example business
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bay which is an area within Dubai that's
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a market in itself similarly if you're
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going to like Guruda then there might be
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like south Guruda north Gurongo I don't
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know I've not lived much in Guruda but
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I'm just taking random names so maybe
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like sector 19 versus sector 27 the
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features of the properties there might
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be very very different so you need to
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talk about real estate at a micro lens
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this is very important very critical
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another example that I'll give you is
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the difference between north and south
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Goa market now you would have heard that
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the north goa real estate market got
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bloated And in the recent downturn in
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tourism, the north goa prices have
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corrected like crazy. But no impact was
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there on South Goa, right? Why? Because
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it was already at a value to begin with.
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So there was hardly any correction
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there, right? So long story short, Goa
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is not Goa when it comes to real estate.
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You have to differentiate between
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different areas. For example, Panjim,
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for example, Purvoreim, for example,
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North Goa, South Goa. If you go to South
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Goa, then how far is the beach? Are you
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going in the interiors? Are you going in
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the farm play area? Right? So a lot of
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considerations need to go in. So you
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need to check the micro lens. That is
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the important aspect in terms of
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figuring out investing oriented
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viewpoint. Then the third key thing
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comes is the concept of real estate
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cycles. Now typically real estate cycles
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used to last like 18 years and there
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what the cycle means is that see there
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will be like a burst period for example
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2020 and suddenly real estate prices
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will crash. Now you'll say that okay in
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2020 price correction absolutely right I
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mean properties were not getting sold.
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People were willing to sell their
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properties at half the price. Okay. So
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that was a crash cycle. Then there was a
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buildup. Then there was euphoria. Then
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there was pure speculation and then at
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some stage there will be another burst.
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Okay. So this is a cycle and usually in
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the past this cycle used to take like 18
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years. This cycle was cut short in this
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current debt cycle per se because a lot
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of debt was issued. So the fixed supply
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assets like Bitcoin, gold, real estate
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it they really escalated. Okay. So long
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story short, you do need to time this
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real estate cycle sensibly. I'm not
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saying that make all your investment
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decisions as per this real estate cycle
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but some decisions need to be made. Now
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how can we relate it to the current
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market? So think about it from the
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viewpoint in Bangalore, Mumbai, Delhi,
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these big cities. One key trend that has
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picked up here is that the new
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developments are being sold on payment
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plans. Now this concept is not new in
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India. This was copied from Dubai. Okay.
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That in Dubai builders were selling it
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on payment plans that you pay 1% and the
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property is yours. you just keep on
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making 1% payment every month and after
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like you know x number of months the
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property is yours okay you want great
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okay you know what every month just 1%
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of the entire thing I have to pay so
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this is amazing so they ended up buying
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and speculating on properties right now
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something similar has happened in India
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also because as long as you push people
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to take like small ticket investments
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people are crazy right and people will
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just speculate on that like anything so
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this payment plan thing has picked up in
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Delhi Mumbai all that so as a result
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what has happened is that people are
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buying property is just to speculate.
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Now these type of investments get very
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aligned with the real estate cycle. Now
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if you are playing this game in a upward
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rising real estate cycle where the
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prices are continuously going up and are
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likely to go up over the next 2 3 years
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okay you can speculate but in case you
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get caught in a bad cycle then you are
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messed up really badly. Okay, because
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leverage works on both ways, right? So
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it's not just leverage is not people
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will tell you that okay 20% down payment
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you make rest 80% you can play pay later
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and buy then your property price right
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so why not you do this 1% plan thing
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sounds great as long as the prices are
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going up but the moment the prices start
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correcting the EMI defaults will happen
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and there will be panic selling and you
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can actually lose a lot of money playing
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this game so be a little bit sensible in
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terms of real estate cycles right so
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this is very critical I leave it to your
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judgment what type of segment we are in
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right now. Is it like a boom cycle going
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on or are we stagnating? Are we
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following your cop? Right? I mean, how
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you want to see this, right? My job is
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to tell you the concept. Now, it's your
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prerogative how you research it further.
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Which brings us to the next aligned
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point. And smart people will listen to
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this. You make money at the time of
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buying a property, not at the time of
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selling the property. You'll say that,
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okay, this is like ridiculous. So, I
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actually have a client who's a
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billionaire, right? He works with me and
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he lets me manage his money in a way.
