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View Poll Results: Home Loans in today's times: Are they worth it?
Do Not take a Home Loan, invest in retirement savings plans, etc. 10 19.61%
Take a Home Loan for a well developed area, it makes financial sense in the long run. 16 31.37%
Take a Home Loan, but not for a well developed, inflated area. 21 41.18%
None of the above, there are other ways of safe guarding your future. 4 7.84%
Voters: 51. You may not vote on this poll

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Old 21st September 2010, 17:01   #16
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Originally Posted by clevermax View Post
Sometimes I feel buying an apartment is the worst investment in your life. All of you thinking that the property (flat's) value will appreciate, just think about this - will you buy a 15 year old flat? even if you are willing, will you pay the same amount that you would pay for a brand new flat with same specs?

I will never waste 30 or 40 lakhs buying an apartment and end up paying EMIs for the rest of my life.

It's all about PEER PRESSURE which our better halves seem to get vastly influenced with; and they start making your life miserable until you take the plunge and make a huge investment on an apartment.

Same situation. If you learn to control this, or make her understand, you can live like a rich man.
Finally someone who thinks like me.
Frankly, the peer pressure is getting too much. We have a neighbour who has recently forced her husband to get a flat and all she talks these days is about how to decorate her flat and what to do with each room . Listening to all this talk makes my wife want a flat of her own.
I keep telling her that we will get a flat for sure, but not because others are getting it. We will get a flat because we like it. The example i give her is of our car . I tell her that we could have bought a Maruti or a Hyundai like everyone else, but no, we bought a Punto because we liked it and we could afford it. It will be the same with our house. That keeps her calm for a little while before the next argument.
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Old 21st September 2010, 17:01   #17
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Originally Posted by clevermax View Post
Sometimes I feel buying an apartment is the worst investment in your life. All of you thinking that the property (flat's) value will appreciate, just think about this - will you buy a 15 year old flat? even if you are willing, will you pay the same amount that you would pay for a brand new flat with same specs?

I will never waste 30 or 40 lakhs buying an apartment and end up paying EMIs for the rest of my life.

It's all about PEER PRESSURE which our better halves seem to get vastly influenced with; and they start making your life miserable until you take the plunge and make a huge investment on an apartment.




Same situation. If you learn to control this, or make her understand, you can live like a rich man.
Thats bizzarre. By your logic, no one should buy a home. Everyone should live on rent.

Its all too easy to say that one will live forever on rent, but when you get old and stop working, absence of a roof over your head hurts a lot.

Own home is own home, rented is rented. Even taking the appreciation aspect out of this, a rented home cannot give you that feeling of security which an owned home can.

Yes if your parents have already their own home which you can always fallback to, then living on rent does make sense. But only if you are saving for the home purchase sometime in future, perhaps when your ancestral home would no longer be livable or your family expands.

Its best to start planning for a house when one is young.
Personally, i have invested in a flat for myself at age of 27 yrs. I am pretty sure i will close the loan within the next 10 years. That means, at the age of 37 yrs (still not very old), i have a security of roof over my head and my family (and soon to be children).

And i might as well give my house on rent, if i am not occupying it (for reasons like work place in other city, relocation etc.)
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Old 21st September 2010, 17:03   #18
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Thats bizzarre. By your logic, no one should buy a home. Everyone should live on rent.
Please read my post once again, I said I won't buy an apartment. I wasn't talking about a good house which is constructed on mother earth.

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Originally Posted by DCEite View Post
I am pretty sure i will close the loan within the next 10 years. That means, at the age of 37 yrs (still not very old), i have a security of roof over my head and my family (and soon to be children).
I fail to think like this, may be because I live for the moment and and often gets concerned with the uncertainties of life when I think about it in a long term perspective.

