### ATS Kocoon, ATS, Sector 109, Gurgaon

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amit.bhalla

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- Moreover

We can safely put the Dp money in FD, Earn an interest of 9 - 10 % p.a.

(Assuming outflows to be 40 % in year 1 , 40 % in year 2 and 20 % in year 2 )

Net interest earned = (0.8*0.1 + 0.4*.1 + 0.2* 0.1) DP = 0.14 i.e. 14 %

So even if we put the DP money in FD and buy in CLP we get an earning of over 14 % over 3 years ( Most conservative and without considering compounding effect ) Actually it will be around 15-16 %

DP discounts are usually 10 % - 12 % , so i guess we can still earn around 3 % - 5 % by putting DP money in FD and buying in CLP at a percieved higher priceCommentQuote0Flag - Originally Posted by prasantnitrkMoreover

We can safely put the Dp money in FD, Earn an interest of 9 - 10 % p.a.

(Assuming outflows to be 40 % in year 1 , 40 % in year 2 and 20 % in year 2 )

Net interest earned = (0.8*0.1 + 0.4*.1 + 0.2* 0.1) DP = 0.14 i.e. 14 %

So even if we put the DP money in FD and buy in CLP we get an earning of over 14 % over 3 years ( Most conservative and without considering compounding effect ) Actually it will be around 15-16 %

DP discounts are usually 10 % - 12 % , so i guess we can still earn around 3 % - 5 % by putting DP money in FD and buying in CLP at a percieved higher price

very very good point

all this is getting alined nowCommentQuote0Flag - Originally Posted by vb2309very very good point

all this is getting alined now

Don't forget the tax on interest .. If you are in 30% bracket, your net gain would be 14*0.7 = 9.8% only ..

Moreover, your spread should be 40%, 40%, 20% for the first three years if you expect the builder to make the apartment at good pace. You anyway have to pay 10% upfront at the time of booking and 5-10% at the time of possession for both DP and CLP cases.CommentQuote0Flag - post tax returns

you should also incorporate the taxation angle. Post tax returns will be much lower for FDs since they will be taxed at peak rate.

Originally Posted by prasantnitrkMoreover

We can safely put the Dp money in FD, Earn an interest of 9 - 10 % p.a.

(Assuming outflows to be 40 % in year 1 , 40 % in year 2 and 20 % in year 2 )

Net interest earned = (0.8*0.1 + 0.4*.1 + 0.2* 0.1) DP = 0.14 i.e. 14 %

So even if we put the DP money in FD and buy in CLP we get an earning of over 14 % over 3 years ( Most conservative and without considering compounding effect ) Actually it will be around 15-16 %

DP discounts are usually 10 % - 12 % , so i guess we can still earn around 3 % - 5 % by putting DP money in FD and buying in CLP at a percieved higher priceCommentQuote0Flag - ATSOriginally Posted by rmnoidaDon't forget the tax on interest .. If you are in 30% bracket, your net gain would be 14*0.7 = 9.8% only ..

Moreover, your spread should be 40%, 40%, 20% for the first three years if you expect the builder to make the apartment at good pace. You anyway have to pay 10% upfront at the time of booking and 5-10% at the time of possession for both DP and CLP cases.

But i m sure the cost will still come out to be lower , as finance guys in builders office are not fool

Moreover i have not yet talked about the risk premium and liquidity of the money in a fd vis a vis in DP

Other disadvantages of DP : Resale is difficult etc etc etc

So for 10 - 12 % discount i still believe CLP is a better propositionCommentQuote0Flag - Originally Posted by prasantnitrkBut i m sure the cost will still come out to be lower , as finance guys in builders office are not fool

Moreover i have not yet talked about the risk premium and liquidity of the money in a fd vis a vis in DP

Other disadvantages of DP : Resale is difficult etc etc etc

So for 10 - 12 % discount i still believe CLP is a better proposition

You are right in general .. It all depends what is the gap between DP and CLP price. For ATS:

DP - 3500 - Gap is 22%

DP - 3800 - Gap is 15.5%

DP - 4000 - Gap is 11.1%CommentQuote0Flag - What i have assumed is that 10% will go on day 0, 30% in year 1, 40% in year 2 and 20% in year 3 and 10% in year 4...