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So, this is a concept that I learned
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from him. He's a real estate
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billionaire, by the way. So I do discuss
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a lot of things with him in terms of
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finding my own investment approach. So
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his point of view was that see boss I
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mean unless you buy like a property at a
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good price you're never going to make
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money on it right and this is true and
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we kind of mess this up. For example if
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you go to like a premium developer in
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let's say hyderabad now these premium
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developers will sell you properties at
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least 20 30% higher compared to like an
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average developer. And what is the
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narrative going on in the economy right
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now or if you speak with like real
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estate brokers or real estate developers
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that hey our development cost like the
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best and we are the best and you know
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the resale value is this that so here
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this is the reason why we are charging
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you like 40% 50% premium I'm not saying
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that don't pay a premium to a premium
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developer pay it okay but there has to
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be a limit to this okay if you are
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buying a property which is 20% 30% above
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its fair value honestly you have lost 4
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years on that Right. The average growth
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of real estate on a typically would be
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like 8%. Right? The answer sensible real
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estate growth in India and if you are
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paying like a 32% premium it's at least
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like 3 and a half four years of return
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gone right. So please be sensible you
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will lose money on that. On top of that
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if you're buying apartments right
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because apartments will typically lose
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value as they get older. So if you're
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playing this game on apartments it
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becomes an even more painful point. If
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you're buying land villas anything
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associated with that you can always
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remodel your entire villa. make it look
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shiny all that but if you're owning a
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small unit in a building how will you
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make it make the entire building shinier
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right building will be old right the
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facilities common facilities in that
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building will be old so you can't do
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anything much about it so this becomes a
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slight issue so remember this that money
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is made in real estate at the time of
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buying real estate not at the time of
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selling it if you buy like 20 30% more
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expensive you have lost money if you buy
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it at below fair value or stressed value
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then you will make money my plan is very
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simple actually aggregated a lot of
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property in the year 2022 2023. I did
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not buy much in 2024. This is a unit
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that I had purchased in 2022 right at
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approximately 4CR. Now the market going
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rate right now is 9 and a half CR. Okay,
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so not kidding. This does not include
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like COVID move and all. Okay, so why?
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Because this was a unique property. I
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got a good deal on that property. I
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waited a lot in terms of scouting buying
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a really good quality property. And this
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is something that I do everywhere,
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right? Right? So, wherever I'm
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investing, I primarily would buy I would
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have one home, right? I mean, I would
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not have like 100 different homes. So,
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whatever properties I'm buying from a
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real estate investing perspective, I
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will take my time. I'll take do a lot of
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due diligence. I will check the
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valuation pricing. The problem in terms
00:12:37
of checking valuation pricing is that no
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one is going to come and tell you that
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hey, this is the right price. So, how do
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you figure out what the right price is?
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Well, do yield computation. So yield
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computation means that for example if
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some broker shows you a very shiny
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apartment and tells you that you know
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what the price is 1 cr ask him how much
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rent will I be able to fetch they will
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give you some kind of false answer only
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right
00:12:57
property w so they might give you like a
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false answer don't take that I won't
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take it okay they might say 50,000 now
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go and investigate whether you are
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really making like 50,000 on it now
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50,000 on a 1 CR property it's a 6%
00:13:09
yield why because 50,000 into 12 which
00:13:11
is 6 lakhs so that's 6% yield now this
00:13:14
really good number. Okay. Now, if you're
00:13:16
getting such deals, amazing. This is a
00:13:18
very good rental yield property. Okay.
00:13:21
But you're unlikely to get it because
00:13:22
you know if such a deal exists then what
00:13:24
happens is that the base price of the
00:13:26
property itself is inflated by the
00:13:28
developer. So they will not sell you at
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1 cr. They will sell you at 2 crores and
00:13:31
bring the rental yield to 3%. So this is
00:13:34
typically what they will do right. So in
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order for you not to buy like super
00:13:38
expensive property always remember a 4%
00:13:40
yield rule. So if you are able to find a
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property at around 4% yield that's a
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good yield in a country like India. So
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this is what I would say. Now this
00:13:48
number will change as per different
00:13:50
countries different cities etc. But on
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an average in a metro if you can't find
00:13:54
a 4% yield on apartments according to me
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it's useless. Now many of you will get
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pissed off. How dare you say such a
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thing right that okay 4% yield I I'm
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getting only one and a half% y but I did
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not tell you to buy that property. No.
