Serious response only please.

Thanks for your response. Dhulikhel is very much in my mind, after reading Nepali Times report last week. But the problem is , as you noted, the land mafia is active everywhere. I doubt Dhulikhel would be considerable cheap rightnow. My friends who are in big management positions in banks back home think it is going to take 2 years for the mafia to really get hit hard by the new regulations.

Kathmandu is defintely over-crowded. I like that word: toilet-bowl. The only thing to do in Kathmandu is to over-flow out of it. But over-flow where? Now, ring-road is the main vein in Kathmandu that an adequate amount of traffic can flow through. The rest of Kathmandu has clogged up arteries like a person about to suffer from a heart-attack. In the future a bunch of 'one-ways' is the only way that things will get from A to B. The intelligent are trying to get as far away from the center of Kathmandu as possible without losing access to jobs, roads, telephone, etc. Resources have been decentralized and can be gotten from almost anywhere. One does not have to rush to Assan and New Road to get that one product. One thing is for sure, Kathmanduites are thinking differently about themselves and where they live and how to make a living.

Infact, last year, in Assan, when all the water was running out during March-April, no matter how much boring they were doing to get water out, the place actually ran out of water. So this is the problem. The charm of living in inner-city Kathmandu is becoming less and less and the headache is more and more.

People have been following the general trend of the land mafia and see that they have been targetting Dhulikhel instead of other areas around Kathmandu. But I'm not sure I agree that Dhulikhel is necessarily the next best investment option beyond Kathmandu.

 

The high interest rate in Nepal banks actually is because of volatility of economics in Nepal and rapid development of India (mainly) and China. Chakka-jams, political instability, abject lack of infrastructures themselves point to the unworthiness of putting hard-earned hard currency in Nepali sectors. This is I'm talking as a foreign investor with cash in hand. As a Nepali, it is worth to put all our asset in Nepal no matter what the results are; the worst scenario is you become broke, but again "you spilled your butter in your daal". If you are a bit intelligent, put it in places like Hotels, Hydropower etc. Putting in real estate in KTM is like making the macro-economics of KTM worse all the more, but you may personally benefit from your short-term investment. Been there, done that.
I feel sad when ppl with green cards are actually selling assets in Nepal and bringing the $$$ to the USA to buy assets here.
Nepal has lost about last 15 years in terms of  development due to the political instability of Nepal, and it has played very well in favor of India (although India does not and did not need Nepal for its development).

To be competetive in the global world Nepal needs to provide adequate services. What are the different ways that Nepali products and services (apart from tourism) can differentiate themselves from Indian and Chinese products? Because of geography, we have to cross over more obstacles to get our products and services over-seas. How are Nepali firms expected to compete in global markets when they can't even count on adequate electricity, water on one end and a lack of disruption from bandhs on the other end? True, industries like banking and financing are making progress both in terms of electronic banking and finding ways for Nepalese to invest creatively in Nepal. But ultimately, the question is, how are Nepalese firms going to be able to compete in global markets? Will Nepali firms targetting the Nepali market be enough for long run growth? 

I agree what you are saying. But my question was more pointed, which I was  not clear before:

pire,
Is it easy to convert the money from the sale to $$$ in Nepal and bring it to the USA? I don't think so.
If you are talking about keeping your investment and profit in Nepal forever or so, I think real estate is still a very good bet. Bank accounts are very volatile in Nepal, especially when there is no government at all. For that matter, every thing in Nepal is unstable.
If you are planning to do tele-investing from the USA, just forget about Nepal and have a wait and see plan in effect.

eklo,

That's true, if you are going through some legal channels. there is no such provision in real estate, especially, if you are buying one or two houses in KTM. And it won't be that simple, will it? I've not heard of such government plans for real estate where foreigners can put in money in dollars and take back home, in due course, the principal and profits in dollars.
If you are thinking of investing Rs.1 karod or two, you will need a lot of partners to go along so that you can start a size-able hydel in Nepal (we are talking about 100s of karods). But anyway, I do not have any experience in hydel, so I wish you best of luck.
Only investment I had done was through my parents and without any hope of any return whatsoever; I actually gave them to buy a good house. About 13 years ago, I was not married yet, I sent them 65k and they bought stocks. They are now very rich, plus their brand new bangala was a bonus, it appears. Of course, needless to say, my parents and siblings have kept the principal and profit for them ( I gave a gift to them). The stocks gave them a 1000 fold return. Nobody and nothing would match that, ki kaso....

Lucky you.

Pire,

Few points from me,

I don't know much about economics but the exponential growth of the price of land plots and houses  doesn't seems natural. So hakim_saab and few others could be true on their points. Definitely you can't expect to get back your investment by renting the house whether it follows the normal rule of economics or not; the fact is that you will not able to get back your investment simply by renting the house, even you will be not able to get interest that you will earn from bank. If you want get good return of your money from renting the house then you have to start from scrap, need to find cheapest piece of land, build a house with very low quality construction materials with  maximum numbers of rooms. There will be huge difference between the cost of house you made by yourself and the house bought from someone else. My point is forget about making good money from just renting your house. As you mentioned above, deposit your money in bank and enjoy with the interest they will pay you. Other option to make good money from house is buy a house and hold it for couple of years then you will make good money by selling it. Meanwhile, you will be also earning from renting. This option will work only if you are investing from your own pocket and can wait to sell the house during unfavorable econmic condition in the market. I have seen people involved in town planning business becoming millionare and going back to street within a year.

But if you seriously looking for a house to with resident purpose then I will suggest to move little far from the hub of Kathmandu valley. Places like Budhanilkantha, Bhainsepati are ideal. But I will also suggest to consider the risk of natural hazards in the place you are planning to buy a house. Well, Dhulikhel could be the best option but you need to consider also your work. What you are planing to do after you return in Nepal. Do you need to commute Dhulikhel to Kathmandu everyday for your work? If yes then Dhulikhel might not be the best place and the reasons are obvious.

 

GT,

"I was also amused when I found someone putting up his house for sale at 2.5 karod, but was willing to rent it out for serious long term renters for 50 thousand per month"

I understand your situation, Bidroh. Ideally one wants a situation where one is getting some good return from one's investment.  The fact that the price of your house was probably around 2~3 karod just a year or so ago and it closely tracked the rental price should tell something!!

The house wasn't priced around 2-3 karod a year or so. 

Bidroh, I used your figure 1.2 million to make this guess.

And Fyi, the real estate market was sky high just a year ago but it isn't the same anymore. In fact, the prices have fallen down tremendously when you compare it to those of a year ago. 

Pire, my house is located in a ridiculously convenient location. Further, its close to a number of top notch embassies, UN Offices, ministries etc. 

Bidroh, you are right, and you know that is exactly my problem. I want to buy a house, but househaru reasonably priced nai bhaeko chhaina ... For example, if I want to rent your house and ask your family to sign the house for me for 3 lakh per month for next five years, I am sure they would love to do it (or at least most of the families do). But they wouldn't sell it to me for 5 karod. On the other hand, if I put 5 karod at bank, I get 6 lakh per month in interest. and in five years, my money would be 7-8 karod. I haven't found any businessman/banker who says the price are going to rise during the next five years. They think there will be a big squeeze for next two years. Who knows. This irrationality is what I find very hard to explain.

I am richhhh Viaaaayaaachhhh" rick james"

Anyone knows which banks in Nepal give you the highest saving account interest rates? And is it possible to deposit from US directly?