Mr. Kumar Gera
Chairman

Gera Developers are India's leading Real Estate and Property developers, who have residential as well as commercial projects based in Pune, Goa and Bangalore. With commitment towards innovation, quality and finest customer service, Gera Developments have earned customer's trust, respect and reputation.

In the recent past, Mr. Kumar Gera had been associated with CREDAI as its National President for the last 9 years establishing it as one of India's foremost Association in the Real Estate sector.

Magicbricks.com organized a small talk session with Mr. Kumar Gera, on the topic - "how to make safe property investments" and have the following questions answered the renowned stalwart.

Topic: How to make Safe Property Investments


Date: 26th April, 2011

Following are the questions answered by Mr. Kumar Gera:

Anirudh: In the current scenario when property prices are climbing once again and multiple options are available to the buyer within a given budget, what is the way to ensure that one has made a sound buying decision?
Mr. Gera: The current scenario is not connected with the answer. Whatever the scenario, whether it is a rising market or a steady one - sound buying decisions will always be the same. It is necessary to identify these sound buying decisions before proceeding.
Preeti: With all the speculation in the rates and taxes and additional overheads and hidden charges, where and how do salaried people buy homes for themselves?
Mr. Gera: Preeti, this is an excellent question. Rising input costs, ranging from inflation to continuous increase level of taxation, duties and levies is a matter of continuous concern. The Government (state, centre and the local authority) is significantly responsible for this continuous increase. The best solution is to take quick action based on your affordability.