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So like now it's your job how you figure
00:14:07
out where to where you'll get this 4%
00:14:09
yield. I'm just setting the baseline
00:14:11
rules formulas. So now it's your job how
00:14:13
you actually end up scouting for it. The
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next point is around property
00:14:16
maintenance. Now this is a new scam
00:14:18
which is kind of brewing up that you'll
00:14:20
be sold an apartment by XYZ builder and
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that builder what he's going to do is
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that you know what okay 1 cr apartment
00:14:26
go and buy it and you'll go and buy it
00:14:28
and then they will start charging you 5%
00:14:30
or five lakh rupee as maintenance charge
00:14:32
on that apartment and you will not be
00:14:34
able to do jack Okay. So this is a
00:14:36
unfortunate problem that happens. This
00:14:38
is like the builders are not making
00:14:39
money just in terms of building the
00:14:41
building and selling you useless
00:14:42
apartments. But on top of that, they are
00:14:44
charging you crazy maintenance. So be
00:14:46
very clear before you commit to buying
00:14:49
any property, please check what the
00:14:50
eventual maintenance would be, how that
00:14:52
society will be handed over by the
00:14:54
builder to the cooperative society that
00:14:56
your society will form eventually. What
00:14:58
the expected maintenance would be. Get
00:15:00
all these things in writing so that you
00:15:02
have something to go back to. Right? If
00:15:04
you just simply end up locking yourself
00:15:07
in a subscription where you are paying
00:15:08
like five six lakhs a year just for
00:15:10
property maintenance on a one lakh 1 cr
00:15:12
property it's madness it will just
00:15:14
bankrupt you right so please be clear
00:15:15
about this this is very important and
00:15:17
this is like a new scam which is brewing
00:15:19
up builders charge whatever maintenance
00:15:20
that they feel like right for really
00:15:22
useless amenities there will be one pool
00:15:24
and nothing right and they are charging
00:15:26
like you know and one watchman that that
00:15:28
is like half the time and he himself is
00:15:29
like half the time asleep okay so just
00:15:32
for that they are charging you like you
00:15:33
know per unit they charging like you
00:15:34
know five five six six lakhs a year this
00:15:36
is madness okay so and a good property I
00:15:40
would say that it should not have like
00:15:41
more than 2% to 3% max maintenance right
00:15:45
a year that's the maximum I'm saying um
00:15:47
yeah anything beyond that you really
00:15:49
need to question it okay so then comes
00:15:50
the next point that you need to buy real
00:15:52
estate which you can liquidate easily
00:15:54
for example I have seen like really
00:15:56
wonderful land which is huge and this is
00:15:59
like a common problem in Goa that
00:16:01
basically it's very difficult to get
00:16:03
anything developed in Goa right and
00:16:05
people would end up investing in like
00:16:08
you know 20 20,000 square meter plots
00:16:11
now you have bought such a huge piece of
00:16:12
land you will go to the court you'll try
00:16:14
to get it partitioned so that you can
00:16:16
sell developed plots because these
00:16:18
developed plots are sold in like
00:16:19
Bangalore or wherever you can't do that
00:16:21
that easily in Goa okay so you have to
00:16:23
understand the dynamics that even when
00:16:25
you buy land in a state like Goa it
00:16:28
might be difficult for you to liquidate
00:16:29
if it is huge parcel of land okay so all
00:16:32
these points are important please keep
00:16:33
this in mind. Similarly, people end up
00:16:35
buying like really expensive, very
00:16:37
average properties which again are like
00:16:40
available in plenty in the market. They
00:16:42
find it hard to liquidate. Similarly,
00:16:45
people end up buying very similar two
00:16:47
common type of properties. Example 2 BHK
00:16:50
in a township. That's the hardest
00:16:52
property liquidate. Why? Because there
00:16:53
are so many townships coming. City can
00:16:56
forever expand, right? It's just again
00:16:58
madness, right? So, just be careful. If
00:17:00
you're owning a very plain vanilla type
00:17:02
of a unit, you'll have a harder time
00:17:03
liquidating it. So, whatever units that
00:17:05
you are buying, it should have some kind
00:17:07
of unique proposition, right? Or a USB.
00:17:10
This is an important point. Please keep
00:17:11
this in mind. Okay. So, now you might be
00:17:13
feeling a little bit bogged down, you
00:17:14
know, then what's the point of even
00:17:16
buying real estate? Why did you get into
00:17:18
real estate? Okay. See guys, I'm like
00:17:20
almost like 30% of my portfolio is real
00:17:22
estate. 70% 65% 70% is around Bitcoin
00:17:26
plus stocks. So, I'm still primarily a
00:17:29
stocks guy. Okay, I do trust equities.
00:17:32
But what real estate allows you to do is
00:17:34
that it allows you to handle volatility.
