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Antifragile - Are we | Real Estate. Nicholas Taleb in his book “Anti Fragile” writes about systems which can withstand shocks and emerge better after such shocks. He, in fact, advocates that systems should be subjected to regular stress agents to improve their capabilities and robustness. Two very important developments happened in the Banking system in the Feb 2018. 1. The RBI decided to not allow banks to roll over NPAs by cosmetic changes in their books. 2. They debarred the practice of Debt Restructuring which was practiced by a lot of fancy sounding names such as strategic debt restructuring, a scheme for the sustainable structuring of stressed assets etc. These schemes were nothing but machinations by the banks to keep rolling over bad assets on their books and keep fooling the shareholders. Challenging the intellect of the investors Now, this was a malaise which has essentially plagued the Indian Economy.
This activity has essentially two effects Yes. Is our banking system fail-proof? Such is the lure of easy money. Living in the mythical stereotyped Financial World. ARE YOU A SMART BUYER? Most of us, in our lifetime, are able to sell one or at max two skills and/or group of products. Say most of us would either be a Doctor, Advocate, Engineer, Businessperson, Accountant etc and that is how we will earn our livelihood. Hence the vocation we pursue will allow the inflows in our balance sheet.
Same would be true for businesses. On the other hand, rest everything we need to “Buy”. We get “Paid” for one skill or product and for everything else we need to pay. Let us go back to what we do for getting “paid”? Don’t a lot of us, when dealing with a client/customer, tend to exaggerate, even if wee-bit? Don’t we make claims without verifying if the same can be actually done? Now we would not do more soul searching lest one should start feeling guilty. Most of us pick these “selling tricks” by practice and not really putting any thought into it.
Have you not been made to believe that you need an anti-dandruff shampoo with no real evidence of the shampoo solving anything? INVEST, strength by strength! REAL ESTATE COMMON BUYING ERRORS. CASE STUDY "NEW GURGAON MICRO MARKET" RERA IS NOT THE MAGIC PILL. ANTIFRAGILE – ARE WE? ARE TRUMP TOWERS TRUMPING ENOUGH? Guarding the Guards – when Government turns offender! WHEN GOVERNMENTS FAIL THEIR PEOPLE. Guarding the Guards – when Government turns offender! WHEN GOVERNMENTS FAIL THEIR PEOPLE. ANTIFRAGILE – ARE WE? ARE TRUMP TOWERS TRUMPING ENOUGH? Guarding the Guards – when Government turns offender! WHEN GOVERNMENTS FAIL THEIR PEOPLE. The Awakening – Financial Nirvana! HOW SAVING AND INVESTING REWIRES BRAIN. PRICE TRAP: AFTER THOUGHT CHARGES. Olivegreenrealt. Real Estate | Did Haryana Government get it right | Olive Green Realty. Real Estate, a Lifetime Asset | Signature Global: Sorted or Camouflaged | Gurugram, NCR | Olive Green Realty.
Real Estate- Blind investments or a Blind You? | Olive Green Realty. Wealthy & wise – you are in for a Surprise! | Olive Green Realty. Real Estate buyer & investors | Trap ALERT - Hidden Charges | Olive Green Realty. Real Estate | Builders | Trap ALERT - Super Area | Gurugram | Olive Green Realty. When people use ADJECTIVES, it means that they have run short of putting across their view point objectively. I am sure this term SUPER AREA too would have come in vogue when a great marketing brain of real estate industry would have coined it to present it positively in front of the buyer who would have been clueless about the extra cost being charged on the area he was not getting.
Confused? Well, read on! Builders often resort to Price Traps. We addressed six such traps earlier, Today we discuss about another one – SUPER AREA. The recently notified RERA, Real Estate Regulatory Authority, bill brings about a very major transparent change in the way Real Estate has been sold hitherto in India. The developers introduced a term “Super Area” which was supposed to cover the carpet area, area under the walls, the common areas (staircases, corridors, club houses, parking, walkaways, entrance lobbies, lift shafts etc. etc.) etc. Super Area Example of what was practiced! Questions a buyer must ask.
PRICE TRAP: INCREASE IN SUPER AREA | Olive Green Realty. Golden Rules of Property Investments. Try not to get at excessively built up and indicated 'Best areas'. Updates areintended to move at your enthusiastic and optimistic strings to help make the deal. Generally, there are no good areas yet just great costs and great items. Buyfor a thorough understanding of Builder's funds - either through experts or by reading up information in the monetary dailies, industry journals, share rankings (if these are publicly recorded/real estate companies) and other data sources in public domain. This will go far in ensuringwellbeing of your investments. Keep in mind a hungry man has no morals. Purchase leveraged however will not over use one's capability. Pick your real estate broker wisely.
