To buy 2-bed room or 3-bed room (Just bought Manish’s book)

POSTED BY keshav ON October 27, 2012 10:50 pm COMMENTS (7)

Hi All,

I love this blog and the forum and just bought the book. I need to learn quick. https://www.dropbox.com/sh/tpw7ewjpbh97kpk/8a9BvEwfsg

I found a very good deal to buy a House in a gated community in Hyderabad, next to a 12-lane road and 20min from work. Best part- It is ready to move in!

I’m not yet sure if this house is for investment or to keep for myself. I have mixed feelings.

and cant decide between 2BHK or 3BHK!!!! HELP!!!

2BHK = 36.5L (rent 10k now)

3BHK = 44L or 46L (option 2) (rent 14k now)

Down Payment = 20L

Loan Tenure = Max 10 years

Google Spreadsheet:-https://docs.google.com/spreadsheet/ccc?key=0Asr2c4dnvWo5cGhQT2tRWTB6RVpuT3AyaUkyY193TUE

We would like to go for 2BHK, but there are limited options, we did not like the house (ventilation is not great). At the same time there are multiple options to choose in 3BHK but I’m hesitating because of the price difference. (Community has 2BHK and 3BHK)

Some background:

I’m 33 years old and recently married. Both of us work in IT.

I hate taking loans (I have none now) and I dislike credit cards – never defaulted and hardly using them now. But at the same time I havent done any investments except for PPF.

My wife would ask me to think about a house, and I always said No. But suddenly I found myself really liking a house. I believe the price is very good and would also like to live here. But I will also not hesitate to sell it in 5+ years, if required.

Imp:- We are planning to have kids in a year or two and she would like to take a 3-year break from work. (We also love travel & adventure, tried scuba diving & planning sky diving next year)

Now rather than being an emotional decision, I want this investment to have sound financial sense. Everybody wants me to take a 3BHK, but I dont want to rush and make a mistake.

This is where I need help from you (or even professional advice). I did some math to make sense of my costs, but I may have missed some important paramaters.

7 replies on this article “To buy 2-bed room or 3-bed room (Just bought Manish’s book)”

  1. Dear Keshav, please feel free to ask as & when you need so.

    All of us ‘ll be happy to help you.

    thanks

    Ashal

  2. keshav says:

    Hey Ashal,

    We are firm on buying only a 2-bedroom, unfortunately we ran out of options in the present community and so just waiting….

    In fact, I would love to take your advice for the next steps.

  3. Dear Keshav, I do hope you have decided by now.

    thanks

    Ashal

  4. Biswa Singh says:

    If you want to stay with your family and parents may be get a 3 BHK. But from investment perspective 2 BHK are better. Its easy to rent them and sell them as complared to 3 BHK.

  5. keshav says:

    Thanks for replies

    EMI for 2BHK = 26k
    EMI for 3BHK = 43k
    My Sal = 70k
    Wife sal = 45k (she will take a break for 3 years after having kid)

    Right now 43K EMI is affordable, but when there is single income (mine), there is hardly any room to breathe. However 3BHK has better appreciation over 5-10 years and I stand to make a bigger profit.

  6. Regarding 2bhk or 3bhk, if you have the money, you can obviosuly go for a 3bhk one , just make sure its possible for you financially and gives you air to breathe ! . You can look at it from investment point of view and for next 5-10 yrs of residing !

  7. Rosh says:

    Dear Keshav,

    1. First ask yourself if you buying for investment or living in that home.
    Reason: This is first decision you should make before going for buying a house.

    2. TRY TO INVEST IN THE SMALLER PROJECT WHERE AROUND 3-4 TOWERS EXISTS.
    Reason:Chances of completion is good. Sharing of common facilities will be distributed in small number of peoples like Swimming pool,life,club etc..

    3. Try to buy a near completion house if your pocket allows other wise go for semi constructed house where some construction already began.

    Reason: It shows the builder has some clearance.

    4. Always ask the builder all the approvals from concerned AUTHORITY & other govt agencies. Here you have to make sure your tower is approved or not also your floor is approved or not.

    Reason: Completion chances are good.

    5. Check the banks who are financing this project.
    Reason: Bank can only finance those project which are safe.

    6. Make sure you get the agreement draft copy.
    Reason: To understand the builders agreement clauses.

    7. Try to buy house in developed sectors.
    Reason: chances of completion is good as the availability of sewer line/water line/electricity line in that area.

    8. Don’t get lured by things like golf course etc.
    Reason:These are just to tempt the customer.

    9. Always bargain with the builder/agent again and again.
    Reason: If you can bargain with road side seller, why not with flat. its your right.

    10. Always check the history of the builder & its reliability.
    Reason: To make sure your money going in right hands.

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