Interesting calculation for RE Speculators:

Bought a 2BHK flat 1100sq ft1600psf in Jan2006. Total package:Rs.21L
Home loan of 20L (Rs.25,000 EMI) (Mistake: Went for minimum down payment)

In Jan2006-June2010 (4.5yrs=54months) total EMIpaid : 25,000*54months=Rs.13.5L
Outstanding Principal in June2010 was Rs.17L.

Got tired of heavy EMI and prepaid Outstanding Principal of Rs.17L in July2010.

Total Cost of flat = Total EMI + Outstanding Principal = Rs.13.5L+Rs.17L = Rs.30.5L

Earnings from flat
Rent:
Got possession in Jan2008. Avg Rent = Rs.10,000 pm-Rs2500 (maintenance+property tax) = Rs. 7,500pm
Jan2008-June2010 = 30months * Rs.7,500pm = Rs.2.25L
Income Tax Deductions:
Rs.1.5L interest per annum (availed for 2009, 2010) in 30%tax bracket.
Rs.1.5L*2yrs=Rs.3L (non taxable income). Tax saved = 30% of Rs3L = approx Rs.1L

After 4.5 yrs, cost of flat to me is:
-- = Rs.30.5L-2.25L-1L=Rs.27.25L

Similar resale flat in the scheme goes for approx Rs43L.

SO, If I sell flat now, my profit is Rs.43L-Rs.27.25L=approx 16L (in 4.5 yrs on investment of Rs.27.25L) before capital gains tax.

Assuming capital gains tax is 25%, net profit after tax is Rs.12L

CAGR:
One Time Investment: Rs.27.25L
Current Value: 27.25L+12L(profit): approx 39L
Over duration of 4.5yrs
CAGR of my investment: 8.3%
( http://www.jagoinvestor.com/calculators/html/Return_Calculator.html )

Considering inflation of 8%PA, my net profit is almost 0%.

Note that I bought flat at approx Rs.1900psf(all inclusive) and able to sell at 3900psf(all inclusive) and my profit is still negligible.

What if you buy the same flat now at 3900psf for investment? AT what price you need sell this flat to make some decent profit?

Note that I bought flat at approx Rs.1900psf(all inclusive) and able to sell at 3900psf(all inclusive) and my profit is still negligible.

What if you buy the same flat now at 3900psf for investment? AT what price you need sell this flat to make some decent profit?

Note that I bought flat at approx Rs.1900psf(all inclusive) and able to sell at 3900psf(all inclusive) and my profit is still negligible.

What if you buy the same flat now at 3900psf for investment? AT what price you need sell this flat to make some decent profit?

Note that I bought flat at approx Rs.1900psf(all inclusive) and able to sell at 3900psf(all inclusive) and my profit is still negligible.

What if you buy the same flat now at 3900psf for investment? AT what price you need sell this flat to make some decent profit?

Note that I bought flat at approx Rs.1900psf(all inclusive) and able to sell at 3900psf(all inclusive) and my profit is still negligible.

What if you buy the same flat now at 3900psf for investment? AT what price you need sell this flat to make some decent profit?

Note that I bought flat at approx Rs.1900psf(all inclusive) and able to sell at 3900psf(all inclusive) and my profit is still negligible.

What if you buy the same flat now at 3900psf for investment? AT what price you need sell this flat to make some decent profit?

Note that I bought flat at approx Rs.1900psf(all inclusive) and able to sell at 3900psf(all inclusive) and my profit is still negligible.

What if you buy the same flat now at 3900psf for investment? AT what price you need sell this flat to make some decent profit?

Note that I bought flat at approx Rs.1900psf(all inclusive) and able to sell at 3900psf(all inclusive) and my profit is still negligible.

What if you buy the same flat now at 3900psf for investment? AT what price you need sell this flat to make some decent profit?

Note that I bought flat at approx Rs.1900psf(all inclusive) and able to sell at 3900psf(all inclusive) and my profit is still negligible.

What if you buy the same flat now at 3900psf for investment? AT what price you need sell this flat to make some decent profit?

Note that I bought flat at approx Rs.1900psf(all inclusive) and able to sell at 3900psf(all inclusive) and my profit is still negligible.

What if you buy the same flat now at 3900psf for investment? AT what price you need sell this flat to make some decent profit?

Note that I bought flat at approx Rs.1900psf(all inclusive) and able to sell at 3900psf(all inclusive) and my profit is still negligible.

What if you buy the same flat now at 3900psf for investment? AT what price you need sell this flat to make some decent profit?

Note that I bought flat at approx Rs.1900psf(all inclusive) and able to sell at 3900psf(all inclusive) and my profit is still negligible.

What if you buy the same flat now at 3900psf for investment? AT what price you need sell this flat to make some decent profit?

Note that I bought flat at approx Rs.1900psf(all inclusive) and able to sell at 3900psf(all inclusive) and my profit is still negligible.

What if you buy the same flat now at 3900psf for investment? AT what price you need sell this flat to make some decent profit?

Note that I bought flat at approx Rs.1900psf(all inclusive) and able to sell at 3900psf(all inclusive) and my profit is still negligible.

What if you buy the same flat now at 3900psf for investment? AT what price you need sell this flat to make some decent profit?

Note that I bought flat at approx Rs.1900psf(all inclusive) and able to sell at 3900psf(all inclusive) and my profit is still negligible.

What if you buy the same flat now at 3900psf for investment? AT what price you need sell this flat to make some decent profit?

Note that I bought flat at approx Rs.1900psf(all inclusive) and able to sell at 3900psf(all inclusive) and my profit is still negligible.

What if you buy the same flat now at 3900psf for investment? AT what price you need sell this flat to make some decent profit?

Note that I bought flat at approx Rs.1900psf(all inclusive) and able to sell at 3900psf(all inclusive) and my profit is still negligible.

What if you buy the same flat now at 3900psf for investment? AT what price you need sell this flat to make some decent profit?
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