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Valuation of Property in India – Key Factors

Real Estate

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January 30, 2013

Investment in Property can generate good returns for the investor. However, you need to be careful in the selection of property. While buying and selling real estate, the valuation of property is extremely important. If you are planning to invest in real estate or if you have already invested your money in real estate you might be worried about pricing part of property.

We are herewith an article focusing on the factors that affect the pricing or valuation of property in India.

Valuation of Property in India

Location and amenities

Location
Buildings, real estate, and properties, located in commercial and market areas or in the vicinity of schools, colleges, or posh areas, hold higher valuations. It is common to find brokers quoting a higher price for buildings in well-developed and approved colonies and areas as against those in the less developed and upcoming areas.

Amenities
The valuation of properties with better infrastructural capabilities and modern amenities are costlier than those that fail to provide proper electric connections, telephone lines, water sewerage facilities, and all other infrastructure such as community centers, clubhouses, children’s play areas, swimming pools, gymnasiums, parking lots or general stores, etc. Valuation of property is clearly based on the availability of necessities and facilities connected with comfortable housing.

Infrastructure

Infrastructural development is one of the most important factors which influence real estate prices in India. The presence of roads, airports, flyovers, malls bus terminals, and other facilities in the vicinity of the property, helps in value escalation of the same.

It is a known fact that connectivity is one of the most important requirements for investors looking to purchase land or property. This leads to the concept which explains a rise in the valuation of property that is well connected to entertainment hubs, medical facilities, educational institutions, retail markets, and business centers, along with other day-to-day facilities.

Commercial real estate

Places such as Noida, Gurgaon, Pune, Hyderabad, Navi Mumbai, and Andheri-Borivili in Mumbai, are striking examples of commercial development which have affected the valuation of property in these areas.

The development of malls, IT offices, and Special Economic Zones near residential areas helps cut down the time and energy wasted in commuting to workplaces and increase the price of real estate in the area.

Disposable income and availability of land

Disposable Income

Properties that are located in agricultural areas or those dominated by manufacturing units attract a lower price than those situated near the IT hubs. The valuation of property is in direct proportion to the quantum of disposable income in the hands of the purchaser or the majority of the population in that area.

Availability of land

In places where there is ample land available for residential purposes or the development of real estate, the graph reflecting the valuation of property shows a slower rise than in areas where land is comparatively scarce.

Demand and Supply

Demand for real estate in a particular area is inversely proportional to its supply. As the supply or availability of real estate decreases, the valuation of property increases.

Changes in population are the key drivers of demand. Along with an increase in the number of people inhabiting a particular area, the popularity of a particular locality in terms of people wanting to be a part of the locality also increases its price.

Affordability

Affordability refers to the cost incurred by the owner in the process of enjoying or retaining a property. In layman’s terms, it is the term that establishes a relationship between interest rates, property prices, and maintenance costs.

If any of the above three variables reach their maximum level in a particular area, then the inhabitants start looking towards a better lifestyle elsewhere.

Structure

The valuation of property is dependent on the specifications of materials used, layout, design, durability, and life cycle of the building.

The quality and cost of materials during construction, size, current rates of labor, frontage, and other physical attributes such as roof covering, height of the building, type of foundation, waterproofing, and plinth level, also affect the price of a particular property.

Customization

The cost of real estate becomes higher in the event of builders undertaking customization of residential space on the lines of the purchaser’s requirements. For example, some investors may want landscaped terraces or verandahs connected with their apartments, upgraded kitchens, specifically designed internal stairways in duplex apartments, higher quality paint and flooring, or other user-defined changes.

This leads to an escalation in the ultimate price charged to the buyer. Before making their real estate purchase decisions, investors should conduct an analysis of these drivers to get a fair valuation of the property that interests them. Careful investigation and homework can lead to better returns, easy liquidity, and more lucrative investments.

What is required for Balance Successful life?

Personal Finance

Shitanshu Kapadia

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January 24, 2013

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What is required for Balance Successful life?

The world has transformed amazingly in past few decades. Today, money is considered as the most essential part of our lives. People are ready to do anything for money.

Every person has a different opinion about money but the most common derivation of each view is ‘Yes money is everything’. And your success is defined by how much money you earn. So success is synonyms of money for many. Everything that we do today is mostly for the sake of making more money. So sound philosophy is Successful life = More Money.

I simply disagree with this fact. Money is not everything for successful life. Basic Ingredients of Balance successful life apart from money are:-

Time:-

First ingredient of balance successful life is time. I have seen many people who said to be successful but they always runs out of the time. They always remain busy in one or other activity. They spend their life time in order to earn money. They end up in making more money but they run out of time to spend this money. Money can be earned but time cannot be. Imagine person earning lakhs of rupees per month but not spending quality time with Family.

