Strategic Investments in Under-Construction Flats: Can ₹20 Lakh Turn into ₹1 Crore?
A fintech influencer highlights how strategic timing and leverage in real estate investments can turn a ₹20 lakh investment into ₹1 crore. Learn the key insights and strategies for maximizing returns.
Real EstateUnderconstruction FlatsInvestment StrategiesProperty AppreciationDue DiligenceReal EstateMay 18, 2025
Hegde emphasized that while real estate can be a slow-moving asset, savvy investors know how to maximize returns through strategic timing and leverage. He explained that experienced investors enter projects early when prices are at their lowest and use construction-linked loans to reduce initial cash outflow. This approach allows them to benefit from the appreciation curve without tying up excessive capital. 'If you play it like the pros, it’s high-leverage, high-upside, timed risk,' he noted.
To illustrate his point, Hegde shared a recent visit to Hyderabad, where he met with a developer building over 10,000 homes and achieving sales of ₹6,000 crore. He wanted to understand the strategies that real estate investors use to achieve 2X, 3X, and even 5X returns. 'The common belief is that property takes decades to appreciate and requires huge capital upfront. But seasoned investors use timing and leverage to their advantage,' Hegde explained.
One of the key strategies is to buy during the excavation stage, which often provides the highest upside in real estate. At this early phase, prices are at their lowest, and investors who enter at this point stand to gain the most as the project progresses. 'In one project I recently saw in Hyderabad, flats that were priced at ₹1.2 crore during the early stage appreciated to ₹2.2 crore by the time construction was completed. That’s a ₹1 crore gain in just four years,' Hegde wrote.
However, Hegde also cautioned against chasing finished flats, which can often mean 'ready-to-trap-yourself.' He pointed out that while ready-to-move-in properties might seem attractive, they can lock your capital and offer modest returns. 'With rental yields hovering around just 2–3%, the cash flow does not justify the high entry cost,' he added.
Another critical aspect of investing in under-construction properties is the risk associated with the builder. Approximately 30% of under-construction properties in India face delays, leading to financial strain for buyers. Hegde emphasized the importance of conducting thorough due diligence on the builder before making any investment. 'Start by studying their past projects—have they completed similar developments successfully? Look for scale continuity: are they consistently growing and delivering, or are they jumping between one-off projects? And most importantly, understand how they fund their construction—a builder with a clear financing cycle is far more likely to complete the project as promised,' he wrote.
In conclusion, strategic investments in under-construction flats can offer significant returns, but they require careful planning, timing, and due diligence. By following these insights, investors can potentially turn a ₹20 lakh investment into ₹1 crore and more.
Frequently Asked Questions
What is the main advantage of investing in under-construction flats?
The main advantage is the potential for high returns due to property appreciation. Entering early when prices are low and using construction-linked loans can minimize initial outflow, allowing investors to benefit from the appreciation curve without tying up excessive capital.
Why is timing important in real estate investments?
Timing is crucial because entering early in the construction phase, such as during the excavation stage, often provides the highest upside. Prices are typically lower, and investors can capitalize on the appreciation as the project progresses.
What are the risks of investing in under-construction flats?
The primary risks include project delays, financial strain, and potential financial losses. It is essential to conduct thorough due diligence on the builder, including their past projects, scale continuity, and financing methods, to mitigate these risks.
How can investors minimize the risks associated with under-construction properties?
Investors can minimize risks by thoroughly researching the builder, ensuring they have a track record of successful projects, consistent growth, and a clear financing cycle. This due diligence helps ensure the project is completed as promised.
Why should investors be cautious about ready-to-move-in properties?
Ready-to-move-in properties can lock up a significant amount of capital and offer modest returns. Rental yields are typically low, and the cash flow does not justify the high entry cost, making them less attractive compared to under-construction properties.
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