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POSTED BY ON March 15, 2012 6:35 pm COMMENTS (5)
Dear experts – I moved to Pune from Ghaziabad a year back. I own a flat in Ghaziabad and getting a rent of 11k pm from that.
Here in Pune I am staying in a rented accomodation ( a 2BHK flat in a good locality, I beleive its value would be 40-45 lacs ) and paying a rent of 12k PM currently.
I have started liking this city and somewhat my family ( wife and 2 school going kids ) is also settled here. No one can predict what happens tomorrow ( here context is I get a good job back in Noida, Gurgaon ) and I move back and start staying in my own flat, but keeping this possibility aside, I can stay or rather plan to stay for long term, say 10+ years in Pune.
Now in this condition, is it advisable to buy a flat here in Pune? Please consider the property rates here in Pune are very high currently ( a 2BHK in my locality costs approx 50 lacs ) Or does it makes sense to continue stayin on rent.
My concern is I do not like living on rent, due to negotiations to be carried out every year with landlord related to rent and other things. Like for eg. after completing one year, though agreement said 10% hike in rent, but my landlord dictated 15% hike, stating the development happened in area and as per survey he did for current rentals. Now I had no other option but to accept this 15% hike due to a few reasons like kids have made a few friends in society, we got used to the area and to avoid pain of again winding up everything and moving to a new place. I hope you understand.
Now this will be the case every year which I have to deal with and that’s the reason I thought of exploring the option of buying a flat but the high costs scared me, and there I though of going for expert advice.
I can shell out 10 lacs from my pocket. I pay rent of 12k, get a rent of 11k and have surplus 20k which I can spare every month.
Now considering all this and my feelings :), please can you suggest best suitable way which I should follow?
I am confused and need expert advice. Should I go for a flat in Pune? Should I continue staying on rent and invest the EMI amount somewhere else?
Many thanks once again in advance for your time and the great selfless work which you guys are doing.
Regards,
Anurag
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Hi Anurag,
This seems to me like a no-brainer. If you get 11 K pm rent, pay 12K and then have surplus 20K, you can easily afford the 35K EMI for the flat.
My calculation shows that you can easily get a loan for about 35L for a 50 L flat. Yes, you may have to take a personal loan or ask from some relatives for the 5L, but then you get another property.
Your current availability for EMI = 11K+12K+20K = 44K. Your actual EMI will likely be 35K, so rest 9K you can invest per month in some good mutual funds. So, when there is a rainy day (read when your flat in Ghaziabad is no longer rented out), you can use this fund. Or the day may come when you can sell off one of the flats for some expenses and yet have a home where you can stay
Thanks,
Ram
Annu – Investment in real estate can never go wrong in India. Do not sell Gaziabad home. And buy in Pune if your job is generally secure. I was in your shoes few years back before I moved to the US. I bought a property wherever I lived, including US. Now they are paying rich dividends. Of course, you will have to carefully workout your taxes and other exposures. But in general, always a better deal to buy then to rent, especially in India where the property prices charts always have a positive slope.
I feel that leaving apart the reasoning of buy or rent from cost point of view, it makes sense to buy a flat so that you dont have to depend on rent issues and other issues as mentioned by you . Why dont you sell your Gaziabad flat and then use the proceeds from there plus the 10 lacs you have . Additionally you can take a loan for some amount and then pay off using the 20k surplus .
I think this should be an ideal thing . You might be thinking that the gaziabad flat is already set and lets not disturb it , but incase you dont use it , it would be little tough to get your own flat in pune .
What do you think about this one ?
Manish
Thanks Manish. I will wait for comments from other experts like BanyanFA, justgrowmymoney, Ashal Jauhari and Ramesh.
Dear Anurag, Is this 50L final price including all expenses or merely naked flat price & ‘ll there be additional costs for registration, stamp duty, parking, society, development…….
The flat in question ‘ll be a furnished, semi-furnished or unfurnished?
Please answer.
Thanks
Ashal