Ghode bechke Sona!
There is a wealth of meaning in the phrase “ghode bechke sona”. Presumably in medieval times, it referred to a “horse” trader, who having cashed out , now enjoys a well deserved siesta. We are envious about people who can achieve this state, but each one of us knows of friends/ relatives who after attaining the age of 60 + “carry on investing”.
I refer to Senior Citizens who continue to dabble in Real Estate, when they would be better off consolidating their Wealth and “enjoying” their riches rather than “transacting”. I am a professional in the Real Estate space and presently have two “elderly” clients who have invested money in Real Estate and hit by a sudden need for liquidity are desperately trying to knock off their Real Estate holdings. The irony is that these were investments, made recently (after the age of 65) which were strictly avoidable. They made their choice without proper counsel and while they chose a good project, they chose apartments on higher floors, which are difficult to sell in a slow market. It has been a good twelve months, but no headway has been made. In the meanwhile, one of them has been diagnosed with Cancer, adding to the woes.
Paradoxically, as we try to sell desperately, prospects become more suspicious instead of grabbing a lucrative offer. What is even more surprising is that the money which they invested was sufficient by itself to look after their needs for a very long time. The ideal situation would have been for them to invest in Bank fixed deposits and avoid the tension and running around for which they are clearly ill equipped. When they pass away, it will be easier for their heirs to handle the money.
The rest of the family does not share their enthusiasm for Real Estate and complex dealings. The situation becomes worse if their Children are abroad, and they make it clear that they have no interest in India or Indian Real Estate. We can safely assume that a tremendously large number of real estate is held in the names of people who have passed away, leaving behind valuable assets for which there are no claimants . The accumulation of this Real Estate would have been made by making enormous sacrifices.
There was a recent news item about an elderly gentleman was found murdered along with his secretary, neighbours and family say they had told him repeatedly to be careful. Reportedly, the buyer has offered Rs 45 crore for it. While the seller was thrilled about the deal, people around him were wary “No matter how good the property was, it wasn’t worth more than Rs 20 crore. We had tried to tell him that the buyer didn’t seem genuine as the amount he was offering seemed excessive. But the seller told us everything was under control,” said a friend who did not wish to be named.
The family has told the police that the gentleman was very money-minded and seldom kept in touch with them. “The family said that despite having so much money he would wear old, tattered clothes and eat in cheap restaurants.
“He was very stingy with money” said an officer. Though he did not mingle much, either in Pune or Mumbai, he would tell his close friends about how he had acquired a lot of wealth by investing smartly in real estate and disposing some of his ancestral property.
After reading the news item, one wonders at the stupidity of people. At the age of 83, with all the wealth at his disposal, he should have been chilling out. Instead, he met with a sad and violent death.
We are all mortal and decisions have to be made keeping this is mind. At the other end of the spectrum , we also get to see extreme passivity. Here, I refer to assets kept idle. Frequently, the elderly move to other cities/ countries, leaving their real estate unattended to. One of my Uncles passed away two years back. His flat in Navi Mumbai has stayed vacant for the last five years, the estimated loss in Rental Income alone is close to Rs 9 Lacs. It would have been so easy to put it on rent and give away the rental income in charity. If all the apartments in the city which are vacant are put on rent, we can see a fall in rents which will benefit the economy as a whole .
Author – Prakash Natarajan is a Chartered Accountant with expertise in Real Estate