Do not rent what you cannot sell!

Many of my clients have a problem which they think is unique. This problem is called “Anchoring”. It means you have heard (or seen) about transactions which have happened at a particular price, then they expect that price for their real estate. Let me explain. I have an office space in Mumbai bought for Rs. 6 Lakhs (circa 92). This property had seen a high of Rs. 30L but now has a market price of Rs. 15L. In case i need to sell it, I should sell it at 15L. However, what happens is I get “anchored” at 30L and decide to rent it. That is disastorous. It is a negative feeling “I am not getting 30L, so I am waiting” is the message. In case the price falls further, I am still waiting. This makes no sense. If you wish to sell, sell. If you wish to rent it out, rent it out. Do not rent a property which you actually wish to sell.  

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