Suppose one holds a flat in NCR region worth 65 lacs (40 self + 25 loan).

This person has no other property but has a good salary job, he thinks 65 lacs flat is a blocked money if he himself stays in that flat, its better to sell this flat and buy another one of low cost.

His view : Sell this flat, return 25 loan & out of 40 lacs buy other flat worth 35 lacs (25 self + 15 lacs loan). Keep 15 lacs in FD's.

Members, please share your views what could be the best options to go with

Thanks
LChand
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  • Originally Posted by ashokyadav
    I am suggesting this thinking I am that person..

    Before selling that 65 lks flat .. I'll do some research...

    1. Why I am selling this flat? If its for making investment from that money. Is there surety that I'll get good return from that new property than existing one... If this existing flat is LP kinda society, then surely It'll keep appreciating.. In this case, I'll try to repay the home loan and make this flat free as early as possible. Then later on..after few years I'll make new investment...
    2. Now I have decided that I'll sell this flat any how.. then I'll buy 2 properties... one to live, ready to move (without any loan) and other to rent out...(with loan, can be under construction).. So that both properties appreciate side by side..

    Actually, many youngster are in this situation. Though many have purchased flats in good projects which are continuously appreciating but the loans are also major...hence today's purchased property if appreciates from X (15 self + X-15 from bank) to X+25 in 2-3 years time, isn't it good to move to some property worth 40 lacs (15 self + 25 appreciation got from previous flat)..this way..one makes his apartment without loan .but again each individual has his own way of thinking & risk appetite.....the then situation after 2-3 years may give clear picture which way to go...
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  • When one thinks about RE in short term, one tends to think like this. RE is not a 2-3 year game. It is a long term game. 10 years or so.

    FD is never as good as RE. You have to pay tax on it and that erodes it also.

    And the first house should not be for "how much will I make in 3 years time" kind of thinking. It gives you a security, a base, a foundation and all these things are priceless.

    And now I ask you one question: lets say one makes 1 Crore from FDs or stock market or gold. When you finally take out that 1 Crore, what will you do with it? Eat food? NO! Buy clothes? NO. You will have to put it in a house/flat. So when one makes big bucks from an investment, he will most likely use that money in RE.

    People may sell FD, gold, MF, stocks to buy RE. But never the other way around.

    So DONT liquidate your RE assets for something as silly as FD. BAD CHOICE.

    There are better ways to return a loan. But dont sell your house( or a bedroom of that house).

    My advice to youngsters:

    1) Buy a house as early as possible in your professional life.

    2) Buy the max that you can afford. You will never be able to buy cheaper RE later.

    3) Reducing a loan is a nice idea but that should not be the "biggest insecurity"

    4) After a few years if you have more money, buy a second house.

    House is security. You can sell it later to pay back a loan also. So why do it now.
    CommentQuote
  • Originally Posted by Jassowal
    When one thinks about RE in short term, one tends to think like this. RE is not a 2-3 year game. It is a long term game. 10 years or so.

    FD is never as good as RE. You have to pay tax on it and that erodes it also.

    And the first house should not be for "how much will I make in 3 years time" kind of thinking. It gives you a security, a base, a foundation and all these things are priceless.

    And now I ask you one question: lets say one makes 1 Crore from FDs or stock market or gold. When you finally take out that 1 Crore, what will you do with it? Eat food? NO! Buy clothes? NO. You will have to put it in a house/flat. So when one makes big bucks from an investment, he will most likely use that money in RE.

    People may sell FD, gold, MF, stocks to buy RE. But never the other way around.

    So DONT liquidate your RE assets for something as silly as FD. BAD CHOICE.

    There are better ways to return a loan. But dont sell your house( or a bedroom of that house).

    My advice to youngsters:

    1) Buy a house as early as possible in your professional life.

    2) Buy the max that you can afford. You will never be able to buy cheaper RE later.

    3) Reducing a loan is a nice idea but that should not be the "biggest insecurity"

    4) After a few years if you have more money, buy a second house.

    House is security. You can sell it later to pay back a loan also. So why do it now.



    Yes I agree too...
    Only RE is certain at the moment... nothing else.. and it looks bright atleast for next 5-6 yrs..

    If any RE investment is in good area.. then it willl atleast give 40%-50% atleast withing 3-4 yrs..
    CommentQuote
  • Originally Posted by Jassowal
    When one thinks about RE in short term, one tends to think like this. RE is not a 2-3 year game. It is a long term game. 10 years or so.

    FD is never as good as RE. You have to pay tax on it and that erodes it also.

    And the first house should not be for "how much will I make in 3 years time" kind of thinking. It gives you a security, a base, a foundation and all these things are priceless.

    And now I ask you one question: lets say one makes 1 Crore from FDs or stock market or gold. When you finally take out that 1 Crore, what will you do with it? Eat food? NO! Buy clothes? NO. You will have to put it in a house/flat. So when one makes big bucks from an investment, he will most likely use that money in RE.

    People may sell FD, gold, MF, stocks to buy RE. But never the other way around.

    So DONT liquidate your RE assets for something as silly as FD. BAD CHOICE.

    There are better ways to return a loan. But dont sell your house( or a bedroom of that house).

    My advice to youngsters:

    1) Buy a house as early as possible in your professional life.

    2) Buy the max that you can afford. You will never be able to buy cheaper RE later.

    3) Reducing a loan is a nice idea but that should not be the "biggest insecurity"

    4) After a few years if you have more money, buy a second house.

    House is security. You can sell it later to pay back a loan also. So why do it now.

    Thanx for the clear reply.
    CommentQuote
  • Good post by jassowal and others.
    Lchand,
    basically what i believe is as follows-
    One should never compare RE with FDs or Cash or stock. Often people tend to do that. RE is very long term whereas others are short term.
    RE is the only illiquid asset where capital is involved, others are liquid expenses.
    CommentQuote
  • Originally Posted by Jassowal
    When one thinks about RE in short term, one tends to think like this. RE is not a 2-3 year game. It is a long term game. 10 years or so.

    FD is never as good as RE. You have to pay tax on it and that erodes it also.

    And the first house should not be for "how much will I make in 3 years time" kind of thinking. It gives you a security, a base, a foundation and all these things are priceless.

    And now I ask you one question: lets say one makes 1 Crore from FDs or stock market or gold. When you finally take out that 1 Crore, what will you do with it? Eat food? NO! Buy clothes? NO. You will have to put it in a house/flat. So when one makes big bucks from an investment, he will most likely use that money in RE.

    People may sell FD, gold, MF, stocks to buy RE. But never the other way around.

    So DONT liquidate your RE assets for something as silly as FD. BAD CHOICE.

    There are better ways to return a loan. But dont sell your house( or a bedroom of that house).

    My advice to youngsters:

    1) Buy a house as early as possible in your professional life.

    2) Buy the max that you can afford. You will never be able to buy cheaper RE later.

    3) Reducing a loan is a nice idea but that should not be the "biggest insecurity"

    4) After a few years if you have more money, buy a second house.

    House is security. You can sell it later to pay back a loan also. So why do it now.

    Sir,

    The propecy that " you will never be able to buy cheaper RE later" is dobtful now.Go to the resale sites on N/GN, the option are better than those before the GreNO fiasco.SO the prices are correcting and you can buy cheaper realty LATER.
    CommentQuote