Hi,

I am planning to buy a semi-indepent duplex house (2 houses with one common wall in 1 ground land) in perumbakkam. The land area of one house is 1200 sq.ft nad built-up area is 2050 sq.ft. 3 bedrooms with wardrobes/3 bath, 2-living room and a modular kitchen with service area. The house is ready to occupy. All the door has iron gates outside. Even the balcony door. In addition to this the builder has promised me to add inverter and security video phone. This is very near to the medavakkam-OMR road. The builder initially quoted Rs. 3100 psft in october and now we negotiated to Rs.2700 psft which comes to 55 lacs and 2 lacs for Vale added tax (VAT and registration). The house has 2 sump and 2 bores. He has laid the foundation 4 ft above the road and the locality is calm and surrounded by lot of individual houses.

My question is can I go ahead and finish the deal. How good the rental value will be there? I am expecting minimum Rs.10,000. Anyone from perumbakkam area? Your inputs are appreciated.

Thanks
Read more
Reply
23 Replies
Sort by :Filter by :
  • IF you are buying a house to get rental you must be the most decadent idiot in the world.57L invested in the stupidest savings bank at 3% rate of interest will get you more money and a 10% FD will get you 6L approx.
    Better find out why you are buying the house?
    CommentQuote
  • I will be occupying this house in another 2-3 years...My question is is this a good rate to buy at this time?
    CommentQuote
  • adhdec01,

    I think the whole deal is an expensive deal. With half ground land you should be able to work out the most 40 lacs if you aquire a land and then get a builder to build to your taste and design. For a 1200 sqft land, G+1 building will cost 20 lacs for the current building cost. So the variable cost is the land price. It depends on the area. In the suburbans half ground should go to about 15 to 20 lacs. If you look into prime city area then it is another story. I think you are looking at the suburban areas. In this way if you want to rent out initially your ROI is better. Think about it
    CommentQuote
  • Originally Posted by Natarajg007
    IF you are buying a house to get rental you must be the most decadent idiot in the world.57L invested in the stupidest savings bank at 3% rate of interest will get you more money and a 10% FD will get you 6L approx.
    Better find out why you are buying the house?


    Nataraj,
    For the first time you gave a good/honest opinion.
    CommentQuote
  • Originally Posted by adhdec01
    Hi,

    I am planning to buy a semi-indepent duplex house (2 houses with one common wall in 1 ground land) in perumbakkam. The land area of one house is 1200 sq.ft nad built-up area is 2050 sq.ft. 3 bedrooms with wardrobes/3 bath, 2-living room and a modular kitchen with service area. The house is ready to occupy. All the door has iron gates outside. Even the balcony door. In addition to this the builder has promised me to add inverter and security video phone. This is very near to the medavakkam-OMR road. The builder initially quoted Rs. 3100 psft in october and now we negotiated to Rs.2700 psft which comes to 55 lacs and 2 lacs for Vale added tax (VAT and registration). The house has 2 sump and 2 bores. He has laid the foundation 4 ft above the road and the locality is calm and surrounded by lot of individual houses.

    My question is can I go ahead and finish the deal. How good the rental value will be there? I am expecting minimum Rs.10,000. Anyone from perumbakkam area? Your inputs are appreciated.

    Thanks


    I think this price is too much.
    CommentQuote
  • Originally Posted by adhdec01
    Hi,

    I am planning to buy a semi-indepent duplex house (2 houses with one common wall in 1 ground land) in perumbakkam. The land area of one house is 1200 sq.ft nad built-up area is 2050 sq.ft. 3 bedrooms with wardrobes/3 bath, 2-living room and a modular kitchen with service area. The house is ready to occupy. All the door has iron gates outside. Even the balcony door. In addition to this the builder has promised me to add inverter and security video phone. This is very near to the medavakkam-OMR road. The builder initially quoted Rs. 3100 psft in october and now we negotiated to Rs.2700 psft which comes to 55 lacs and 2 lacs for Vale added tax (VAT and registration). The house has 2 sump and 2 bores. He has laid the foundation 4 ft above the road and the locality is calm and surrounded by lot of individual houses.