This time and money make vicious circle called as “Time Trap” & most of the people cannot come out from this circle.

So money is important but time is equally important.

Happiness:-

Second thing you require in balance successful life is happiness. Remember with more money you can purchase more things but cannot purchase happiness, it is something internal.

If you earn more money by getting promotion or by making good business deal this will cause happiness but this happiness will be momentarily. It does not bring constant sense of joy. Part of the reason is that you don’t know what to do with this additional money.

Financial Security:-

Third important thing for balance successful life is financial security. In other word one should reach to condition of having the resources or money to support a standard of living now and in the foreseeable future.

Most of people agree with me here that if they do job or business way they are doing currently till retirement age also they won’t be financially secure. You have to plan your future income to become financially secure.

Peace of Mind:-

Forth important thing which is required for balance successful life is peace of mind.

A peaceful mind will tell you what you have to do, how to make use of your skills, how to improve upon what you possess and what are the things you are short of. In today’s world money and peace of mind is opposite to each other. Person who has lot of money does not have time, happiness and peace of mind.

Satisfaction:-

Satisfaction in life is another important thing. If I will ask you that how many of you are satisfied in job or business you are doing? Mostly your answer will be negative.

So point is you are not satisfied in work or business you cannot say that you are living successful life.

Fame & Recognition:-

Another thing which is required for balance successful life is fame and recognition. This may not be mandatory but you can place this in good to have category.

It gives another set of feeling if you are well known personality. This could not be that important for balance successful life but you can’t ignore it.

Freedom:-

Most important ingredient for balance successful life is freedom. Freedom is the condition of being free and the power to act or speak or think without restraint.

Freedom is important to everyone. If someone is deprived from this innate right, he will definitely feel as if he is not a respectful human being.

Typical example is people who are doing Job most of the time it is observed that whatever work they are doing they are not doing with freedom. They are being derived by superior or boss.

Now as we know basic elements of Balance successful life let us try to find out who is living balance successful life, most of people I come across are missing one or other component mentioned above.

If we take example of Super star Amitabh bacchan most of people agree that he is successful, yes indeed he is successful but still basic ingredients of balance successful life like Time & Financial security is lacking in his life.

Write us at info@moneyexcel.com to know about new part time zero investment business opportunity for balance successful life.

5 Secretes that make Rakesh Jhunjhunwala Successful Investor

Stock Market

Shitanshu Kapadia

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January 18, 2013

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Big Bull Badshah of Dalal Street Rakesh Jhunjhunwala needs no introduction he is known as the stock guru and warren buffet of India. By profession, Rakesh Jhunjhunwala is a qualified Chartered accountant. He started his investment in the stock market when BSE Sensex was at 150 in 1985. He started his investment with 5000 Rs/- and now his portfolio worth is more than 33350 Cr. He passed away on 14th Aug, 2022. Now, his wife manages his portfolio as a partner in his asset management firm, Rare Enterprises. Jhunjhunwala’s portfolio of stocks is tracked religiously by many followers.

Rakesh jhunjhunwala is indeed a successful stock market investor. So the question arises what are the things/qualities that make Rakesh Jhunjhunwala a successful & billionaire Investor?

India has many so-called stock experts, traders stock analysts but none of the traders or stock analysts are as successful as Rakesh Jhunjhunwala. So with close observation, I could locate the following 5 secrets that make Rakesh Jhunjhunwala a successful billionaire Investor.

5 Secretes that make Rakesh Jhunjhunwala Successful Investor

#1 Capital

To make money you need money, this may not be true in many cases but in the case of the stock market, you need a lot of capital to become a zero to hero or to become a successful billionaire Investor.

But another big thing is capital can be made also. This is what Rakesh jhunjhunwala has done. How he has gone from a starting capital of Rs 5,000 to a net worth of a few thousand crore rupees is now the stuff of urban legend.

Rakesh Jhunjhunwala said in one of his interviews – “I had no capital when I came to the markets, and no father gifts and no father-in-law gifts. So I had to earn the capital to invest. How do you invest if you don’t have the capital? And I got the capital by doing future trading.”

In 1985 when Rakesh Jhunjhunwala started 5,000 Rs/- was said to be good capital for investment today you at least required 2-3 Lakh as initial capital to start investing in the stock market.

#2 Knowledge

In today’s world for every business or job, you need relevant experience and skills. Without knowledge and experience, one cannot get a good job or cannot establish a good business. The same is true in the case of investment & stock market.

