Guys have been member of this forum from 5-6 months now.....
have been searching 2 bhk in pune since then...

By and Large the news and forum and all says the prices will reduce, I have seen prices at the level where they were in mar-apr....no rise no drop...

personally i didn't found any project worth the money they are asking...in Kharadi (45L)/hadapsar(40L)/wagoli(30-35L) areas...

currently staying at a very gud 1 bhk flat for 7K i more then happy with this deal....reason to purchase flat is strong pressure from relatives to invest 'something' in RE....

This is preface.....now Question....

I have 25L in cash, of my own.....would like to keep 5L with me as liquid assets and can invest 20L at one go.......still need somewhere around 15L of loan to invest in RE.....

What you guys have to suggest, should I invest in RE at this stage or keep that 20L in FDs and earn 2L a year....

what will you (ofcourse many seniors here) do if in the situation like of mine.....
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  • Hi,

    There can be so many answers and so many combinations to this question. Here are some of the options which you may choose -

    1) Invest in Flat - take minimum loan and enjoy stay in your own house
    2) Invest in any commercial shop and start your own business
    3) Rent any shop in good locality and use the money you have as capital
    4) Purchase land around pune in acres and sell after some years ( pure investment )
    5) Combo of land purchase and 1 BHK flat purchase which will serve your home purpose and can have investment also.

    Keep FD as last option as thisway gives the lowest return.

    Hope this helps

    Regards
    AD
    CommentQuote
  • Originally Posted by aedhole
    Hi,

    There can be so many answers and so many combinations to this question. Here are some of the options which you may choose -

    1) Invest in Flat - take minimum loan and enjoy stay in your own house
    2) Invest in any commercial shop and start your own business
    3) Rent any shop in good locality and use the money you have as capital
    4) Purchase land around pune in acres and sell after some years ( pure investment )
    5) Combo of land purchase and 1 BHK flat purchase which will serve your home purpose and can have investment also.

    Keep FD as last option as thisway gives the lowest return.

    Hope this helps

    Regards
    AD

    I personly liked the ideas 2 and 3. Depending on whether you want you do your own business or earn rent you can choose either of the two
    CommentQuote
  • Originally Posted by aedhole
    Hi,

    There can be so many answers and so many combinations to this question. Here are some of the options which you may choose -

    1) Invest in Flat - take minimum loan and enjoy stay in your own house
    2) Invest in any commercial shop and start your own business
    3) Rent any shop in good locality and use the money you have as capital
    4) Purchase land around pune in acres and sell after some years ( pure investment )
    5) Combo of land purchase and 1 BHK flat purchase which will serve your home purpose and can have investment also.

    Keep FD as last option as thisway gives the lowest return.

    Hope this helps

    Regards
    AD



    My doubt is mainly intended to jump in RE at current rates....or just keep them into FD....and earn 10% yearly interest with full liquidity....
    CommentQuote
  • Are you taking the tax into account when you say 2L return on 20L FD? even at 10% return, (assuming maximum tax slab of 30%) the actual returns will be quite less.

    FD doesn't look all that attractive in terms of returns after tax when the actual inflation is much higher. (not the official govt. figure, the *actual* inflation).

    Cheers.
    CommentQuote
  • My suggestion

    Land is not common man business now a days... if you want peace of mind then investe in flat/shop.
    The current laws doesn't provide much protection if you want to give your shop on rent and also there is risk that tenant may not leave your shop if his business is running good. Also with this amount you can buy only 2000 sq ft of shop which is not a good sizefor majority of business. The loan for commercial is expensive and hence not considered here.

    I will suggest you to buy 1 BHK in already established good society and enjoy home loan benefit.

