India vs Canada- Real Estate Investment
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This is why I love Candian Desi, so many perspectives and yes even I am leaning towards investing in Canada as it would be more organized and easier to manage...I would thank you all for sharing your knowledge, now comes the part of getting money to Canada..hopefully it should not be very difficult, as I am visiting India next month.
India's property market is kind of saturated now. Its absorbing the recent dramatic gains it has witnessed in the recent past. Though there will be gains going forward but the time lag will be much more than the past. Property price growth in India will far outweigh the pace if growth in Canada.
On contrary Canadian RE is driven up due to lowest ever interest interest rate in the history of Bank of Canada. This can't continue forever. Oil price has already affected the loonie, & an imminent rise in interest rates in US will further devalue the loonie. So buying an overvalued property isn't an ideal utilization if funds.
On contrary, I would suggest to move some money into India's fast growing businesses & let their management make money for you. Like banking (SBI, ICICI, HDFC), Pharma (Sun pharma, Cipla, Lupin, Glenmark), IT (Infosys, Wipro, TCS, HCL Tech, Tech Mahindra), Automobile (Maruti, Tata Motors, Bajaj, Eicher motors), Consumer (Hindustan Unilever, ITC, Dabur, Asian Paints), etc. Over time Indian businesses has a much faster growth potential, & your financial rewards will be very substantial (in the form of dividends & capital appreciation). And its all very regulated, so not even a penny will be lost.
I suggest you open a NRI Demat Account in India, with your Canadian identity, & invest in the best companies of India. The annual dividends will be tax free in India & you can pay whatever tax applicable in Canada& they are credited into your bank account in Canada
SEBI has made very tough regulations, its all directly linked to your bank account, & no one else gets a penny out if it.
These top managements of best businesses I. India will generate lot more wealth than buying a house & collecting rent & calculating few hundred dollars every month.
Quote:
Originally posted by tamilkuravan
Agree with Elmer and with Adam too...
YOu can bring the money and pay off your mortgage. It is a safe bet. But with the interest rates at this low in Caanda, I would agree with Elmer.
See how the town is going to expand and buy land. Buying apartment in India does not get that much returns now (unless it is in specific areas / towns) but RE is the best bet.
Some realtors in India, are selling land with a number of trees planted in it. They will see that these trees are well maintained and that the fruits of the trees will also reach you. These are in the outskirts. They will also leave a portion of land for you in this so that one can build a house.
I like Elmer's option.
There is more one option as your broker is telling you.
Get a second property soley for rental purposes. (in canada). Make portions and rent it. If it is near a college / univ. rent it to students. It will get a good income.
I will just list the rental income that one of my friend in Toronto gets.
He bought a G+2 house (basement +ground +1 floor house) for $ 350 K (very old) in 2007.
Basement to a family - $ 900
Ground floor to a family - $ 1200
First floor (3 bed, 1 washroom + 1 kitchen)- rented to 3 bachelors for $ 400 each. Paid $ 100 to one guy to clean the kitchen and washroom)
Total income - $ 3200
Try this option.
Murali
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It looks great when we just glance over the statement. But, can you tell me where did you get the $3200.00 from, as income from the property? so, I will be in a position to make a valid judgment on the purchase of the property.
You are an Architect, can you tell me how you are going to charge the occupants for the heat, water and electricity. The guy with the 3BR is hogging the building and the other two are rooming, with a shared basement. Do tell me who pays for the heat, water and electricity (Hydro). The guys who pay the rent for occupying the room should get the heat and water for free or include all of the utilities in the rental cost. The proposition needs more scrutiny and the math needs to be done all over again. After that if you find the property is worth buying, then post the idea all over again.
Who says that the Capital gains will be unduly charged here in Canada? Do you know that Canada is considered as a TAX HAVEN all over the world!!.
To correct the statement, the top 50% of the gains will be given to the investor for FREE. The next 50% is charged taxes on it, based upon the so-called marginal rate which could be 22% bracket or 26%, if the total salary hits $89,000/yr.. and if you hit 29%, you are living off the hog. So you do get to hold 71% or better of the capital gains.
Here is another proposition. There are many more investment vehicles available there in the Indian market, such as the TN Government backed securities, which provide a return of 11-12% per annum. then there are some that are risky, but they have been there in business forever, see the link below and also google for high-interest yields. But please do your own due diligence, before you jump into it. If you want to know, most of these investments get sold or oversubscribed on the very first day of issue. Unless you are there in the queue very early, the chances of getting such investments are zilch to nothing.
