Last Updated on May 26, 2020 by Gopal Gidwani

The Status Quo
The suspension of everything regular allows us the freedom of re-examining our financial goals. This may absolutely be the right time to start apportioning finances for investment and start segregating them via the lens of time.

Divisioning Goals by the Time Bell
The starting point in goal planning is to begin breaking this up into 3 time stages of short-term, intermediate and long-term.
a) Short terms investments could include the emergency fund which would be immensely useful under the current set of circumstances.
b) Medium term investments could possibly include systematic investment plans, other equity linked saving schemes and even other forms of insurance.
c) Long-term investments would constitute investments in real estate, pension saving plans etc

Short term and even mid-term investments require pre-meditated effort but long-term investments require discipline and this inevitably requires tremendous sacrifice in terms of being invested over a lengthy time frame. The value of sacrifice made can only be understood over time. This brings in an intangible of faith sometimes that is necessary as no one can quite guarantee the returns or how the market can behave in a completely unpredictable manner sometimes.

The Necessity of Sacrifice
Real estate investment requires quite the sacrifice because given the EMIs which most people shell out, it constitutes a fair degree of effort.

It necessitates that discretionary spending gets curtailed to allow the funnelling into long term asset building. Even if examined from a discipline perspective, this is simply an invaluable habit. The option as they say is to pay rent for 25 years or even 35 years before one actually hangs up one’s boots.

The Power of NOW
The quintessential essence of the word NOW is borrowed from Eckhart Tolle when he says that “The only thing that is ultimately real about your journey is the step that you are taking AT THIS MOMENT. That’s all there ever is. Realize deeply that the present moment is all you ever have. Make NOW the primary focus of your life”.

I’ve made a FEW submissions to wrap the essence of NOW in the current environmental context:
a) FALLING INTEREST RATES
Take advantage of the current home loan rates and opt for an adjustable mortgage rate. With interest rates expected to decline further, this is the best time to take advantage of the dwindling interest rates and switch to a repo-linked home loan rate to reduce your interest outgo.

b) TAX PLANNING
Utilize to your advantage the PRINCIPAL + INTEREST components from a tax planning perspective

c) ZERO GOVERNMENT AID
In a country where there is no social security and government pension pay outs, it might be useful to segregate one’s earnings into multiple types of funds under the umbrella of retirement planning

d) MILLENNIALS – ENTREPRENEURIAL AMBITION
A business-friendly climate with options for small sized offices with the capability for modular expansion is ideal. These cater to the aspirational business needs of the small and medium scale entrepreneurs and other start-ups within the eco system.

e) MILLENNIALS – GOAL MULTIPLICITY – NOT WASTING A GOOD CRISIS
Since most younger millennials are single or DINKS and have a preference to stay that way for a while to be able to do those things that they always aspired to do without any dependencies, opting for smaller sized accommodation is advisable. These smaller homes right termed compact urbane condominiums are the preference for these groups.

f) IDENTIFIABLE INVESTMENT BUCKETS
Finally, it is useful to know where your money is going and it may be useful to put these into relevant buckets that you have identified

The Specific Criterion to Evaluating Real Estate Purchase
Considering that there will always be conflicting thoughts as to the timing of their purchase decision, especially amidst this volatility, I felt that the below listed criterion should offer reason to increase their exposure to real estate and to the right developer:
a) Clear segregation of what constitutes core locations and fringe locations
Core locations have existential advantage built in. These are secure and insulate against the risk of buying into peripheral locations

b) Buying into those locations where there is a balance between demand and supply in the market place
A marginal increase in stock added allows for price stability and an obvious protection into future price capitulation

c) Developer & Business credentials
Pedigree, credibility and legacy of the developer

d) Developer & Business outlook
Fiscal prudence and zero deviation to over leverage

e) Developer & Construction track record
Proof of having had ongoing construction uninterrupted even during landmark events of Demonetisation, RERA and GST. Proof of having had projects delivered within the last 6 – 12 months and clear adherence to delivery timelines

f) Developer & Skin in the Game
Significant stake in promoter capital being invested & Construction capital guarantees

g) Proximity to the Central Business District – Is Key
Millennials have several pursuits that are simultaneous other than work and hence are looking to minimize the time that is invested in travel. Travel is a nightmare in this country and this WFH period has proven without a shred of doubt that the levels of productivity are much higher not because one can squeeze in more time but also because so much time is saved which would have otherwise got wasted in commute.

WORD FOR THE FUTURE
As has often been prophesized during this period, “Don’t waste a good crisis”. This kind of an opportunity to buy does not come too often. Therefore, re-examine the opportunity that is being presented or that is within consideration. Re-Imagine the future possibilities and act now.

This is the end of the beginning and not the beginning of the end. The best time to invest in real estate is to invest in a down turn.

Author: Bennett has spent a considerable part of his working and learning in unraveling human insight across a diverse spectrum of business categories through observation, decoding & distilling consumer behavior through their purchase behavioral cycles. As a practicing real estate marketeer, he cross pollinates from different data sets to put out hypotheses and ratify these for marketing and set best-in-class standards for instigating customer attention in a cluttered environment, provoking prospect desire, stimulating customer experiences and engagement through relationship management post sale. Position: Marketing & Brand Head, Duville Estates