    Dear friend,

    An all inclusvie price of a little less than Rs. 50 lakhs may be a good deal. Rental value may not be much at this juncture, but your plan to go and live in the house in the next 2 to 3 years will make good reasoning for this purchase, if otherwise you are satisfied with the location and the existing facilities.. Please release the payments based on the actual progress of work and always keep last 10% against the handing over of the flat in all respects.

    ks2071746
    :oHi,

    I am planning to buy a semi-indepent duplex house (2 houses with one common wall in 1 ground land) in perumbakkam. The land area of one house is 1200 sq.ft nad built-up area is 2050 sq.ft. 3 bedrooms with wardrobes/3 bath, 2-living room and a modular kitchen with service area. The house is ready to occupy. All the door has iron gates outside. Even the balcony door. In addition to this the builder has promised me to add inverter and security video phone. This is very near to the medavakkam-OMR road. The builder initially quoted Rs. 3100 psft in october and now we negotiated to Rs.2700 psft which comes to 55 lacs and 2 lacs for Vale added tax (VAT and registration). The house has 2 sump and 2 bores. He has laid the foundation 4 ft above the road and the locality is calm and surrounded by lot of individual houses.

    Dear friend,

    An all inclusvie price of a little less than Rs. 50 lakhs may be a good deal. Rental value may not be much at this juncture, but your plan to go and live in the house in the next 2 to 3 years will make good reasoning for this purchase, if otherwise you are satisfied with the location and the existing facilities.. Please release the payments based on the actual progress of work and always keep last 10% against the handing over of the flat in all respects.

    ks2071746
    :o
    CommentQuote
  • Investment in the house should not be compared with rental incomes.

    House price will go up ove ra period of time. But for flats, it is not so in general
    CommentQuote
  • Originally Posted by Nataraajg007
    Investment in the house should not be compared with rental incomes.

    House price will go up ove ra period of time. But for flats, it is not so in general


    I agree. The increase in prices are more in the case of plot than the flats. However, seen from a long term perspective, even the flat prices go up much more than the FD interest. This is my own experience in buying a flat ( 850 sq. ft.) in Saidapet West in Chennai, which I bought for Rs. 8 lakhs in 1996 is now Rs. 27-30 lakhs being indicated by the wanting buyers, though I do not intend selling the flat now. Regards.

    ks2071746:)
    CommentQuote
  • Originally Posted by Nataraajg007
    Investment in the house should not be compared with rental incomes.

    House price will go up ove ra period of time. But for flats, it is not so in general


    when i said the same thing wiseman had put a long story saying property's value is based on the rent it fetches some p/e or r/e ratio and so on. I havent seen anybody calculating property value based on rents.
    maybe it can be quoted as an USP when selling the property.
    all thru 12 years in RE invstmnt. I have sold and bought props with neither a single buyer or seller discussing this point(rentals).
    bcoz never were rentals as high as FD intrest returns.
    this was in thread when i differentiated stocks and RE.
    stocks are priced on discounting 20-40- times the profit it is currently making. P/E ratio.
    I will try and fetch the thread.
    CommentQuote
  • Thanks for your inputs. This is a reply to all of your suggestions...
    The house is completed and ready to occupy next month. We have decided to give 20% at the time of hand over. Also the builder has accepted to pay VAT. SO now the house is 56 lacs with registration. I see rates of chettinadd housing(greenvilee) quoting at Rs.3600 psft in the same area. Infact farther from this place...Which is costing around 65-70 lacs. So I thought i did a better deal. Also I wouldn't say this as flat. I would say it's a townhome. I think flat and townhome makes a little difference giving the convinience of altering the part I won except the common wall. I forget to mention, the house is with one covered car parking...

    I did a little research before buying. Rather going for something in OMR where I have to wait 2-3 years paying EMI, I decided for ready to occupy house or flat. Also I wasn't sure how far I would use the facilities like gym, pool, club offered in OMR. Even our kids won't find time spending there. All of us know about the education system in Tamil Nadu..I felt for this price I wouldn't get this built area in any flat...Correct me if I am wrong...
    CommentQuote
  • Originally Posted by abk
    when i said the same thing wiseman had put a long story saying property's value is based on the rent it fetches some p/e or r/e ratio and so on. I havent seen anybody calculating property value based on rents.
    maybe it can be quoted as an USP when selling the property.
    all thru 12 years in RE invstmnt. I have sold and bought props with neither a single buyer or seller discussing this point(rentals).
    bcoz never were rentals as high as FD intrest returns.
    this was in thread when i differentiated stocks and RE.
    stocks are priced on discounting 20-40- times the profit it is currently making. P/E ratio.
    I will try and fetch the thread.


