Never Tell Me Odds!

A Peep Into Speculative Real Estate Buying.

“There are two great pleasures in gambling: that of winning and that of losing.” - Anonymous

Never tell me the odds, someone once said. For there are none. Not to be seen at least for now.

Ever thought of speculative buying in Real Estate? Well if so many have done it before, why not you? Especially in a highly unorganized market like ours, where burning your fingers is the only way to learn. And you always have to learn it the hard way. Seen the unbridled unrealistic spiraling unreasonable prices in Delhi? What’s there to think! Or there is nothing to think at all! Indian real estate is like that, after all. So get ready to burn your fingers if you’re entering the Indian Real Estate with opaque colored glasses on your eyes.

What is Speculation after all?? Is it investing in residential real estate for long term? Or is it buying a home where you don’t have any plans to live? It can also be a short term gain where you want to buy cheap, add a little value and sell it fast? So what really qualifies as a speculative trading and investment? Users today buy property because they're not sure that they would be able to afford it next month and speculators know that very well. Speculation happens when a certain sect of investors, unlike true investors take risks bigger than their appetite with an aim of trading or reselling the property at a profit in the minimum possible time period. They differ from the Investors who would want to stick along with a property for a longer duration of time.

Speculators always have an important role in boasting the prices with their underwriting and long holding skills. Invariably, it’s for everyone to see that prices are going higher by each passing day only because speculators think they'll always be able to trade for a profit, at any given point of time. But what happens in declining market is, retail or small time investors may not know when to get out and exit gracefully. It becomes difficult to know the peak and the best price to exit. Excessive speculative buying also generates and brings into pipeline the "hidden supply" that could come back to disturb the market and speculators have no option but to offload their units at the best possible rate, setting a chain reaction. As someone rightly described that a speculator is a man who, if he dies at the right time, has a rich widow. So if you are an aspiring speculator, get yourself a plan to exit before you enter.