Do notsearch out first class builders in just about any general area. Understand theconstruction quality and strategies in detail. With these general rules of thumb, you are now better prepared for your foray into Real Estate Investments. Top Real Estate Advisory Firm in Gurugram, India | Olive Green Realty. Top Real Estate Advisory Firm in Gurugram, India | Olive Green Realty. Realty Check | Olive Green Realty. Road To Riches | Olive Green Realty. Olive Green Realty — General guidelines for Real Estate Investments. Land Pooling Scheme- A Big Trap. Delhi is among the 10 most thickly populated cities in the world. This makes lodging in the city a monumental test. Quality and reasonable lodging is a fantasy that usually goes unsatisfied. Dwarka, a moderately new residential project, has a cost of 70+ lakhs for a little DDA constructed 2 BHK flat – a major sum for an extremely essential quality small apartment.
Envision a man out in the sun on the sunniest June day for 7 straight hours. Indeed, even his saliva has become scarce and all of a sudden a cordial looking fashionable man offers him a bottle of cold water. Just that the jug is bound with poison keeping in mind the end goal to ransack the man of his belonging. A purchaser experiences similar feelings as the man who had been out in the sun and has been offered a bottle of icy water.
Too bad this was a trap. Alert TO INVESTORS: Dear readers, regardless of how alluring such offers may appear at first glance, please watch yourselves against falling for such traps. Can Haryana’s new licensing policy boost its realty market? Olive Green Realty — Real Estate Titanic set to sink again in India. Price Trap Alert! It is a cat and mouse game. Traps are being set by the developers to extract more from you yet giving ceaselessly almost no in value. We tended to three Price Traps prior, 1. The Big Brand Builders 2. 3. Today, we address the fourth Price Trap – Cosmetic Improvement in Design. Fashion versus Real Estate Sometime in the past bright colored Bell Bottoms and significantly brighter flared Shirt collars used to be a range.
A mere passing prevailing fashion and that's it! What stands the trial of time are the Classics. Fashion is generally more costly as well. Is there Fashion in Real Estate as well? Have you at any point run over these prevailing fashions in Real Estate? 1. 2.Roman/Gothic Architecture. 3. 4. There could be various such "styles" which one goes over in building design. In the past a manufacturer guaranteed that no two apartments were same in the design. You got it right, the project name was SPIRE SOUTH: MeraGhar, MeriMarzi Ask yourself before Investing 1. 2.
How to compare? PRICE TRAP FIVE – THE VALUE TRAP – Olive Green Realty. Price Trap Three – Heavy Marketing Push – Olive Green Realty. Price Trap Two – LOCATION. – Olive Green Realty. The ‘BIG BRAND BUILDER’ Trap – Part 2 – Olive Green Realty. Price Trap One – ‘Big Brand’ Builders. – Olive Green Realty. Key to Profitable Investment in Real Estate. – Olive Green Realty. Don’t Time the market, Price the market. – Olive Green Realty. Rules of Thumb for Real Estate Investments – Olive Green Realty.
REAL ESTATE TITANIC & WHY IT WILL SINK TOO, UNLESS… – Olive Green Realty. ‘No Home, No EMI’ – Safeguard a Buyer against dubious Builders – Olive Green Realty. ‘Affordable Housing Schemes’ – what they don’t tell you – Olive Green Realty. RERA Act 2017 Continued… – Olive Green Realty. A society that protects the rights of its minorities is the one that truly prospers. The smallest minority in any society is the Individual. Formulation of contracts and enforcement of contracts is what keeps the economic life going and this in turns ensures that the society progresses towards better things.
Now these are broad statements and the execution is extremely difficult and expensive. Therefore, enactment of RERA Act has been the first step in enfranchising and thereby empowering an individual buyer. I share my wish-list of a few additional clauses in the RERA Act that I would like to see included going forward. I hope some ‘consumer right’ activist(s) will take up the cause. 1. 2. 3. 4. 5. 6. 7. 8. 9. There are reservations in some quarters that buyers will now try to exploit developers, taking refuge in certain clauses in RERA.
However, the positive implications of levelling of the playfield owing to this act far outweigh any suggested negatives. Cleaner & Transparent markets. Real Estate Regulatory Authority (RERA) Act 2017 – An Introduction – Olive Green Realty. LAND POOLING SCHEMES (L Zone, P Zone etc.) – Olive Green Realty. An Asset that can set you up for life. – Olive Green Realty. Safety before Growth – Olive Green Realty. Secure Self First Before we start walking down the path of investments and growth, we should first secure our most important resource, ourselves. As a former army officer, I am big on safety. I would not enter a battle without being properly kitted and without being adequately protected. Similarly before investments and wealth creation, one should protect oneself with adequate insurance – life and health. I must put a disclaimer before moving ahead. I do not sell insurance for a living and this blog is not sponsored by anyone related to the insurance industry.
With that out of the way, there are a few rules while buying insurance one should be aware of. Guidelines while buying Insurance 1. 2. 3. Absolute musts 1. 2. It is therefore in your best interest to be absolutely clear about the purpose an insurance instrument is meant to serve and finalize on one accordingly. Patience is a virtue. Are your ‘Investments’ making you poor? – Olive Green Realty. First Five Steps to Wealth Creation – Olive Green Realty. The Game Changer – Olive Green Realty. Personal Finances – What we usually do The approach to our personal finances is usually in the sequence illustrated above. We spend from the money we earn. We then decide to save/invest from the residual income, if any. And after years of painfully slow accumulation, if our investments start giving us returns, we promptly reward ourselves with more purchases. Although our income grows as we gain more experience at our work, achieve seniority, improve our skills and our sphere of influence, it is often closely followed by an increase in our spending, but rarely by a proportional increase in our savings.