    Dear abk,

    I agree, the rent may not even be near to the FD interest rate. But what I meant was on the appreciation of the property value which definitely will be more than the FD interest rate as seen in a long term perspective of say 5 or 10 years. And not definetly in the short term, that too in today's property downtrend.

    ks2071746
    CommentQuote
  • Originally Posted by adhdec01
    Thanks for your inputs. This is a reply to all of your suggestions...
    The house is completed and ready to occupy next month. We have decided to give 20% at the time of hand over. Also the builder has accepted to pay VAT. SO now the house is 56 lacs with registration. I see rates of chettinadd housing(greenvilee) quoting at Rs.3600 psft in the same area. Infact farther from this place...Which is costing around 65-70 lacs. So I thought i did a better deal. Also I wouldn't say this as flat. I would say it's a townhome. I think flat and townhome makes a little difference giving the convinience of altering the part I won except the common wall. I forget to mention, the house is with one covered car parking...

    I did a little research before buying. Rather going for something in OMR where I have to wait 2-3 years paying EMI, I decided for ready to occupy house or flat. Also I wasn't sure how far I would use the facilities like gym, pool, club offered in OMR. Even our kids won't find time spending there. All of us know about the education system in Tamil Nadu..I felt for this price I wouldn't get this built area in any flat...Correct me if I am wrong...


    Good decision taken and go ahead. No investment in a flat for your own use either immediately or in the near future, say in another year or two, is not at all bad. You will see, it will prove good and right in the next 5 or 10 years or so when you are satisfied with the location, facilities which you may like etc. etc.

    ks2071746:)
    CommentQuote
  • Originally Posted by adhdec01
    Thanks for your inputs. This is a reply to all of your suggestions...
    The house is completed and ready to occupy next month. We have decided to give 20% at the time of hand over. Also the builder has accepted to pay VAT. SO now the house is 56 lacs with registration. I see rates of chettinadd housing(greenvilee) quoting at Rs.3600 psft in the same area. Infact farther from this place...Which is costing around 65-70 lacs. So I thought i did a better deal. Also I wouldn't say this as flat. I would say it's a townhome. I think flat and townhome makes a little difference giving the convinience of altering the part I won except the common wall. I forget to mention, the house is with one covered car parking...

    I did a little research before buying. Rather going for something in OMR where I have to wait 2-3 years paying EMI, I decided for ready to occupy house or flat. Also I wasn't sure how far I would use the facilities like gym, pool, club offered in OMR. Even our kids won't find time spending there. All of us know about the education system in Tamil Nadu..I felt for this price I wouldn't get this built area in any flat...Correct me if I am wrong...


    When I visited Chennai in Jan 2008 , I was 'quoted' Rs 45 Lacs per ground in Perumbakkam opposite to Akshaya Signature & adjoining Marriage Hall(which they said belongs to a Cinema Director).

    So the land may cost 16-20 Lacs during this recession time and construction cost must be less than 15-16 Lacs.

    Put the builders margin as 5 Lacs + Registration (1 to 1.5 Lacs) , It must not cost you more than Rs 42 Lacs(Taking the max in all aspects).

    But during this big recession & job losses & salary cuts it would definitely cost less than 35 Lacs.

    As its for your own living than the investment , No need to worry right now. Be Happy.

    In case if you want to sell the house in the next 5-10 years , You may regret .

    Until you decide to sell you will be extreamely happy as there is a fool here who will keep valuating your property in crores/billions.

    Congrats for owning a own house. Great .
    CommentQuote
  • Originally Posted by sethugm
    When I visited Chennai in Jan 2008 , I was 'quoted' Rs 45 Lacs per ground in Perumbakkam opposite to Akshaya Signature & adjoining Marriage Hall(which they said belongs to a Cinema Director).

    So the land may cost 16-20 Lacs during this recession time and construction cost must be less than 15-16 Lacs.

    Put the builders margin as 5 Lacs + Registration (1 to 1.5 Lacs) , It must not cost you more than Rs 42 Lacs(Taking the max in all aspects).

    But during this big recession & job losses & salary cuts it would definitely cost less than 35 Lacs.

    As its for your own living than the investment , No need to worry right now. Be Happy.

    In case if you want to sell the house in the next 5-10 years , You may regret .

    Until you decide to sell you will be extreamely happy as there is a fool here who will keep valuating your property in crores/billions.

    Congrats for owning a own house. Great .


    Dear friend,

    I believe, in a long term perspective, say 5 to 10 years, the flat he has purchased would give him atleast a little higher return in terms of the value of property as compared to the return in case he has put the amount in FD.

    ks2071746:o
    CommentQuote
  • For me, this seems to be bit expensive. Just my opinion.
    CommentQuote