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Finally someone who thinks like me.
Frankly, the peer pressure is getting too much. We have a neighbour who has recently forced her husband to get a flat and all she talks these days is about how to decorate her flat and what to do with each room . Listening to all this talk makes my wife want a flat of her own.
I keep telling her that we will get a flat for sure, but not because others are getting it. We will get a flat because we like it. The example i give her is of our car . I tell her that we could have bought a Maruti or a Hyundai like everyone else, but no, we bought a Punto because we liked it and we could afford it. It will be the same with our house. That keeps her calm for a little while before the next argument.
Wish you all the best with your house buying endeavor! Thanks for the point (About the car) I can also tell my wife the exact same reason! (Punto that is)

Last edited by clevermax : 21st September 2010 at 17:14.
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Old 21st September 2010, 17:17   #19
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Quote:
Originally Posted by clevermax View Post
I will never waste 30 or 40 lakhs buying an apartment and end up paying EMIs for the rest of my life.
Quote:
Originally Posted by Newpunter View Post
Finally someone who thinks like me.
One more to the list. But the comforting fact is that my wife thinks exactly like me. So we are planning to invest in land back at our place and build a house later on than investing in an apartment in Bangalore. But the peer pressure is coming from the in-laws forcing us to buy an apartment rather than living in a rented house So one way or the other you are bound to have peer pressure!!
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Old 21st September 2010, 17:18   #20
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New or old apartment - this is the same dilemma you are in to choose between a used car and new car...isnt it? :-). The cost of old apartments dont crash...they do rise but not as fast as new ones. Have you tried getting a quote for a 15 year old apartment in Indira Nagar or Koramangala?

In my case, i pay an EMI of 17K for a 3 BHK ( ya..bought it in 2005 for 25L). The current rent for the same is around 20K. So ain't i better off having bought it.

There is no easy answer to this. You will have to consider all the factors that effect you and take a call.
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Old 21st September 2010, 17:27   #21
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Renting VS Owning. I have been in the same dilemma a year ago.

I had a flat in Chennai which was bought in 2002 for Rs 1000 per sqft. I sold that last year at Rs 4500 per sqft. I sold it for the following reasons:
1. Area getting crowded, would like to move to peaceful area.
2. Getting bored of the same environment
3. Lack of (better) amenities like Club house, gym etc.
4. Cash in the oppurtunity (Rs 3500 gain per sqft, after writing off the loan I gained Rs 2500)

I invested the gain in land at a different place, which has increased 60% now (in less than 18 months). I will be selling it off and reinvest in something else once it doubles, which should happen in the next 1 year.

I would say, I did not loose on tax, because I get to enjoy the full benefit of HRA (rs 22k per month); whereas I have a limit of Rs 1.5 lakhs per year if its EMI (interest portion)

The new flat that I am living on rent now costs me Rs 22k per month. Assume that I am buying that flat. I have to shell out Rs 30 lakhs as Initial payment and another 60K permonth as EMI towards the loan (Cost of the flat is approx Rs 85 lakhs). At this point in time this heavy EMI impacts my personal spending and therefore I have to be tight on my expenditure
Also IMO there are not so many people who would buy a 5 yr old flat which is one crore plus. So liquidity after 5 yrs to sell it is not so easy.

Being in the rented flat I can opt to move out to a newer and better apartment in 2 yrs time. You hesitate to do that when you live in your own apartment.

I pay a rent of Rs 22k, get HRA tax benefit, I invest the 40K (which I can comfortably afford) in other investments like MFs, Gold etc. I dont have to think twice if I have to take my kid or wife out or buy something for them.

Given the difference between the Rental values and property values, in my opinion, rent is the best thing for Metros; if not for all cities.

Last edited by Car&me : 21st September 2010 at 17:30.
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Old 21st September 2010, 18:31   #22
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As i see it, one generation has to sacrifice for the other. If your parents own a property, it would eventually come to you. If your parents dont have a property, its your turn to sacrifice so that your children dont suffer.
Having said that, its not always necessary to buy a property however one should have a permanent residence.
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Old 22nd September 2010, 11:33   #23
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As i see it, one generation has to sacrifice for the other. If your parents own a property, it would eventually come to you. If your parents dont have a property, its your turn to sacrifice so that your children dont suffer.
Well put, Quadra!
Someone somewhere has to take the hit.