Nikhil Alekar: There is a lot of talk about impending price correction in the real estate market. But on ground, no such signs are visible. In fact, prices are moving only in the upward direction. What are your views on this, specifically for residential property in Mumbai?
Mr. Gera: Nikhil, prices vary based on the micro-markets. These variations are dependent upon the quantity of supply vs. demand (linked to prevailing prices). In addition to this, often the media starts projecting a particular viewpoint or a desire which may not necessarily be based upon micro-markets but may be based at the macro level.
Agarwala: Which type of property yields maximum returns - Multi-storey apartments or normal residential? Do you think that any correction is possible in the current rate in Mumbai in the Kandivali area?
Mr. Gera: To give a general response to which type of property yields the maximum returns is not possible. Returns are based on possible appreciation and on acquisition prices on a case-to-case basis. Regarding correction in the current rate in Mumbai - yes, I am sure there will be a correction; the question is will it correct upwards or downwards.
Mausam Kukreja: Hello, if my mom sells her property and puts the cash in my account then what taxes do I need to pay?
Mr. Gera: You will have to deal with capital gains and gift tax in addition to the stamp duty applicable on the sale. It is always a good idea to consult a competent chartered accountant. In your specific case, you may be entitled to certain other benefits which arise on a case-to-case basis.
Debankur: I have a very personal question. I am working in Malaysia right now. But I am planning to go back to India in about 5 year's time. I want to invest in a property so that when I go back to India I can get good returns and can buy a good property for staying. What kind of property should I go for - Residential apartment, Commercial, Land or Villa?
Mr. Gera: My advice to you would be to invest with a reliable developer in a villa scheme or in a residential apartment (depending upon your choice of city and desired investment). It should also be a property that can be leased easily till such time as you come and occupy it. Hopefully by the time you occupy it, if you have chosen well, the value could be more than double.
Bhupendra: Namaste! I would like to invest in Pune for rental purpose as I am in transferable central government service. I have zeroed in on a property in SUS Road (about 2-3 km from the highway) in a 1 BHK (565 sq ft) for about Rs 17 lakh. What is the future of the area within a time horizon of 8 years? Can you suggest any other areas/projects in the same budget?
Mr. Gera: Expect a ROI of about 4% per annum on your investment. Choose a locality that you would like to live in yourself.
Meghna: How can a consumer find if the developer has got all approvals from the concerned authority? What are the main things he should be looking into? I am from Bangalore looking to buy in North Bangalore near Hennur. Most of the property is not BBMPA approved but is under the Panchayat. Is it worthwhile and safe to buy such a land?
Mr. Gera: It is a buyer's right to ask for all copies of all approvals which can be verified by the buyer's lawyer. This is the best way forward.
Hagendazen: Sir, what are your views on the future prospects of Kharadi in Pune?
Mr. Gera: My Company is heavily invested in Kharadi and I am of the opinion that this will be one of the best micro-markets of Pune in the coming years.
Kishor: Hello, this is Kishor with you from Muscat. I am an NRI looking for investment opportunities.
Mr. Gera: There are numerous good opportunities. My suggestion would be to do your homework thoroughly and then take a call.
Amit K: Should we go for a flat or an independent house? Which will have good returns? What documents do I need to check for a flat or independent house? Can I buy a site which is not developed now? Please advice on buying property. Thanks in advance.
Mr. Gera: If you can afford an independent house, it is always a better option. Ensure the quality of the land in terms of title etc. Use a competent attorney to validate the documents.
Refhounds: Is agricultural land a good investment option?
Mr. Gera: When you buy vacant land, it requires a lot of looking after. In terms of security, clearances and title, it is always a good investment option depending upon prices, location and future development of the area.
Sethuraam: Dear Kumar Gera, I own a property of 5.25 cents in a prime location, SB Colony, Coimbatore. I am interested in going for a joint venture for building apartments. Is it possible to do so in that size of a plot? Right now, I have my house there. Please guide me in this regard. Thanks and regards.
Mr. Gera: You will have to look for a local dependable developer who may be interested in this JV.
Shivangini: There is a strong rumor that property prices will go down in a month's time by 20 per cent. How true is that? I am looking to buy a house.
Mr. Gera: There are all kinds of rumors that float around. I do not get carried away by these rumors. Currently, there are no logical reasons in the country for something like this to be expected.
Rana Jayendra Singh: I am an Indian citizen - a native of Kanpur (UP), but born, brought up, educated and self employed in Vadodara, Gujarat. I am willing to buy agricultural land in Gujarat for farming /livestock purpose. Is there any restriction in purchasing land on ownership basis? If yes, then what is the procedure for buying agricultural land in Gujarat? Thanks.
Mr. Gera: I would suggest you check this out carefully with a competent lawyer who practices in the area where you are looking for this land. Local laws in micro-markets vary across the country.
Guru talk: I have purchased a property about 20 years ago. Five years after my purchase, the land owner, who sold the land to me, resold it to someone else. The 2nd purchaser also got mutation like me and is now trying to have possession of the same. What is the legal complication and what should I do to have safe custody of the land?