    Pl take care of following while buying 1 BHK-
    1. Society is complete with conveyance deed and completion certificate is obtained by business. No water issues.. very important.
    2. Land has clear title on which society has been built and it is not on slope of hill / on hill top. Best way to hire for good lawyer.
    3. Rest choice of location as per your convenience and you will have benefit to see what infrastructure is currently exists rather than proposed DP road promises of under construction.
    4. You can take loan only upto interest which will provide you max benefit of home loan and still you will save lot of cash which you can invest in other investment options.(i would have prefer FD)

    In current RE situation buying in long running project is risky as nobody on earth will be able to predict what is exactly ahead for RE. However we have seen negative points of RE in various forums so be carefully if you want to buy in under construction.

    The current time is not bad for buying 1 BHK as I dont expect major fall in 1 BHK price/rent. However if you want to buy 2 BHK then you will have to wait for 6 months.

    All the best for whatever you decide ! but do let us know what you have decided at the end :)
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  • Originally Posted by rajtjrll
    My doubt is mainly intended to jump in RE at current rates....or just keep them into FD....and earn 10% yearly interest with full liquidity....


    If I had that much amount of money, I would
    1. Buy land if not in pune then in some other tier-2,3 city
    2. Combination of FD/liquid funds/stocks...

    With current scenario...I havent seen rates going up...I am also looking for flat since last 7-8 months and havent seen rates going up...
    CommentQuote
  • Originally Posted by ntrivedi
    Are you taking the tax into account when you say 2L return on 20L FD? even at 10% return, (assuming maximum tax slab of 30%) the actual returns will be quite less.

    FD doesn't look all that attractive in terms of returns after tax when the actual inflation is much higher. (not the official govt. figure, the *actual* inflation).

    Cheers.


    dude...put money on your parents name......no tax at all on interest earn...
    have 4-5 accounts and spread...fill in form H...
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  • silly_boy20;198244]25L cash, what to do !!!

    hey where have u kept it ?? give me the key ;)


    :D you really are!! (if you know what i mean)
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  • Originally Posted by silly_boy20
    25L cash, what to do !!!

    hey where have u kept it ?? give me the key ;)


    man, you said it before me :(

    rajtjrll, if you are still confused after reading all those options suggested by the experts, the last option I suggest you is - GIVE THAT MONEY TO ME :D:D:D, relax and enjoy the happy and peaceful life :)

    Excess money is a problem always and we loose peace of mind thinking about what to do with it.

    BTW, on a serious note, here are few options -
    1. Do FD's on your name, spouce's name and parent's name from both the parties (your mom dad and your in-laws).
    2. Open PPF for you and your wife and divert 140K each year
    3. Invest around 10L in equity
    4. Buy Gold and SILVER
    5. Do not put your hard earned money (i guess so) in any kind of real estate at this time.
    6. Do not forget 5.

    cheers
    --monds
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  • Wait..

    Invest in Mutual Fund and have peace of mind.

    Family will keep on pressurizing for many more things in life.. Ultimately it’s your life you take decision. 25L in todays world is not a great amount looking at the inflation.

    If you are happy living 1BHK rented so be it and enjoy your life. Duniya gayi tel lene.

    If it gives more pleasure looking at your saving yielding good returns, so be it. Don’t take that money out and sad for rest of your life.. simple.

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  • If you don't own an apartment buy one, buy atleast a 2 bed apartment in a good locality. Everyone knows you wont get it in 25L however it is best to buy within your budget unless you have a god-father who would bail you out if you ran into money issues with the loans in the future
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  • Originally Posted by rajtjrll
    Guys have been member of this forum from 5-6 months now.....
    have been searching 2 bhk in pune since then...

    By and Large the news and forum and all says the prices will reduce, I have seen prices at the level where they were in mar-apr....no rise no drop...

    personally i didn't found any project worth the money they are asking...in Kharadi (45L)/hadapsar(40L)/wagoli(30-35L) areas...

    currently staying at a very gud 1 bhk flat for 7K i more then happy with this deal....reason to purchase flat is strong pressure from relatives to invest 'something' in RE....

    This is preface.....now Question....

    I have 25L in cash, of my own.....would like to keep 5L with me as liquid assets and can invest 20L at one go.......still need somewhere around 15L of loan to invest in RE.....

