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Buying A 1Cr 2BHK - Mathematic Impossibility

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Buying A 1Cr 2BHK - Mathematic Impossibility

Last updated: January 16 2014
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  • Buying A 1Cr 2BHK - Mathematic Impossibility

    I am always confused regarding how common man can purchase flat(2bhk) of 1 crore? Who is willing to pay high emi for 20 years may be 25 years?

    Isn't it better to stay on rent for 14000p.m than to buy a 1 crore flat at hefty emi??

    Suppose someone buys 1 cr. flat. Then max loan he can avail is 80 lacs. He has to give 20 lacs in cash!!!

    Now suppose person pays 20 lacs in cash. Then What??

    He has to give around 80000 rs. emi per month. Can a common man do that???

    This thing should be understood by the property vendors.

    Now just think. To pay emi of 80000 p.m. bank says that emi amount should be 40 % of the salary p.m.

    40% of x = 80000 means x = (80000*100)/40 which is equal to rs.200000..

    Now every tom dick and harry of delhi property dealer says 2 bhk is 1 crore.

    How many of people aged 35 years gets 200000 p.m. salary?? Only a fraction lets say 1 in 1,00,000 (might be).

    Then who can buy such a 2bhk flat??

    A person getting 2L p.m. should not be living in 2 bhk DDA flats!! He should deserve much much better flats I suppose.

    What you people should say??

    Think from common man's angle and we know that 95% of people in Delhi gets monthly salary less than 50,000...

    Who decides such irrelevant and meaningless prices?? All this seems to be fake. A US sub prime crisis like situation should come here because enough is enough. Our property dealers and their gangs should be bashed up.
  • #2

    #2

    Re : Buying A 1Cr 2BHK - Mathematic Impossibility

    I can understand your anguish.

    Rs 1 crore flat is manageable if both husband and wife are working. If both are earning Rs 10 lakhs per year, then combined income is Rs 20 lakhs per year, and they can get a loan of Rs 80 lakhs. If you are 30 years of age and educated, Rs 10 lakhs annual salary is not that hard to get.

    Rs 20 lakhs of savings is another matter. It's not easy to save Rs 20 lakhs by the age of 30. A lot of people get this down-payment money from their parents or their in-laws who have savings or throught their retirement money.

    As for houses that are Rs 3 crore or above, most salaried people buying them are moving up from a smaller flat i.e. selling an existing flat to buy a new one and taking a loan for the rest.

    Generally, in India real estate prices are high because of black money. All this black money/ bribe money goes into real estate and pushes up prices for everyone else. If someone has Rs 5 cr of black money lying in his house, he will go the next day and buy some real estate.

    Originally posted by monlal View Post
    I am always confused regarding how common man can purchase flat(2bhk) of 1 crore? Who is willing to pay high emi for 20 years may be 25 years?

    Isn't it better to stay on rent for 14000p.m than to buy a 1 crore flat at hefty emi??

    Suppose someone buys 1 cr. flat. Then max loan he can avail is 80 lacs. He has to give 20 lacs in cash!!!

    Now suppose person pays 20 lacs in cash. Then What??

    He has to give around 80000 rs. emi per month. Can a common man do that???

    This thing should be understood by the property vendors.

    Now just think. To pay emi of 80000 p.m. bank says that emi amount should be 40 % of the salary p.m.

    40% of x = 80000 means x = (80000*100)/40 which is equal to rs.200000..

    Now every tom dick and harry of delhi property dealer says 2 bhk is 1 crore.

    How many of people aged 35 years gets 200000 p.m. salary?? Only a fraction lets say 1 in 1,00,000 (might be).

    Then who can buy such a 2bhk flat??

    A person getting 2L p.m. should not be living in 2 bhk DDA flats!! He should deserve much much better flats I suppose.

    What you people should say??

    Think from common man's angle and we know that 95% of people in Delhi gets monthly salary less than 50,000...

    Who decides such irrelevant and meaningless prices?? All this seems to be fake. A US sub prime crisis like situation should come here because enough is enough. Our property dealers and their gangs should be bashed up.

    Comment

    • #3

      #3

      Re : Buying A 1Cr 2BHK - Mathematic Impossibility

      Originally posted by Amitau View Post
      I can understand your anguish.

      Rs 1 crore flat is manageable if both husband and wife are working. If both are earning Rs 10 lakhs per year, then combined income is Rs 20 lakhs per year, and they can get a loan of Rs 80 lakhs. If you are 30 years of age and educated, Rs 10 lakhs annual salary is not that hard to get.

      Rs 20 lakhs of savings is another matter. It's not easy to save Rs 20 lakhs by the age of 30. A lot of people get this down-payment money from their parents or their in-laws who have savings or throught their retirement money.

      As for houses that are Rs 3 crore or above, most salaried people buying them are moving up from a smaller flat i.e. selling an existing flat to buy a new one and taking a loan for the rest.

      Generally, in India real estate prices are high because of black money. All this black money/ bribe money goes into real estate and pushes up prices for everyone else. If someone has Rs 5 cr of black money lying in his house, he will go the next day and buy some real estate.

      What I have heard is what black money owner will give lot of money in cash and buying price mentioned on registered documents will be very small. Is this scenario you are talking about?
      I really wonder why CCI is not taking any action against companies which are hoarding land. CCI had promptly taken action against cement companies which had raised rates and hoarded cement. However, CCI is not taking any action against errant builders which have not completed a project on land purchased 5 years back.