As i mentioned earlier and as DCEite also said, it makes sense to put in the money when you are young, so there isnt too much pressure later on, when you have kids going to school, college, etc.

Despite the EMIs i am paying these days, my family has never had to forego any of the luxuries we enjoyed when we didnt have any loans against us. We stil eat out as much as earlier, we still go on trips by car, and basically do everything we used to do to live the moment, as we used to.

That said, having our own apartment gives us a sense of accomplishment.

* P.S. : i must also mention that all of the above is possible only becuse we have dual income in the family.
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Old 22nd September 2010, 12:30   #24
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Now I am looking at it from a different point of view. As having a roof on your head after retirement. The rent is not going to be any lesser in coming time and pension is going to not be that much that I will be able to afford the rent as well as the daily expenses.
I guess it makes sense if I do not see it as an investment but as something I am putting away for my future post retirement life. PF does give one 8% return but I do not consider it as investment, but as money I am putting away for future.
Suddenly the location and builder snob factor do not matter much now that I am looking at it from this point of view.
My policy always has been to keep life insurance and investment seperate.
Now It seems I will add to it, Keep Life insurance, Investments and Housing needs seperate.
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Old 22nd September 2010, 19:36   #25
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Very informative thread. I just rated it 5 stars. It's good to know what other people think in regards to property purchase - flat / house - purchase / rent.

I am 29 years old and do not own a house however being part of the work and family business since 18 years old. So been a part of my family since 11 years ( not counting 2 years I spent in Delhi )

During the last 14 years my father purchased a total of 3 properties - 2 flats and one Land. 2 in Agra and 1 in Gurgaon.

The flat in Agra has doubled its original price in the last 10 years.
The flat in Gurgaon has gone 4 times its original price in the last 7 years.
The Land in Agra has gone 10 times its original price in the last 10 years.

All 3 properties are now in the best part of town or the most posh localities. But not always. When we purchased it, it was in the outskirts or in a place where there was hardly anything. But now in less than a decade we have 5 star hotels and Malls and Offices mushrooming everywhere.

Now all these are good properties and if our family sells anything today then we are positive to get at least 90% of the current market price.

HOWEVER if we want to rent it out - it's a different ballgame.

Example - The flat in Gurgaon's current cost is 60 Lacs BUT rent is 15k only ! When revised in the coming few months it will go to 18k.

The flat in Agra is half the price of the gurgaon flat and it's rent is 11k. Just recently given.

The piece of land - we stay in our own house finally as we could not give such a large house on rent.

SO my point is buying a flat does pay out BUT all depends on location. Buying a flat at today's exorbitant over priced rates is not a very smart deal. I see flats being sold at 1 crore +. What do you think? This flat will fetch you 5 crores + in 10 years time ? Nah !

Buying a piece of land is a good investment as at least the roof is yours. And as my father said once ( he is no longer with us ) - that a piece of land can grow. You could make a basement, a first floor, another floor, whatever !! You could retire in the house and rent out one floor and live off the rent. BUT with a flat sadly all you have is a small enclosure to yourself.

A house will always pay you back in someway. A flat is a more safer, more modern and a temporary stop in your life. Having said that there are its own advantages and disadvantages of having a house / flat. To each his own

BUT my 2 cents is that if you can - then opt for a piece of land even if it means going out of the town a bit. The town will get there in a very short time. Population is only increasing. If you look at a piece of land today - and you say it costs 25 lacs, trust me it will cost 10 times that price in 10 years ! The same MAYBE cannot be said for a flat in today's time where flats are already sold at bloated prices thanks to the builder.

In places like Mumbai - Samundra Mahal etc is a different game. Flats have been known to be sold for unheard amounts like 25 crores or more. These are only a handful of examples.

I was in a dilemma to buy a flat worth 25 lacs a year back BUT opted out. I am now in the hunt for a 400 - 600 sq yard plot which is approved by the local authorities and costs the same as the flat does. When I have the money I will make rooms and a small garden. That is something I cannot think of in a flat / concrete jungle.

