gone_mad

Thanks people for keeping the forum informative and interesting.

Well, I am really new here, and I am in to get some suggestions/ideas about my 'dream home' plans. To brief about me and my earning power, I am 25, living in Chennai with my parents, working for an IT major and, earning around 50-55K rupees pm.

I want/wishfully think to buy a property in Chennai, not as an R2I but for my own residential usage. After seeing, analyzing the property rates, cost of living, proximity to places, I have decided to stick to the southern part of Chennai, particularly Madipakkam (Northern part - Sadhasivam nagar, Ram nagar north etc). The reasons are - The locality is quite good, close proximity to Velachery MRTS and Vijayanagar bus depot, closer to OMR, rates are kind of affordable*.

*Affordable - Here is my plan / definition
- There are CMDA approved lands available for approximately 55L to 60L per ground whose guideline value stands upto 45L to 46L per ground.
- I along with 3 friends of mine are planning to buy around 2700 sqft of land, register it sharing equally (SBI gives out 80% loan for the total land + construction)
and the repayment would be approximately 22 to 25K pm for my salary
- The plan is to build two 3BHKs in the first floor, and car parking + 2 2BHKs in the ground floor

I am in the process of seeing lands now. I checked with a legal advisor of a builder about how this is workable and got some very high level inputs from him - the abstract is that this is doable legally. From the perspective of the banker, also this is doable, and I might get a loan for 80% of the total cost involved. I am yet to check with the architect/designer on this.

I thought it would be nice to get some advice from experts, advaced RE investor people around - Kindly advice me on
1. Is this plan totally workable? Are there any major, legal or other vital points that I have missed out?
2. Is this the right period to do this? Since this is for my (same with the case of other friends involved) own usage, should I wait in to see the speculated downfall of the RE market?
3. Market rate for a flat in those areas is 3800 to 4000 Rs per sq. ft.
If I work out this way, I will have to spend 16L (64L land price + registration / 4) + 15L for construction (lets keep 1100 sqft for 1300 rs per sq ft) - total 31L Rupees for a 1100 sqft flat with 700 sqft of land in my name.
By this way, I will end up saving approximately 10L rupees with a larger land share.
4. Am I overlooking things anywhere?
5. What could be the potential problems in doing so - at this stage, or in the future?
5. Any suggestions / advice on how, what to do and what not do do is appreciated.

*Cheers*
Newbie

krishnamurthy mahalingam

The calculations are broadly excepting the following:-

1. For approvals it might cost you Rs.200-400/- a sq.ft including the sanction of plan, issuing of completion certificate, without which the future resale of the project becomes difficult.

2.The road width decides the Floor Space Index (FSI) supposing on a 2400sq.ft. land if it 30' road you may get 1.5 i.e. you can construct 3600sq.ft. depending on the frontage of minimum 50' (set back on both sides would be 7' and front and back would 10-15' minimum.

3.Escalation cost on construction should be considered anywhere between 15-20% during the time of construction. You have taken the least of the cost and it should be considered anywhere between Rs.1600/- to Rs.1800/- per sq.ft. this is for quality construction.

4.Builder and the timeline he takes for construction is between 12 - 18 months and interest part for those period should also be considered.

4.Most of the roads are narrow in Madipakkam excepting one or two broad roads. Providing Septic Tank is big hassle as Drainage system is yet to operational for the entire madipakkam.

Taking into consideration all this factor and also the ground cost of Rs.55- 60 lacs and between Rs.65 lacs - Rs.70 in Ramnagar (madipakkam) little outer pheripheral of madipakkam and near to Velachery overbridge the cost should be fine.

ks2071746

Dear friend,

Thank you for an informative and useful post here.

ks2071746

Natarajg007

Are you a builder? Somehow your opinion seems to state that!! How can a quality construction jump to 1600psft from 1100psft?