      Comment

      • #4

        #4

        Re : Buying A 1Cr 2BHK - Mathematic Impossibility

        its simple calculation

        sell old property / get some money from parents / in laws / take some personal loan for the down payment

        then

        bribe bankers / agents or get the document changed - get the maximum loan -

        buy the property - start to live there - be happy till the time one can manage the emi and the rates are increasing for the property

        now once the tipping point comes - sell the property if not able to pay the emi

        if you cannot sell - let the property go for letigation - its easy because of lax judicial system - once the case is going out of hand - go and plea with the court that you cannot pay the money anymore or more than a particular amount - get the loan restructured

        worse case one can loose the job cannot pay the emi - it takes 3 quarter for the loan to become default - so that is 9 months = after that pay something to keep the loan alive - then after a quarter or so don't pay again so another 9 months - 2 years are gone - now let the bank go to the court - hire a lawyer who is specialist in delaying the matter for generation - if in between you are getting much higher price than you paid for the property - sell it and settle the loan with bank - banker would be happier to wave the interest and may be some principal in tune of 50% of the intererest already paid

        so now you got the money after selling the property with settled bank loan - and with that free money go buy something ready to move all in hard cash because you will not get a loan as this default will reflect in cibil report

        and don't forget when the case is in the court you do not pay anything = so no rent , no emi - free mai rahna .


        makes sense - never do this - its a shaitani idea but perfectly legal just exploring the loopholes of the system.

        and if you do do this be prepared for irretiating phone calls every hr to you, your friends , relatives etc etc - so if you have thick skin and don't care about the society , relative a nice way to make money.

        ------never do this--- it will hurt the economy.

        rohit

        Comment

        • #5

          #5

          Re : Buying A 1Cr 2BHK - Mathematic Impossibility

          Delhi property is not for salaried person with only white money.
          Forget 2 lac even with 3lac p/m salary after tax forget any decent property.
          In Delhi with proper parking n decent society.
          Decent property in Delhi is for salaried person with loads under hand income.
          CA who r working day n night converting black to white.
          Small or big shopkeepers n businessmen who never show profit n their balance sheets.

          Comment

          • #6

            #6

            Re : Buying A 1Cr 2BHK - Mathematic Impossibility

            well u are right however 1 to 2 crore has become a norm nowadays for any good society
            so the question raised in this thread is an universal appeal

            rohit

            Comment

            • #7

              #7

              Re : Buying A 1Cr 2BHK - Mathematic Impossibility

              monlal

              i agree with u. but all those buying nwdays r those who r selling one property (which they hav got free of cost frm their dad or grandfather) and putting that money in other property and then giving their own name as an owner of tht property. if u ask them the background u will realise tht it has been purchased by getting money frm other property, of their forefathers or parents. 99% of these people cant make that much money in their whole of lifetime if they try to do that using their jobs. its just shuffling of properties which they r best at and then giving their name to it.

              Comment

              • #8

                #8

                Re : Buying A 1Cr 2BHK - Mathematic Impossibility

                You need to have money upfront ...now even the DDA flats/plots in various schemes won in a draw are being allotted at premium rates ..no way out mate ...
                Either you should have big business or some old ancestral property or go out of India & work for some years to make down payment easier .
                In Delhi an average 3BHK flat with decent surroundings is not less than 2 crores .

                Comment

                • #9

                  #9

                  Re : Buying A 1Cr 2BHK - Mathematic Impossibility

                  better idea that can beat property dealers trap

                  If a person has 50 lacs cash(at 35 yrs. age), then it is useless to buy 1 crores flat now and then give rs.50000 emi for 25 years!!!

                  Instead, hold your 50 lacs in bank fd,pf,ppf,rd. you will get 9% interest.

                  Split the money between husband and wife to avoid more tax payout.

                  Then, save 60000 rs. every month from the combined salary for the next 3 to 3.5 years. This way you can easily save 11-12 lacs per year which will grow to 15-16 lacs in the following years.

                  Then 1 crore rs. will automatically comes and enjoy life.

                  Even if you don't buy house, u will get 9 lacs p.a. as interest amount from 1 crore. After just 3.5 years. Thats sound interesting. Property dealers cannot do anything in that.

                  To hell with their TEJI. Remember Anything goes up has to come down.
                  Thinking this way may be if prices crash in future (in 5 years) then you will be having both your hands in Milkfood Ghee.

                  Enjoy life. To hell with their property JAAL.

                  Comment

                  • #10

                    #10

                    Re : Buying A 1Cr 2BHK - Mathematic Impossibility

                    don't buy 1 crore 2 bhk flat if u have 50 lac cash

                    if you have 50 lac cash, don't buy 1 crore flat as it is a complete rubbish. 50 lac down payement and still 50 lac short of 2bhk is something which is hard to be digested.

                    instead of paying 50,000 emi, its better to get interest of 37500 p.m. from your existing 50 lacs cash. So in this way, the bank PAYS you instead we pay them the EMI.

                    paying 50000 emi for 50 lac loan and that too for 20 years is unrealistic. Instaed u get one crore after 3 .5 years according to what i have shown in the calculations.

                    Comment

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