Most of the projects in Ggn follow this pattern onlyCommentQuote0Flag - Emaar PG or ATS

Amit Bhai,

One final time,

Emaar PG or ATS at 4500Rs....

Can you please tell me which one would be better, overall? In your view.

Others please contribute to my cause

Thanks a tonne for all the replies till now.CommentQuote0Flag - ATS,ANY DAY MY POV,JUST GOING BY THE TRACK RECORD,DO YOU WANT TO BUY EMAAR EVEN AFTER STORIES OF POOR QUALITY OF CONSTRUCTION -COMMON WEALTH GAMES VILLAGE(EACH FLAT IN CRORES)ON AIR,ATS HAS A PROVEN TRACK RECORD FOR GOOD QUALITY CONSTRUCTION AS EVIDENT FROM THERE PREVIOUS PROJECTS,ISNT IT IMP THAT THE HOUSE YOU ARE LIVING/BUYING BE OF GOOD QUALITY,LOCATION WISE PG MAY SEEM TO BE SLIGHTLY BETTER,THAT IS IF THE HIGHWAYS KICK INCommentQuote0Flag
- ATS or Emaar PG

Thanks.

Please continue providing your views.

Do not stop..

They are highly appreciated. Thanks.CommentQuote0Flag - It is indeed a very nice and detailed calculation sheet. Kudos to Amit.

I give my POV on this:

ROI appears to be quite low ranging from 9 to 14%.

The reason could be

1) BSP of Rs 9000/ appears to be low considering the appreciation in the past in real estate in particular Gurgaon dwarka express way.

2) Interest payble is considered but the interest amount paid to contains principle & interest both, so principal will reduced accordingly after 5 years.

3) It appears that ROI is considered by taking total interset paid on zero date, but actually interest paid is scattered so when this needs to bring to zero date, then the intrerst amount should go down.

I think all this should increase ROI. any views.

Originally Posted by amit001Have a look.. I have taken into account 80% bank loanCommentQuote0Flag - Saluja,

Do not get confused, do what your gut tells. Still my vote is with ATS.

Now consider the fact that ATS has not announced 4500/ on CLP so you have to check on this. Also the delivery time...not due to ATS but D way itself.

If it suits you, ATS will be my recommendation.CommentQuote0Flag - ATS or Emaar PG

Thanks for the advice.

I am getting jittery because excessive hype about ATS might not result into exobitant launch price in November, and then I might not invest in Emaar PG also due to price revision!

At the same time, I want to invest in the best project (as it is primaily for end use, and near to Delhi)

ATS of course is a given choice if both are launched at same price and same time.

Comments awaited.

SalujaCommentQuote0Flag - Bounded rationality

There is a concept called 'bounded rationality' in decision making - rationality of individuals is limited by the information they have, the cognitive limitations of their minds, and the finite amount of time they have to make decisions. So my friend, you will never have 100% information. Trust your gut.

Originally Posted by salujaThanks for the advice.

I am getting jittery because excessive hype about ATS might not result into exobitant launch price in November, and then I might not invest in Emaar PG also due to price revision!

At the same time, I want to invest in the best project (as it is primaily for end use, and near to Delhi)

ATS of course is a given choice if both are launched at same price and same time.

Comments awaited.

SalujaCommentQuote0Flag - Well saidOriginally Posted by IndianaThere is a concept called 'bounded rationality' in decision making - rationality of individuals is limited by the information they have, the cognitive limitations of their minds, and the finite amount of time they have to make decisions. So my friend, you will never have 100% information. Trust your gut.

Saluja Ji

U hv got sooo much information...time to ,ake decision.

Vb2309CommentQuote0Flag