00:17:36
Volatility, for example, if there is a
00:17:38
30% crash in the stock market, many
00:17:40
people will panic if 100% of their
00:17:42
portfolio is just pure stocks. That's
00:17:45
problem one. Okay. Problem two, even if
00:17:47
you're a seasoned investor, you don't
00:17:49
bother too much
00:17:51
market. Okay, cool. But see, here's the
00:17:53
problem, right? If you're not having any
00:17:54
income source hypothetically then having
00:17:58
real estate commanding rent out of it
00:18:00
what it allows you to do is that it
00:18:01
allows you to get certain or almost
00:18:04
certain cash flows which you can then
00:18:06
deploy in the stock market at the time
00:18:07
of volatility just remind the last 20
00:18:09
seconds try to decode everything I'm
00:18:11
saying this is like very golden things
00:18:13
that I've learned right so I'm sharing
00:18:15
it with you and then you make a call
00:18:17
right so long story short owning real
00:18:19
estate gives you the confidence to take
00:18:21
higher risk in the equity market okay so
00:18:23
the Next point is that in real estate
00:18:24
you need to buy the next big thing not
00:18:26
the current big thing. For example, if
00:18:28
someone is buying around like Jar
00:18:30
airport or whatever, right? Okay.
00:18:31
Airport and everyone like buys there.
00:18:34
Prices have already been inflated and
00:18:36
people are now cutting their things
00:18:38
there. Okay. Then you buy the next big
00:18:40
thing that's the more important thing. I
00:18:42
personally do not speculate because real
00:18:44
estate is a very concentrated bet. So I
00:18:46
don't see a point in speculating based
00:18:48
on news,
00:18:50
right? I mean that's pure speculation
00:18:52
because For example, you might buy
00:18:54
someone will tell you that airport and
00:18:57
you end up buying some land there and
00:18:59
then the government changes the airport
00:19:00
does not come and then you're stuck for
00:19:02
like 10, 15, 20 years because no one is
00:19:05
buying there, no development is
00:19:06
happening then that could be a bad
00:19:08
thing. So I would personally not do
00:19:10
this. I would not personally try to
00:19:11
estimate that okay this is where the
00:19:12
next big thing is going to happen walis
00:19:14
I would rather figure out like some kind
00:19:16
of knowledge alpha within good
00:19:19
structurally good oriented things right
00:19:21
for example again going back to my unit
00:19:24
which is nearkalifa so basically my idea
00:19:26
was very simple that the going PSF is at
00:19:28
least 2500 if I can buy something way
00:19:31
below the market price it will give me
00:19:33
good returns and it ended up giving me
00:19:34
very good returns right so I mean that's
00:19:36
a shot bet so I typically take these
00:19:38
type of shot bets But it depends on what
00:19:40
type of real estate investor you are.
00:19:42
Okay. So then comes the next point that
00:19:44
you need to understand your goal of
00:19:45
investing. For example, if your goal of
00:19:47
investing in real estate is certainty of
00:19:50
cash flow. For example, hey my mom and
00:19:52
dad are like 60. They require like a
00:19:54
source of income. They have loaded. They
00:19:56
are loaded with money. Should they go
00:19:58
and buy geo finance stock? No. Okay.
00:19:59
They should not buy they should not go
00:20:01
and buy geo finance stock. Probably
00:20:03
making some real estate investments kind
00:20:05
of makes sense because you get like
00:20:06
rental income which is very certain so
00:20:08
to say, right? Please research about
00:20:10
tenency laws and all that stuff. Very
00:20:11
important. But long story short, real
00:20:13
estate can give you certaintity of cash
00:20:15
flows. Final point that I'll tell you is
00:20:17
that see in the past getting assured
00:20:21
returns on FD was a great thing. Why?
00:20:24
Because the risk-free rates kind of made
00:20:26
sense in alignment with inflation. For
00:20:28
example, if the FD rates were 6 or 7,
00:20:30
inflation was five and six. So, okay,
00:20:32
net net, it's fine, not a big deal. But
00:20:34
what has happened now is that debt has
00:20:36
been absolutely crushed by inflation. So
00:20:38
if the inflation in the economy is de
00:20:40
facto 8 or 9%, FD post tax is like 4 and
00:20:43
a half 5%, it does not make any sense.
00:20:45
So you have to go to another asset class
00:20:48
which can somewhat give you certaintity
00:20:50
of cash flow and at the same time has
00:20:52
certain opportunity for growth. So real
00:20:54
estate becomes one of those points,
00:20:56
right? So this is like an important bit
00:20:57
that I will share with you. Okay? So I
00:20:59
hope that these points were useful.
00:21:01
There are multiple other points that you
00:21:02
need to be aware of. But I thought that
00:21:04
these are like some critical things that
00:21:05
you should know as a real estate
00:21:07
investor. If you enjoy the video, do
00:21:09
subscribe to the channel and I'll see
00:21:10
you the next time.