Last edited by vkochar : 22nd September 2010 at 19:40.
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Old 23rd September 2010, 20:42   #26
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Very interesting thread. Coming to buying a flat, what has age got to do with that. I have seen many people say that the earlier the better.

Is it true?
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Old 23rd September 2010, 21:55   #27
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Very interesting thread. Coming to buying a flat, what has age got to do with that. I have seen many people say that the earlier the better.

Is it true?
The way it works, with age on your side, banks find it easier to sanction a loan since there is time on your side for you to pay off the loan. Also, i believe one has lesser burdens when young, making it easier to afford the EMI component.
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Old 23rd September 2010, 22:11   #28
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SO my point is buying a flat does pay out BUT all depends on location.
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If you look at a piece of land today - and you say it costs 25 lacs, trust me it will cost 10 times that price in 10 years !
Wrong my friend; land or flat both of them depends on the location & location only.

Let me give an example. 10 years ago, the outskirts of Bangalore, Hyderabad & Chennai were of nothing but waste lands. Govt in each of the states promoted building SEZ IT parks & due to this the land values in these places increased several folds. But what about the other side of the outskirts? They've grown too, but not at the rate at which the outskirts grew. Like you said, it all depends on the location.

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The same MAYBE cannot be said for a flat in today's time where flats are already sold at bloated prices thanks to the builder.
Yes in some cases like the example you provided in Mumbai. There're similar cases in Chennai too.

But when it comes to buying a house, I would buy only when I can afford to pay 50% as downpayment so that I can borrow only 50%; otherwise, staying in rent is perfectly fine.

Last edited by aargee : 23rd September 2010 at 22:15.
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Old 23rd September 2010, 23:03   #29
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The way it works, with age on your side, banks find it easier to sanction a loan since there is time on your side for you to pay off the loan.
I am 30 now. Is it too late?

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But when it comes to buying a house, I would buy only when I can afford to pay 50% as downpayment so that I can borrow only 50%; otherwise, staying in rent is perfectly fine.
One of my colleague took a flat of around 23 lacs and paid around half of it. He pays EMI of 10K!!!!

But though the idea looks great but I cant see myself going for a 40 lac flat this way. Unless a loooong onsite happens. And frankly I am not interested in that.

Also I just went through the BDA website today. The plots in layout BDA comes up with, to be eligible for them one has to have a 15yrs stay and domicile here. Only for KAS(Karnataka administrative service) is it 2 years.

I am now thinking that for IT (the cursed) people apartment is the way out. A big one or a small one does not matter.

Infact going by the views expressed it seems it will be a better bet to take a small flat from a hotshot builder than go for a huge one from a local builder in some far off location. Views??

I do have house in my native place but there is no IT there. What I will do there?
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Old 23rd September 2010, 23:45   #30
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Well put, Quadra!
Someone somewhere has to take the hit.
Thanks ben.

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I am now thinking that for IT (the cursed) people apartment is the way out. A big one or a small one does not matter.
If you are not a local, you should buy an apartment. True - a big / small, doesn't matter

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Infact going by the views expressed it seems it will be a better bet to take a small flat from a hotshot builder than go for a huge one from a local builder in some far off location. Views??
I am assuming by hotshot you mean mantri / purvankara / salarpuria / shoba etc. So plan to shell out anywhere between 50-55L. And you need to give 15% cash as down payment. That comes to around 7.5L for 50L value.

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I do have house in my native place but there is no IT there. What I will do there?
Keep that house as it is. Make sure you take care of it from time to time so that i stays with you in the long run.

I would suggest you pick a 30L house from a small builder. EMI should be around 25K per month. Pay 15% of 30L = 4.50L as downpayment and get started.
No need to go for hotshot builders unless you have dual source of income with anyone of you earning a 6digit monthly salary.

Last edited by quadra : 23rd September 2010 at 23:50.
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