    What you guys have to suggest, should I invest in RE at this stage or keep that 20L in FDs and earn 2L a year....

    what will you (ofcourse many seniors here) do if in the situation like of mine.....


    RE is a big ticket purchase. Your savings should be much more than 25L, maybe 50L before you buy. For own use, buy when family is complete, when job and city are settled - buy close to work and relatives and buy one bed room more than what your needs seem to justify. So a 3BHK is basic minimum to buy. No point buying a 2BHK which will seem small after a few years. 2BHK is not for guys with 25L in savings - you should aim bigger.

    It is difficult to do more than 3-4 RE deals in your life. It is time consuming, has lot of costs and registration and is difficult to sell. So better to go for few but big deals in RE.

    In the meantime, distribute your 25L into 7L in stocks/MF, 7L in FD, 7L in RE and rest 4L in e-gold and others.

    For 7L in RE, best you can get is - I agree - a small shop. Give it on rent. You should get a yield of 7000 pm which should cover your current rent.

    If you dont consider it worth the effort to buy such a small ticket RE, distribute 10L in FD, 12L in stocks and rest 3L in gold etc. and wait for more savings to accumulate.

    You can get a strong RE proxy in stocks also - hotel stocks, cement stocks, Paints, Ceramics, housing finance tend to move with RE to some extent. Otherwise, if inflation busting is your intent, go with Pharma, FMCG and utilities like Power Grid/Petronet LNG which will stay linked well to inflation.

    But at the end of the day, if you buy a 2BHK worth 45L with 20L cash down and rest on leverage, you wont go much wrong - you can rebuild your corpus in a few years. Just make sure that it is a self usable flat - should be big enough

    There are numerous ways to get fixed return similar to FD without paying tax.

    If you had 50L, I would have said - buy a plot worth 30L - it delinks the land cost from the construction cost - so that you just sell the plot and buy the flat, when needed. But with 25L, plot is too risky and not advisable

    PS. If you are still a bachelor - buy the 3BHK. Otherwise girl wont marry you!!! (just like weaver bird!!!!)
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  • Venky, rightly said about 50 lakh scenario..
    I sugest him to wait till he accumulate the wealth to 50L target and then take the position as you suggested...
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  • Raj,
    If u can afford it now go for it. If u want to wait to build 50L portfolio(2-3yrs) from current 25L, market scenario will be different. Just compare what has happened from 2008 to now. If same happens the God bless us. I dont expect same results but similar results.
    Please note bubble will never burst, it will only slightly deflate(like it happens every 3 yrs cycle) which will not benefit people like us. I dont know what will happen if black money comes back to India, i believe 30% would have been generated thru RE if not more, but i feel it will only stabilise prices or instigate further price rise.
    P.S.-I had asked on Pune forum few months back, a question-
    What will u do if price of RE falls by 25-30% and rents go up by 10-15% in 2011? Response was not surprising, every response suggested people still preferred to be on rent.:D

    But dont get into emotional pressure from your family.
    Btw-Have u shortlisted the options- if yes then share with your forum, if not then do that first everything comes back later.
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  • Ok, so let me paraphrase your situation here:
    1. You have 25L in cash, out of which you can spend 20L for real estate.
    2. You are currently staying in a rented 1 BHK flat at 7k per month and are happy with it.
    3. Looking to "invest" in real estate mostly due to advice from relatives and family.

    What would be the max home loan you can afford today with your current income, assuming a downpayment of 20%?
    That should be your budget for real estate.

    I would suggest that you calculate the EMI for the home loan mentioned above, and then subtract your current rent from it. Immediately start saving the difference. This saving should not make a major impact on your current / required lifestyle.

    Keep adding this saving to the 20L you already have, while you search for the flat you want to purchase. This way your downpayment keeps increasing while you search for your dream home.

    Take your time, do not worry if the search goes slow. You have time and money in hand, which the builders do not. It would be ideal if you can keep a search time frame of 1-2 years, while keeping up the monthly savings.
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