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- Hi Folks,
Need some advice! I am contemplating on buying an apartment in a society that is most likely to be redeveloped within a year and learnt from the current residents that talks have been already initiated with different builders for that purpose. But the current owner is quoting a above market rates. For 1 bedroom he is quoting 55 lakhs whereas the ongoing rate is around 45 to 47 lakhs. Do you think it is going to be wise to pay extra amount and secure the unit considering the society will be redeveloped? I know it might make sense but i need some other opinions here.
Thanks in advance!
Unless you mention the location its difficult to even judge the worth of the property that you are talking about.... 'coz you will find 1BHK even for 1cr (or even more) if it is in Malabar hill area :)
But a general advice will be to meet the builder personally which is proposing to redevelop that society to understand his views about the actual starting point of the redevelopment project.... 'coz sometimes it might take much more time than expected for the things to get moving in the redevelopment projects.... since everyone in the society has to agree to it and there are always some issues on this front.
good luck with that...
- Thanks Bhushan! The property is in Jogeshwari(E). From what i have learnt almost everyone is the society has agreed for redevelopment and apparently the builder is offering 2BHK for residents who currently have 1BHK in that building. What do you think?
Still need inputs from other members too.
- Yes it is a good deal.. but why is the current owner selling.. 2 BHK at todays market rate seems reasonable.. but how big is the apartment.. who is the builder/(s) they are talking to
Though re development is a quick way to achieve capital appreciation.. but it is a long process and all members of the society need to agree.. on the terms.. How much is he ready to put into the corpus.. how much additional area he is offering.. which floors he is ready to give to members. Sometimes these talks end quickly but mostly they they drag on..
Any old building you buy it is a potential for redevelopment.. does not mean everything is going for redevelopment in the immediate future..
I know of buildings where people have been talking since 2003..
Flip side.. maintenance suffers till it goes for re development..
It is a tough call.. wish we all had a crystal ball to predict how it will progress..
Still need inputs from other members too.
Thanks for the reply..some nice points indeed. As far as the owner selling it, he's in dire need to money to take care of his family's urgent medical problems, hence needs cash. The current apartment is 565 sqft and the builder is willing to give somewhere around 900+ something sq. ft 2BHK flat, haven't got a chance to find out the exact area, just heard that the construction might start in another month or two. Also the fact the builder is going to give some cash amount to the current residents plus the market rate rent until the building becomes ready makes it a good deal i think.
Do you still think it's a steal? Also i didn't quite catch the flip side you mentioned.
- Still waiting for responses!
- Yeah it is a good deal...
Supposing the re development talk fails.. then people are un willing to spend on maintenance and older building needs it..
Giving of money is common during redevelopment.. which is to be part of the corpus.. However I am surprised he is paying cash.. It will be cheque..
Check out CG's implications..
- Sharpj, thanks for your responses. Actually the builder will be paying through check and not cash. That was mistake on my part.
Also one more thing the resident can choose the floor of their liking.
I am hoping that the apartment deal goes through smoothly.
- Hi Amol. Like Sharpj mentioned that redevelopments sometimes take much longer than expected...I personally have friends whose buildings were to go for redevelopment 2 years back and is still struggling and another who is shifting residences as their redevelopment building is yet to come up after 3 years (it may take another 2 years). Also take the interest cost into account for eg. If you are putting in 50 lakhs now, 10% you are also putting in 5 lakhs more per year. However if the deal suits your need and budget and you can wait, then it seems like a decent deal.