Mr. Gera: Get yourself a competent lawyer asap. Do not compromise on "competent".
Mohammed Asad: Sir, I am looking for a land in Kolkata to build a residential property for my living and my budget for the land is Rs 20 to 25 lakh. I require a 4 to 5 katha plot near Newtown, Rajarhat or Central Kolkata. I am looking for a good investment in real estate to get good return for limited period. Please advice.
Mr. Gera: Do your homework, study the local market in great detail. Meet reliable developers and then take a call.
Rajesh Pala: I am looking to invest for a small period of 2 years and then re-sell and re-invest in a much larger project. My current location for investment is Nagpur and then later Pune. Kindly suggest some good properties.
Mr. Gera: Nagpur and Pune, both are full of options, with varying sizes and price points. It is only when you mention the price and location that some suggestions can be given.
Ashok Narladkar: Hi, I have joined a job in Hyderabad in February 2011 and am thinking of buying a flat here. What do you think about the "Telangana issue" effect on the real estate and industries?
Mr. Gera: It is a matter of concern. However, if you are planning to use it yourself, then go ahead. If you are looking at it as an investment option, look for an opportunity at a good price, if you are willing to take the risks.
Mohd Sajid Khan: Hello Sir, I'm looking for safe property investment through bank loan. And then I am planning to put that property on rent for support in paying the EMI. Is it safe or not?
Mr. Gera: This is a route followed by many people and is extremely successful. The rental income helps to pay the EMI. You should do your planning in such a manner that in case the property falls vacant, you have the ability to keep paying the EMIs to the bank.
Rupesh: Hi, I am looking for a 2 BHK flat in WadegaonSheri, Viman Nagar, Vishrantwadi area in Pune. Should I go for a new flat or resale?
Mr. Gera: Each offers its own advantages. New properties come with modern amenities and facilities whereas, re-sale properties sometimes have the benefit of lower property taxes. This is an individual preference, choose the property that you prefer.
Sarat: How dependable and legal are "assured returns with bank guarantee" promises? Some of them say they would issue 36 months postdated checks for the promised amount.
Mr. Gera: Get this verified by a lawyer. Many customers in the past have been let down by "dream offers". Check the credibility, solvency and track record of the developer before investing in the scheme.
aa95000: Does Gera have a presence in NCR? I am looking to invest there.
Mr. Gera: No, we do not have a presence there at the moment. Currently, we are present in Pune and Goa and soon we will be in Bangalore.
Guru talk: I have purchased a property about 20 years ago. Five years after my purchase, the land owner, who sold the land to me, resold it to someone else. The 2nd purchaser also got mutation like me and is now trying to have possession of the same. What is the legal complication and what should I do to have safe custody of the land? It is an agricultural land. What should I do?
Mr. Gera: A similar query has been answered above.
Sanjay: What legal documents do I need to check before buying a commercial space?
Mr. Gera: Please consult a competent lawyer who is practicing in that micro-market where you wish to purchase.
Scott Patterson: I am interested in purchasing a Bungalow in Goa. How can I transfer funds without regular bank mortgages etc? I do not need to take a bank loan from an Indian Bank. I have funds ready in Canada and wish to pay by draft or cheque to the owner, obviously through a lawyer in India. Please advice.
Mr. Gera: At present, the Government has taken a harsh view against foreigners purchasing in Goa, unless they are entitled to do so under certain rules and regulations of the RBI. Consulting a lawyer (based in Goa) conversant with these issues is the right way to go.
Jolly: Sir, I am planning to buy a residential property in Bangalore. The properties which I am getting have B Khata/CMC Khata. Please let me know whether it is safe to invest in these properties? I approached many banks and they are also not issuing loan for these properties, except a few. How safe is it to invest in these properties?
Mr. Gera: In general, if numerous banks have any hesitation or reservation in advancing loans for any reason, it is a good idea to avoid such properties.
NS: Dear Sir, how do you see the prospect of investing in a commercial office space in Pune?
Mr. Gera: I would be bullish on this for the simple reason that Pune has all the signs of continuous and steady growth in coming years.
Rupesh: Thanks for replying. When I saw some re-sale flats, the price is same as the new flats. Whenever I see new flats, the location is far from the city. I am looking for a good location. That is why I can only choose re-sale. Please advice.
Mr. Gera: It is not a bad idea.
Praveen: Please advise me on some good upcoming projects in Pune, especially on the Mundhwa and Nagar Road side.
Mr. Gera: There are many of us developers offering projects in Mundhwa and in the Nagar Road area.
Dad: I would like to buy a property in Cochin. Please advice
Mr. Gera: Hello Dad, do contact the members of CREDAI Kochi, I am sure you will get a large choice.
Acm: In the circumstance of high inflation and rising interest rates, is it proper to buy a new property? Or instead of buying property, should one take a flat on rent?
Mr. Gera: In my opinion, buying a property is a better option. Keep in mind that the high inflation will also affect the price of the property. You are better-off locking in a price today.
jahnabi01: Hello Mr. Gera. I am deciding between investing in a plot of land in New Gurgaon or an apartment in Gurgaon. Which will be a wise decision, considering volatility of the property market?
Mr. Gera: I would choose a plot of land in Gurgaon provided I can be sure of the title and security of the plot. My choice is based on long-term appreciation.