You require specific knowledge and skill sets to become successful like Rakesh Jhunjhunwala.

Rakesh Jhunjhunwala said “Markets are about money, but markets are also about knowledge. Markets are also about egos; markets are also about the satisfaction of having been proved right. Especially, when that right is from an original thought and not from a guided source or following somebody.”

You need to do a lot of research, a lot of data gathering, and a lot of knowledge accumulation before investing in the stock market.

#3 Right time Right Decision

For every investment you make a time of investment matters, especially in the stock market, you have to be selective and have to pick the right stock at the right time. Rakesh Jhunjhunwala is the master of that, he picks the correct stock at the correct time.

He made his first big profit of Rs 0.5 million in 1986 when he sold 5,000 shares of Tata Tea at a price of Rs 143 which he had purchased for Rs 43 a share just 3 months prior. Between 1986 and 1989 he earned Rs 20-25 lakhs. His first major successful bet was the iron mining company Sesa Goa. He bought 4 lakh shares of Sesa Goa in forward trading, worth Rs 1 crore, and sold about 2-2.5 lakh shares at Rs 60-65 and another 1 lakh at Rs 150-175. The price rose to Rs 2200 and he sold some shares.

So right from the beginning, he has the quality to select the right stock and click the correct deal at the correct time. This is an important quality to become successful in the stock market.

#4 Patience

Controlling emotion and keeping patience is extremely important in the stock market. The stock market moves upward as well as downwards. During a downtrend or during a market crash one should maintain patience. In other words, one should have faith in investments made in stocks.

Jhunjhunwala’s stocks fell by up to 30% in December 2011. But he has the quality to keep patience and that patience pays its fruit. He recovered his losses in February 2012. This year his portfolio has given around 35% returns.

#5 Vision

I believe that if a person can dream up something he/she can do it. It may take time and effort and persistence but it’s not impossible. I believe dreams are worth fighting for because they are a representation of our truest selves and our innate abilities.

In the words of Industrialist Dhirubhai Ambani “Only when you dream it you can do it.” Or “For those who dare to dream, there is a whole world to win!”

According to me, Rakesh Jhunjhunwala is a visionary. He started with a capital of Rs 5,000 in 1985 and now in 2022, he is sitting on a portfolio worth 33350 Cr. To start with Rs 5,000 and to reach Rs 33000 Cr in the stock market is indomitable. He sees Dreams and can turn a dream into reality.

To be successful in the stock market like Rakesh Jhunjhunwala one must have a vision.

There could be many other factors responsible for the success of Rakesh Jhunjhunwala but preliminary I could find the above 5 things that make him successful in the stock market.

60 Inspiring Quotes & Tips by Rakesh Jhunjhunwala

Investment Philosophy of Rakesh Jhunjhunwala

Rakesh Jhnunjhunwala’s stock-picking strategy is influenced by George Soros’s trading strategies and Marc Faber’s analysis of economic history. He endorses the rule, “The trend is your friend.”

His investment philosophy says “Buy right and hold tight”.

He admits to having been a bear in the Harshad Mehta days and believes that investors should be like chameleons. He has said that the markets are temples of capitalism and believes that they are the ultimate arbiters.

He claims to base his trades, in part, on the business model of a company, its growth potential, and its potential for longevity. He factors in heavily the competitive ability, scalability, and management quality of the enterprise. The entrepreneur, according to Jhunjhunwala, makes an invaluable difference to his expected investment returns. According to Jhunjhunwala, believing in the vision and the beliefs of the entrepreneur and evaluating risks that may not be perceived by the entrepreneur are key success factors for a trader.

Final Words

In end I would like to share with you a famous quote from Evan Esar on Success

“Success is the good fortune that comes from aspiration, desperation, perspiration, and inspiration.”

10 Money Mantras – 2013

Personal Finance

Shitanshu Kapadia

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January 11, 2013

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Money is vital need today for everyone. Anything and everything is purchased by money except love. 2013 is begin and we are herewith 10 Money mantras of 2013. Following these money mantras will help you in achieving financial freedom.

Making more money:-

Very simple and basic rule to follow this year is making more money or try to find out way to make more money. One can make more money by doing additional task (Working extra mile) or can make more money by doing work smartly.

The important thing is to find the best way for you to make more money, and then to build your goals around this. For making more money you can use these simple money making ideas.

Your Money Mantra: ‘I will make Rs.______ extra money every month!’

Protecting your money:-

Once you earn your money, you need to hold onto it. Protecting your money is another mantra this year. Many people earn money and make money but they are poor at protecting money. I am not talking about theft. I am talking about protecting your money from unwanted expense, taxes, brokerage and additional charges. Remember small charges that adds up to big money.