FH.
Please see the tables.:
http://www.cra-arc.gc.ca/tx/ndvdls/fq/txrts-eng.html
http://www.sundaramfinance.com/products/deposits/depositrates.aspx
Why am I writing all of this so late in the night with my eye propped open with a toothpick? Nothing makes sense.
Quote:
Originally posted by vivek901
This is why I love Candian Desi, so many perspectives and yes even I am leaning towards investing in Canada as it would be more organized and easier to manage...I would thank you all for sharing your knowledge, now comes the part of getting money to Canada..hopefully it should not be very difficult, as I am visiting India next month.
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Yes, it is good to post a query that can generate different views for investing and pick others brain to and find a great solution. But when people post an answer and shoot off in a tangent, and the others praise such a post, and I was hoping that you would be the person who, with great qualifications, to respond to such a post and direct them or guide them and get them in line and correct such a statement and make some sense out of it. I was expecting that you would be the first one to jump on them.
I have seen Real Estate sleuths with programs loaded in their Laptops who do all kind of analysis of the properties on the market, one a lawyer, another a RE agent, and a third one from the Mortgage line of work making a killing here. We are not short of brains here nor are we aiming high as a group. WHY not?
It is my opinion, having landed here in the lala land, want to just hang in there and just enjoy the scenery. The spirit of the great enterprise ended at the CBSA check post when we all crossed the airport boundaries. Or can I compare our bubbling spirits, aptly to "soda water enthusiasm". Which means we are only effervescent just for the first minute and then end up as plain bland water.
The togetherness just ends here.!!!
FH.
https://www.google.ca/search?sclient=psy-ab&biw=1280&bih=913&noj=1&q=camaraderie%3F&oq=camaraderie%3F&gs_l=serp.3..0l10.2736.8587.1.8849.14.12.1.1.1.0.108.1006.9j3.12.0.msedr...0...1c.1.64.serp..0.14.1009.06z_NOvdeH8
don't forget the FOREX conversion in this point too....
Indian Rupee is now more vulnerable than Canadian dollar as compared to US dollar. CAD is already dropped much due to oil & is expected to create a floor within short future.
Whereas India rupee can go & WILL go much lower in the future making you almost loose 10% per year which you earn in interest rate in India.
Remember, Interest rate is high in India for a REASON ?? Believe me making you money is not one of those reason....
Conversion rates as of today
1 CAD - Rs. 49.36
1US - Rs. 62.55
As the CAD stabilizes against US dollar in near future, the rate of CAD to Rs would also go towards Rs.65-70.
Maybe it might take 2-3 years for that, but that would be a loss of 35-40% of your money right on the conversion factor.
So bring the money to CAD....would be my sole advice
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i..........rock........!!!!!
Location: Brampton, Ont, Canada
Posted on: 30-03-15 12:02:39
Quote:
Originally posted by vivek901
Hi,
My parents have inherited a property from my grand parents which they recently sold in India. My parents live in Mumbai and the property was in Chennai and now it has been sold. Would it be a good idea to invest the money again in India or bring it here in Canada and use it as a downpayment and buy a investement property here. The amount of money the property has fetched is 80K $ . It belongs to both me and my brother and both of live here in Canada (myself in TO and he in Ottawa). I was talking to my realtor today and he was suggesting that I am better off bringing that money and add another 20- 25 Kbetween me and my brother and get 20% down for a detatched house in Brampton area such as Mount Pleasant which would cost 450-500K. The rent would be around 1900-2200 depending on the house etc and the mortgage on 350K would be 1600+ 300$ property taxes which is around 1900$ cost. So in general it may not generate a lot of cash flow but definitely build some equity. On the other hand Mumbai offers some investment options such as Airport coming up but since we both are in Canada and would live here we are not sure on what to do. Both of us already own principal residence houses here. So this is purely an investment property.
Go invest in USA - its good growth... Avoid putting money in Canada Real estate - Do it in India if you have close trustful people to take care of needs.
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'Some goals are so worthy, it's glorious even to fail.' (Param Vir Chakra awardee Lt. Manoj Pandey)
Quote:
Originally posted by vivek901
Hi,
My parents have inherited a property from my grand parents which they recently sold in India. My parents live in Mumbai and the property was in Chennai and now it has been sold.
It belongs to both me and my brother and both of live here in Canada (myself in TO and he in Ottawa).
Perhaps a dumb question again - if the property was inherited by your parents, how does the sale proceeds of the property belong to you and your brother?
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Chandresh
Advice is free – lessons I charge for!!
