. If you buy two properties and have one daughter then don't be surprised that your future son-in-law asking for one property transferred into his name as part of dowry. There are endless possibilities that life can throw at you and you cannot duck under these problems because your property is a visible asset. Being a visible property, jealous people can cause damage to your property (steal water meter if located outside of your house, paint election advertisement or break windows). Just like China encroaches into Indian border to obtain concessions, the threat of damage to your property will always loom on top of your head when you interact with your neighbors/local community because relocating in case of trouble may not be an easy option.
I am not a great fan of real estate investment because of high emotional cost these investments involve. Let's say, you invest in two properties where you do not live and these properties are vacant. Now, every month you have to visit these properties just to see if no one broke into the flats/home to live there. If you have water connection then you may have to check if there is no water pipe breakage that has flooded the flat.
Let's say that you have rented these properties. Now, you have to worry about collecting rent, listening to excuses if someone is not able to pay rent or go through the hassle to get an insolvent tenant vacated. After vacating a tenant, you then have to find a new tenant by advertising, interviewing and checking references. It will be a job without a pay.
Let's say that you have bought two adjacent apartments in Delhi. You live in one and the apartment next to you is vacant. Well, all of a sudden you will have relatives who want to vacation in Delhi and live in your vacant apartment for free! These frequent visits will increase your electricity and water bills. The word of mouth will only spread where other relatives or their friends would want to stay in your vacant apartment.
To protect your properties, you will have to pay property insurance etc. Also, real-estate is not risk free. When you are going to sell these properties, you will meet bunch of cheapsters who will try to negotiate price as low as possible. Most of north India is earthquake prone. It is nice that everything looks great but, unless you take insurance that covers your property value without the fine print excluding any acts of god, your entire investment may be wiped off in one earthquake. Real-estate also costs money to maintain. If fully furnished, you will need to spend approximately 1-2% of property value in maintenance cost (painting, replacing A/C every 10 years, washing machine, refrigerator etc.). The monsoons will rotten the wood on window frames every 10-15 years unless you use weather proof siding. Roofs can start leaking requiring repairs. Poor ventilation can lead to mold formation. Also, in worst cases you may have infestation (bed bugs may be brought in by visitors) that may require expensive treatments. If you buy properties in distant city then you will have to hire and pay a property manager to maintain the property for you (and hope that he does not abuse the terms).
Real estate is also visible property that cannot be hidden. If you were to have two kids who will get married in future then anticipate inheritance wars in your old age. If living under one roof (likely because India's population in 20-25 years will be 1.5-1.6 billion), you may see things getting worse where your kids may kick you out due to their wives' nagging for more space in house
All these risks are manageable if you plan on buying one apartment/home where you will live. Only then it may be an OK investment. Under the circumstances, I would buy one flat for 20-30 Lakhs and invest remaining 10-20 Lakhs in non-real estate investment vehicles. Ideally, I will never invest more than 25% of my net worth into real estate because real estate is not a liquid asset. When time comes to sell, you may not have buyers or buyers may not be willing to buy at the price you are selling. With stocks and bonds or even gold, you always know the market price down to every second. If real-estate buying or selling was so easy, safe and profitable then people would quit financial markets and flip homes. Also you have to worry about indian land mafia and its goons who may cause trouble to make you sell your property to them especially when property prices in and around your residence skyrocket. Real estate buying and selling requires a lot of paper work (title transfers) where you will have to lubricate indian bureaucratic machine by paying all kinds of bribes so that the machine works smoothly and efficiently for you. To avoid being a victim of fraud, you need to hire a good lawyer to verify every transaction.
There is one way to avoid all the problems and still invest in real-estate like investing in stocks and that way is through real estate investment trusts (REIT). Unfortunately, India is not a country where there are clear guidelines governing such trusts. It is possible that such offerings may become possible in near future (http://www.business-standard.com/article/companies/reit-s-may-solve-india-s-real-estate-problem-knight-frank-research-113022700199_1.html) and, when these funds become available, that may be the best option to invest in real-estate. Atleast this is how I invest in the real-estate sector. A few Indian REITs were floated in International markets and no one was too optimistic about the future of Indian real estate in part because of India's poor record with permit dealings (ranking 182 out of 185 countries) and lukewarm real-estate market growth due to high price uncertainty and generally low returns in last five years (which may be due to lack of clear REIT guidelines or general corruption in Indian real-estate sector).