And the reason is this flawed formula we follow in our personal finances. Parkinson’s law takes charge of our personal finances, where expenses expand to consume any increase in income. Personal Finances – How it should be The Road to Riches truly starts with a correction in our Personal Finances formula, where we start respecting the most scarce of man-made resources, ‘Money’. Decoding Spending – Olive Green Realty. I left you with an exercise in my last blog – to help you identify the two key frailties we humans suffer from in our spending behavior. One, Impulse Spending and two, Buying to Impress. And these eat into our ever elusive ‘investible surplus’. In the next blog we will be addressing this erroneous formula of Income-Spending-Saving, which usually is at the heart of our ‘savings’ problem. But for now, let’s focus on our human frailties, which are leaving us in this state of financial want. Impulse Spending Please stop making impulse purchases. In an impulse purchase our human mind experiences the same “Dopamine” surge that a drug addict experiences after a hit.
Buying to Impress The need to look sexier, fairer, stronger, richer, more desirable are the emotions advertisers and brands play with to sell us things we don’t need. The Unconscious Spend This is the third kind of (over)spending that we usually sleep-walk through and which goes un-noticed. 1. 2. It all adds up. The Moment of Truth – Olive Green Realty. In this blog, I will take you through a quick exercise and then leave you with a small assignment at the end, which may well change the way you look at your finances. Let’s get started Let us assume a salaried household with an income that would put it in the middle to upper-middle income bracket. Let us also assume that this household is financially healthy and leads a very balanced life. In other words, this household allocates its income correctly to meet its financial goals without being qualified as a ‘miser’ or ‘not living in the present’. As a guiding principal, what is the ideal allocation of income being done by this financially prudent household?
The seemingly simple concepts outlined in my blogs thus far – if implemented with all sincerity – are guaranteed to cause discomfort. Now, having measured and classified your expenses as outlined in the earlier two blogs, how does your classification measure up against this ideal yardstick? The ‘Ideal’ Gap A Small Task 1. 2. What after ‘Step One’? – Olive Green Realty. Good Health and Good Wealth have lot of parallels. Taking forward my analogy with food from blog 1, we can classify all our expenses under four broad heads, each corresponding to a class of nutrients: 1.
Regular Expenses = Carbohydrates 2. Capital Expenses = Fats 3. Let me explain. Regular Expenses are all running expenses to maintain a household, such as provisions, utilities, school fee, taxes etc. Now, carefully examine the record of expenses being maintained and classify each expense under one of the four expense heads without worrying about the quantum being recorded Why are we doing this exercise? My reservation with most financial literature is that it focuses – and often time fixates – too much on the best ways to invest.
An analogy is the various physical activities people talk about for keeping healthy and fit. The struggle most individuals and households face is at the initial stage of having to create this investable surplus. In order to Create, we must first focus on Spends. Step One – What is measured, can be managed – Olive Green Realty. The Vigneshwara Developers – Olive Green Realty. M3M Golf Estate – Olive Green Realty. One of the largest and most reputed (I would prefer the word ‘known’) developer, DLF, changed the perception and positioning of Apartments to ‘luxury residential living’ with its projects ‘Aralias’ and ‘Magnolias’ along the Golf Course Road in Gurugram. It is also to DLF’s credit that they developed a world-class Golf Course at the location.
Riding high on their success came an imitator, a hitherto unknown M3M and launched its project M3M Golf Estate. The project’s launch party was the talk of town with flowing single malts and gyrating belly dancers (especially flown in from the Middle East). It is a good product – as a stand-alone project – provided its development is as promised. However, a comparison with DLF Golf Links (a term used for the area encompassing Aralias, Magnolias and the Golf Course) would be odious. The year was 2010 and the Real Estate market was in a frenzy.
What ensued put paid to any sane thought. ERA (renamed ADEL) Landmarks – Olive Green Realty. Central Park Resorts, Gurugram – Olive Green Realty. Godrej Frontier, Gurgaon – Olive Green Realty. • Almost on time delivery • Tolerable customer experience • Acceptable build quality • Appreciation has not been as expected • Finishing leaves room for improvement • Godrej could have been more open in information sharing with the buyers • The Carpet area to Super area ratio (‘Loading’ or ‘Efficiency’ in industry Jargon) could have been better • With a financially sound and process oriented builder like Godrej, deliveries are made to buyers without much inconvenience • However, a trade-off for investors buying into projects from such Ivy League or A-Lister developers is that they get charged a premium for the brand name, which drives down the potential to earn higher returns. For example, a similar project by a relatively unknown developer could have been purchased for INR 2,800-3,000 per sq ft (and with lower side additional charges), increasing the earning potential for an investor.
Olive Green Realty – : Honesty : Transparency : Thoroughness.