Buy house on loan or sell existing property?

POSTED BY ON January 31, 2014 2:55 pm COMMENTS (6)

Hi Friends,

Below is the scenario of my friend:

  1. Total gross earning is 24 lacs p.a.
  2. Living with brother but now want to get separated due to location issue
  3. Got one house worth 50 lacs ( Though people are estimating between 55 to 60 lacs) but NA title is not cleared and not expecting much appreciation in future  due to location
  4. Already shortlisted a house worth 92 lacs
  5. Planning to start own business in next 2 years and he may need a office of 1000 Sq ft for 15 people staff
  6. Want to build capital of 3 CR for kids and retirement in next 10 to 12 years
  7. Got 30 L surplus

His plan is:

Take home loan of 75 L and get relocated. Try to finish home loan on asap and sale existing house (worth 50 L) to buy small house (may be of 35L) for better appreciation in next 5 years. Also invest in gold (15 L) for good return as well as backup if something goes wrong and unable to pay EMI

Please share your thoughts and better options.

6 replies on this article “Buy house on loan or sell existing property?”

  1. says:

    Thank you Ashal.

    Anybody else would like to share suggestions?

  2. ashalanshu says:

    Dear Jay, NO. Here is my take.

    1. Sell this 50L house.
    2. Purchase 35L Rs. house for self consumption
    3. Invest remaining 15L Rs. to create business seed funding as well as family support funding when the friend start his business.



  3. says:

    Thanks, you mean to say sale existing house (50L) and buy new small house (35L) for better appreciation and invest remaining in gold (15 L). Also take home loan (75L) for one more new house where he would be living?

  4. ashalanshu says:

    Dear Jaykumar, I can understand your situation and thanks for the clarification. Regarding the basic query, ask your friend to sell out the house of 50L Rs. switch over to a smaller house with lesser price and put his business plan on hold for time being so that he has enough saving with him to run the house for next 4-5 years without bothering about the business and it’s earning.



  5. says:

    He is my one of very close friend and he was discussing with me for this. I told him that I know one great website to get some better ideas.

  6. ashalanshu says:

    Dear Jaykumar, is it the friend or your own life? @ 24L Rs. gross income, it’s advisable for you or your friend to hire a paid financial planer to do things on more personlized basis.



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