I am not a great fan of real estate investment because of high emotional cost these investments involve. Let's say, you invest in two properties where you do not live and these properties are vacant. Now, every month you have to visit these properties just to see if no one broke into the flats/home to live there. If you have water connection then you may have to check if there is no water pipe breakage that has flooded the flat.
Let's say that you have rented these properties. Now, you have to worry about collecting rent, listening to excuses if someone is not able to pay rent or go through the hassle to get an insolvent tenant vacated. After vacating a tenant, you then have to find a new tenant by advertising, interviewing and checking references. It will be a job without a pay.
Let's say that you have bought two adjacent apartments in Delhi. You live in one and the apartment next to you is vacant. Well, all of a sudden you will have relatives who want to vacation in Delhi and live in your vacant apartment for free! These frequent visits will increase your electricity and water bills. The word of mouth will only spread where other relatives or their friends would want to stay in your vacant apartment.
To protect your properties, you will have to pay property insurance etc. Also, real-estate is not risk free. When you are going to sell these properties, you will meet bunch of cheapsters who will try to negotiate price as low as possible. Most of north India is earthquake prone. It is nice that everything looks great but, unless you take insurance that covers your property value without the fine print excluding any acts of god, your entire investment may be wiped off in one earthquake. Real-estate also costs money to maintain. If fully furnished, you will need to spend approximately 1-2% of property value in maintenance cost (painting, replacing A/C every 10 years, washing machine, refrigerator etc.). The monsoons will rotten the wood on window frames every 10-15 years unless you use weather proof siding. Roofs can start leaking requiring repairs. Poor ventilation can lead to mold formation. Also, in worst cases you may have infestation (bed bugs may be brought in by visitors) that may require expensive treatments. If you buy properties in distant city then you will have to hire and pay a property manager to maintain the property for you (and hope that he does not abuse the terms).
Real estate is also visible property that cannot be hidden. If you were to have two kids who will get married in future then anticipate inheritance wars in your old age. If living under one roof (likely because India's population in 20-25 years will be 1.5-1.6 billion), you may see things getting worse where your kids may kick you out due to their wives' nagging for more space in house
All these risks are manageable if you plan on buying one apartment/home where you will live. Only then it may be an OK investment. Under the circumstances, I would buy one flat for 20-30 Lakhs and invest remaining 10-20 Lakhs in non-real estate investment vehicles. Ideally, I will never invest more than 25% of my net worth into real estate because real estate is not a liquid asset. When time comes to sell, you may not have buyers or buyers may not be willing to buy at the price you are selling. With stocks and bonds or even gold, you always know the market price down to every second. If real-estate buying or selling was so easy, safe and profitable then people would quit financial markets and flip homes. Also you have to worry about indian land mafia and its goons who may cause trouble to make you sell your property to them especially when property prices in and around your residence skyrocket. Real estate buying and selling requires a lot of paper work (title transfers) where you will have to lubricate indian bureaucratic machine by paying all kinds of bribes so that the machine works smoothly and efficiently for you. To avoid being a victim of fraud, you need to hire a good lawyer to verify every transaction.
There is one way to avoid all the problems and still invest in real-estate like investing in stocks and that way is through real estate investment trusts (REIT). Unfortunately, India is not a country where there are clear guidelines governing such trusts. It is possible that such offerings may become possible in near future (http://www.business-standard.com/article/companies/reit-s-may-solve-india-s-real-estate-problem-knight-frank-research-113022700199_1.html) and, when these funds become available, that may be the best option to invest in real-estate. Atleast this is how I invest in the real-estate sector. A few Indian REITs were floated in International markets and no one was too optimistic about the future of Indian real estate in part because of India's poor record with permit dealings (ranking 182 out of 185 countries) and lukewarm real-estate market growth due to high price uncertainty and generally low returns in last five years (which may be due to lack of clear REIT guidelines or general corruption in Indian real-estate sector).
Don't put all the eggs in one basket.
Actually i put up at Mayur vihar-3,so anything near noida,gaziabad will be preferable but safer in terms of investment..