AKT: Service charge levied by the Central Government on a house purchased under construction [construction linked plan] is absolutely cheating the common man by the Government. What "Service" the builder or the Government is providing to a house purchaser in this scheme? Purchaser pays money as construction progresses to avoid risk of losing all if the total amount is paid in advance. The builders' Association/Unions in Delhi, NCR have not protested. Builders in Maharashtra have filed a case in High Court. DLF in Delhi goes on collecting this Service Charge. Some other builders are not charging yet! What will be the outcome for house purchasers if Maharashtra HC strikes down this "Service Charge" as wrong? Will that be binding on all states? Or will buyers in each State have to file a separate case in each state? Will DLF return the Service charge if Maharashtra Court rules it wrong? What action should the individual buyers take?
Mr. Gera: Different states across India are reacting differently to this issue of service tax. I agree with you that the levy of service tax in the case of purchase of property, which in fact falls under transfer of property and attracts stamp duty etc, is not correct. However, the Government seems determined to levy this tax. What each individual should do would depend upon the situation in the state (with respect to court rulings) and with respect to the developer's agreement conditions. What any individual developer will or will not do is not something that I could comment upon.
Gautam: Sir, I have a 5 acre agricultural land on Rewari-Behror (Rajasthan) Road. The land needs a huge investment to utilize and I was planning to sell it. Is this the right decision or shall I wait for some time? I want some earning out of it. Please suggest.
Mr. Gera: Gautam, before you take the decision, try and find out if there is going to be any significant change in and around the locality where your plot is in the next couple of years. The change I refer to is in terms of infrastructure or any new enterprises coming up around you. If there is a likely positive change then wait, if not then my advice would be to sell.
Sandeep: Is investment in Neharpar area projects (Other than BPTP, Omaxe, Ferrous etc big projects) in Faridabad safe?
Mr. Gera: Unfortunately I am not familiar with the Neharpar area.
Lait Mehta: According to newspaper reports, huge recovery of loans from real estate firms would affect the reduction of prices overall. What is your opinion on the issue? Should genuine users wait and take benefit of same? And within what period will that happen?
Mr. Gera: The newspaper reports on real estate are often based on the publicly listed real estate companies. The overall market being developed by these publically listed companies is about 10% of the total market and the balance 90% is developed by non-listed real estate developers. The tightness, if any, of finance is a variable condition from developer to developer. I would therefore not expect any kind of macro change as we witnessed in 2008.
Srirama Chinchalkar: Since last December, the experts say that the residential property is due for a real correction in Mumbai/Mumbai suburbs. This has compelled the middle class flat buyers to postpone their decision to a future date. Nothing has happened but for some small discounts/freebies. Is the price correction really going to happen?
Mr. Gera: I very much doubt any significant price correction to be in the offing.
Srini: Is it okay to invest in a project (with 180 apartments) that will take more than 2 years to complete?
Mr. Gera: Yes it is, provided you have confidence in the developer and have checked out the terms and conditions, sanctions, the track record and credibility of the developer. You should also ensure that all installments payable are linked to progress of your flat/building and are not date based.
Sanjay: I want to buy a commercial property in the range of Rs 25 lakh. Should I go for assured returns on property in the IT space or lockable office space without returns?
Mr. Gera: It is better to go for assured returns as long as the appreciation of the property is to your account.
VS Kumar: How can we select a property for investment purposes? And how do we calculate that a particular property has achieved the maximum profit to sell it off?
Mr. Gera: This selection should be done by studying the locality or area surrounding the project. What is its future growth? Secondly, one needs to study the quality of development and track record (as referred to in other responses) of the developer. Purchasing a property that is safe and gets a good return requires a lot of study and effort. Do not take shortcuts.
NS: Sir, do you see any revised corrections by the end of this year, especially in the Pune real-estate market or do you think it will remain steady in the coming months? I want to invest funds. Please advise whether investing in commercial office space will be a better option than residential?
Mr. Gera: Pune is a good market and worthy of investing in. Choosing between residential and commercial will depend upon the object of investment.
Aadi Mehta: Sir, should I wait for a few months as I have to buy a property in Hadapsar area?
Mr. Gera: Why do you want to wait? Do your homework and go ahead.
Aadi mehta: Will the property price in Pune go down?
Mr. Gera: There are no signs that would indicate valid reasons for prices to go down. On the contrary, with land parcels reducing, inflation taking place and input costs rising - all indications that the movement will be upwards and not downwards.
jahnabi01: Thank you Mr. Gera for your reply. According to you, long-term would mean how many years?
Mr. Gera: Real estate is an asset class that should always be looked at as a long-term investment over a 10 year period.
Abhijit: I'd like to know if buying a site in a BDA layout (for instance Banashankari 6th stage) in Bangalore is a good option from an investment viewpoint. Note that the layout is at least 3-4 years away from development, sufficient enough to allow for construction of houses/flats etc.
