Ongoing MHADA FLAT Scheme--- A lottery, nothing to Loose

Today I am about to share my experience and information about MHADA scheme, which is a Lucratively profitable Investment Opportunity.

The trigger to write about this is Current Ongoing MHADA scheme which till Saturday 30th Jan.

This is my third encounter of investment in MHADA scheme.
The first one was when we (my family) had bought a place in Oshiwara, Mumbai for my brother’s nursing home in 2005 via bidding process.

The second time was in Jan 2009 when they had invited Interested buyer to apply for the HOUSING UNIT( Apartment) and we had applied to it.

I just thought it appropriate to mention to let the readers know that I have gone through the complete procedure of theirs.



Key Highlights ofthe current scheme:

Scheme Name: MHADA Housing scheme Jan 2010
Approximates Units for Sale: 1800
Key Locations in scheme in Mumbai:
Pratiksha nagar (behind sion koliwada) tejbahadur railway station ,
Ghatkopar Canara Engineering
Powai
Bimbisar Nagar ( between Goregaon and Andheri on Highway)
Lokhandwala ( Swami Samarth Circle, or 10 mins drive from Dhirubhai Hospital)
Dindoshi , Goregaon Film City road ..near raheja s/w park

Last Date Of Application: 30th Jan
Forms Available at and To be submitted at: Saraswat Bank Ltd


They have defined 4 income groups for which they have decided 4 category of tenement type based on Salary or Income ( Professional or Business)


IncomeGrp^^IncomGrpNos^^^Monthly Income range ***Approx EMD
EWS^^^^^^^^ 01 ^^^^^^^^Rs 0000 to Rs 8000 ******RS 10000
LIG^^^^^^^^ 02 ^^^^^^^^Rs 8000 to Rs 12000 ******RS 15000
MIG^^^^^^^^ 03 ^^^^^^^^Rs 12001 to Rs 20000 ******RS 25000
HIG^^^^^^^^ 04 ^^^^^^^^More than Rs 20001 ******RS 50000 / 100000

I presume many of you fall under HIG income group ( where the salary of either and Individual or with his/her spouse is more than 20k) hence focus my article to their probable benefits.

Why MHADA flats are good Investment what are its PROS and CONS
Obivioulsy PROS outshadows the CONS is reason for Investment


Pros
• Clear title
• Good discount to market price
• Good Locations
• Standard Loading on Carpet Area ( no irrationally exuberant loading like recent trend)
• OK construction quality ( some might find this slightly crazy to put “Ok quality “ as pro but many builders provide pathetic quality of construction which might initially appear aesthetically appealing but later comes as unpleasant surprise) .
• In most of the investment cases MHADA investment turnout to be a fruitful investment from Rental Income Opportunity point of view.
• Cluster Development
• Relatively easy for bank loans

Cons
• 5 years Lock-In ( cannot sell flats immediately ..but people do sell it by power-of-attorney before completion of maturity period which has its own disadv and risks)
• Information Booklet is in Marathi Only
• Lack in Aesthetics both Interior and Exterior, Misses wow factor and amenities (tilings, fittings etc).
• Parking Issues
• No customer service
• Need to do little bit of running around in Mhada office and various department ( not very difficult but slightly irritating)
• Procedure of allotment is always matter of Doubt...but off late thanks to computerised process of Lottery Allotment has reduced the scope of Scrupulous manipulation of allotment to great extent .
( Jan 2009 the program for Lottery ie random selection of Application form was designed by TCS and NASSCOM)
• Delay in receipt of refund of Earnest Money Deposit (EMD) in few cases when application is not selected.
(EMD is the token amount paid in lieu of your expression of Intent to Buy property)

Tenetive Upside in Investment based on Scheme Price and Current Price of similar MHADA tenament in same vicinity.( generally in MHADA flat there is 25% Plus loading on Carpet Area whereas other builder load 32-40%)

Scheme--------------- Powai are 690 sqft builtUp
Prevailing Price --- approx 52-55 lacs
MHADA scheme Price--- approx 32lacs

Scheme--------------- Versova are 700 sqft Built Up
Prevailing Price --- approx 65-70lacs
MHADA scheme Price--- approx 48lacs

Scheme--------------- Pratiksha Nagar are 571 sqft Built Up
Prevailing Price --- approx 42 lacs
MHADA scheme Price--- approx 25 lacs

Scheme--------------- Dindoshi are 571 sqft Built Up
Prevailing Price --- approx 36-38 lacs
MHADA scheme Price--- approx 25 lacs

(The above indicative market price are sourced from real estate brokers in the above location in Jan 2010 yet one may confirm the same for its validity and correctness)

Conclusion
The above tenements might not be bes for personal stay/ Use but they surely offer good upside to your investment looking at prevalent prices of MHADA flat in same location.

Also these investments earn good rentals hence better return on investment.

Lastly these opportunity come with benefits Margin of safety if any downside of prices in Real Estate in recessionary times.

Beacuse you never know till when the UPSIDE trend in Property Prices may continue..............





Disclaimer:
The above article putforth my personal views.All investments involve different degrees of risk. You should be aware of your risk tolerance level and financial situations at all times. You are free at all times to accept or reject all investment views and ideas