Your Money Mantra: ‘I will protect my money from unwanted expenses and taxes’

Budgeting your money:-

If you are not budgeting your money these year you must start budgeting your money, Budgeting money will give idea about your spending habit and your limit. If you are facing budget crunch there are two ways to solve it decrease you’re spending or increase your income. Either will erase a budget deficit. In the long run, increasing income is a better solution.

Your Money Mantra: ‘I will budget money for my need’

Leveraging your money:-

Extra money in your pocket should pull extra money or how surplus money you have is generating more money is called as leveraging your money. It is often thought of as doing more with less. If you put your money in a bank deposit, it is very safe but you don’t get a real lot out of that leverage decision. However, if you decided to invest same money in investment class which can give more return like equity or real estate, you have got more leverage out of your money.

Your Money Mantra: ‘I will leverage my surplus money to earn more money’

Improving your financial information:-

Financial information doesn’t just mean knowledge of basic financial concepts — it also means detailed knowledge of the investments you make.

Warren Buffett is the most successful investor of all time, yet he never takes a gamble. He conducts extensive research before buying a company. Obtaining this information allows them to invest with confidence. This year you must try improving financial information about asset class where you invest your money.

Your Money Mantra: ‘I will improve my financial knowledge about product where I invest my money’

Setting Smart Goal:-

Knowledge is Power. Once you ‘know’, you can ‘do’.

If you want to retire, start figuring out when. Say to yourself ‘I want to retire in __ years, I want to live a lifestyle of Rs. _________ per month’ and start working towards it!

Remember to keep in mind inflation.

If something costs Rs. 10,000 today, and we assume 8% inflation per year, then in 10 years it will cost Rs. 21,589. This means that simply to keep pace with inflation your money must earn 8% return, wherever it is invested. And if you want to do more than just keep pace, you must earn more than 8% per annum over the long term.

Your Money Mantra: ‘I will have S.M.A.R.T financial goals!’

Saving more money every month:-

The best way to figure out how much more you can save every month, is to look at your budgets of the past 6 months. But there might be a problem. Most of us don’t keep budgets.

Here’s a little tip: look at your bank statements of the last 6 months – they won’t tell you everything but they will show you broadly what your spending habits have been like, and if you have been using your credit or debit card more than cash, then you will have a clearer picture.

Use very simple categories – groceries, utilities bills, travel & conveyance, medical, house & vehicle maintenance, shopping, insurance premiums (includes life, non-life, vehicle and any other insurance you have, take the per annum premium and divide by 12), eating out & entertainment, and 1 or 2 other categories if you need them.

You might find that you are spending more on medical expenses than you thought, or more on entertainment and eating out. The best way to save money is cut down on unnecessary expenses. Even if you save Rs. 3,000 per month and invest it, over 30 years you can earn Rs. 2.07 crores (assuming 15% return per year).

Your Money Mantra: ‘I will save Rs. ____ more every month!’

Make your Finance Easier:-

The trick to making things easier is just to get organized once. Once is all it takes to get everything set up, and then you can sit back and relax.

So, sit down right now, and make a list of the bills you are paying. From electricity to gas to family cell phone bills, you can have a combined list, and if you have the option of making it an online payment (direct debit), do so. You can still check your bills every month when you receive them, but you save yourself the hassle of remembering to write cheques, standing in queues, and having to take hours off work to do it.

Your Money Mantra: ‘I will get more organized today!’

Maximizing Tax Saving:-

One should find out way to maximize tax saving in alignment with goals. It is imperative that you start with the tax planning activity right from the beginning of the financial year, rather than towards the end. The tax saved can be invested towards achievement of your crucial goals such as children education, their marriage, your retirement and your other financial goals.

Your Money Mantra: ‘This year I will save tax effectively and prudently’

Taking help from Financial Expert:-

Let’s face it. If you want your car serviced, you’re going to go to a service center you trust. If you have a medical concern, you’ll go to the best doctor you can find. Self-service only works sometimes on matters which do not require expert opinion. But in certain matters where you need to obtain expert opinion; you must! You must hire a financial planner to plan your finances. The clarity, the benefits, and the feeling of control over your financial life will make you wonder why you never did this before!

Your Money Mantra: ‘I will hire a financial expert this year’

These 10 money mantras are short, easy and very, powerful.

Don’t wait. Don’t think ‘I’ll do this tomorrow’, because postponement can disrupt the objective of putting your finances right. So you need to do it now – do it today!

To summarize 10 Money Mantras of 2013 are:-