Mr. Gera: I would suggest do an assessment of today's price and what you feel (after consulting others) the price would be after 5 years. This analysis should be based on how the area (in a 3 km radius) will change in this period. Then take your call.
Kity: I need to purchase a property in Whitefield. Please advice.
Mr. Gera: Whitefield area has gone through a number of ups and downs. It has also been impacted by the shift of the Bangalore airport. Nevertheless, it is fundamentally a very good area with all the required infrastructure and proximity to the CBD. So I would look for a good deal and go ahead.
Acm: Which area is better for investment in North Ahmedabad in Gujarat - Motera or Chandkheda?
Mr. Gera: I would choose North Ahmedabad.
Sandeep Chopra: Dear Mr. Gera, what is the emerging property scenario in and around Chandigarh? Will the market stabilize or continue to rise? What is the future of upcoming townships like Mullanpur? Thanks!
Mr. Gera: While I am not familiar with these townships, I would just like to inform you that in the next 15-20 years many of our urban centers will see a phenomenal growth in the urban population. Keep this in mind while taking your call.
Ramchandra: Sir, I have Rs 50 lakh after selling my property. Please advise me where to purchase for good appreciation and rental value? Sir, I have the following choices
(a) 1 unit of 1 BHK at Royal Palms in Aarey Milk Colony
(b) 2 units of 1 BHK at Bhayander West near Salasar bus depot
(c) 4 units of 1 BHK at Panvel or New Panvel.
Mr. Gera: Take your decision based on a careful study of the three options and how you see the change in these areas over the next 5/10 years. This requires some careful study and research.
Deepak s: Hello Sir, I am in the middle-class space with good amount of savings but not good enough to buy a house unless I take a large loan. Given the high price scenario and possibly limited upside, do you think it is a good idea to invest in a house with a large loan or is there any other way to stay invested in this space like REIT etc? Please advice.
Mr. Gera: Deepak, if you can service the loan and if you do your homework as I have mentioned in my response to some of the other queries, then go ahead and take the large loan and buy the house.
Sushant Narlawar: In some of the cases, builders are charging more per sq ft rate than the Government existing rate, is this legal?
Mr. Gera: Yes, it is absolutely legal. The Government circle rates are for the purpose of stamp duty.
Sushant Narlawar: Looking at the current scenario, construction needs to done keeping natural disasters in mind. Are the builders considering the same?
Mr. Gera: All good developers are required to construct with structural designs provided that are based on latest IS standards. These standards do incorporate specifications for earthquake, fire, etc.
Amey Devrukhkar: I want to buy a property for investment purposes. Can you specify some under-developed or upcoming locations to invest in? My budget is max Rs 27 lakh. Also, I want to know about Ulwe and Taloja locations in Navi Mumbai?
Mr. Gera: These are good areas particularly for your budget. I would go ahead and make the purchase but please study the local market, study your options carefully, do your homework and then take the call.
Shashi: How is Mysore as an investment option? What is the best option between the two mentioned below:
(a) 2 BHK apartment, 1200 sq ft
(b) Plot approx 1200 sq ft?
Mr. Gera: Mysore is a good market. Between the two I would choose the plot provided I am 100% sure about the title and long-term security of the plot and also about the surrounding developments. These surrounding developments should add value to my plot and not devalue it.
Sreyoshi: Hi Mr. Gera. In resale property, sometimes the seller charges some amount in cash and the remaining amount in cheque. Also, he will not give any written evidence for the amount which he charges in cash. Is it okay to move ahead and buy such a property?
Mr. Gera: I would generally avoid such transactions because, let us be clear, they are illegal. If you still choose to do so, please make sure that you get the possession of your unit on making such cash payment.
Sunil: Sir, the sale of a property (apartment) is based on built-up area. What is the ratio of built-up area versus carpet area? I heard that in future the value of a property is going to be based on carpet area and not built-up area. Is it true?
Mr. Gera: Buyers should ask the builder as to what is the exact carpet area. They should ask for this to be mentioned in the agreement or on the plan. The transaction may be based on a rate of built-up or super-built, however as long as the carpet area is spelt out there is transparency in the transaction.
Mrs. Raj Sharma: Hello sir, I am a senior citizen aged 75 years. Sir, recently I sold my property after 15 years and have around Rs 45 lakh. Presently, I am in a very confused state of mind regarding the areas to invest my money in Mumbai, for the long term. I want to get good appreciation and good rent. Sir, please advice on the places I can invest in. I was considering Panvel, Royal Palms at Aarey Colony or Bhayender West.
Mr. Gera: Please keep in mind that leasing a property requires work to be done. There can be short-term leases which require constant change of occupant, negotiations, agreements to be signed etc. At the change of every occupant the unit would need some attention. I would look at this option if I have the appetite for this kind of work or if I have somebody reliable to assist me. I would then choose a place that is closest to where I stay.
Sushil Singh: Which is the best location in Pune for investment purpose?
Mr. Gera: You can consider Kharadi, Baner and Bavdhan.
Mrs. Desai: I own a flat in Nerul but want to buy a flat in Pune. What is the best way to avoid double taxations, levies and brokerages?
Mr. Gera: Avoid brokerage by doing your homework and search yourself. Nothing else can be saved.


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