Realtor promising you sky-high returns under buyback scheme? Steer clear

Such schemes where the developer promises fantastic rates of returns are a sign of his financial desperation

One clear sign of a highly risky investment scheme is the promise of a very high rate of return. Look at the State Bank of India fixed deposit rate for a comparable period. Currently, it stands at 6.80 per cent for three years. Any scheme, howsoever attractive, can at best give 5-10 percentage points higher return. But if it promises a 20-30 per cent higher return, investors should be warned about its potential risk.

A Bengaluru-based developer launched a 20-80 subvention scheme a few years ago. In April 2014, it asked buyers to put in 20 per cent, or Rs