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- This is true.
I saw several flats sealed by banks in magarpatta recently.
In troubled projects which are lagging in progress, there would be many more..
The buyer understands how he has been hammered when his full loan EMIs start.CommentQuote0Flag
- Originally Posted by punerebuyeri guess thats why we are discussing this topic over and over... because many people do not understand it and the goal is to make them aware of the facts..
common man take home loan offers more seriously than the advice of an investment consultant... at times they can be wrong too but at least you get to hear another side of investment and not just the loan selling agent.. and the agent gets a commission as well, so you are getting a paid advice there also so why not take an investment advice too?
The best thing about IREF is that you get them for free here... thanks to Wiseman, Venky, Real and other seniors... they are open to debate on their ideas, accept the improvements/suggestions and promote objective discussion.
We should make more and more people visit this site and especially this thread for discussing RE as an investment.. in fact, there are some points on this thread which can be edited to make a book... :-)
I am regular visitor of this forum. I learn it from here just buy on affordable things either home or LCD J.
I would also suggest to buy home when EMI is 30-35% of you take home. I started two small SIP two years before and they are giving me good return. Even invest when the invested money (down payment or EMI) don’t degrade your life style.CommentQuote0Flag
- As you sow, so shall you reap ...
No one is targeting you for what you say.
It is the desire of most people to own a home ultimately (there are few exceptions who want to rent till the end, but even they can buy a home, rent it out and stay on rent in places of their choice!!!).
And what you say is that most people are financially not well educated. But it is imperative that people get the basic minimum education so that they do not cross the boundaries of PRUDENT financial behavior.
As Real has said, there ar homes coming up for foreclosure. Each andevery one of these homes was once bought by a person who perhaps hoped that one day he would be the full owner of the home.
For some reason, along the way, something happened which made him/her not only lose the home but perhaps all his/her savings that he had invested in the home.
Imagine after 10 years you had to lose everything you invested in the home and had to start all over again!!! Very distressing. And the builder, the broker and the banker (not to mention politician) has the least interest in your safety when you buy. Only their profits!!!
This is the main reason why we keep repeating again and again that people have to be ultra cautious in getting into massive debt because, when people in their 20s and early 30s get into big debt, they have absolutely NO IDEA what the financial strain is the keep paying EMI over 20 years through all the problems one gets to encounter in life. Bigger family, education, medical and other rising expenses. Job losses. There are so many unknowns.
This is why people need to save enough and take lesser loans so that they can have their cake and eat it too!!!
The US is a prime example of Govt and politicians brainwashing Americans that it was the birthright of every American to own his/her own home. This was combined with criminal behavior by Home Loan companies that lent massive loans to people without even an income and also with other large debts (student loans, credit card debt, Car loans, etc, etc). See where they have reached. Millions made homeless in the last 3 years alone. 42 million people on food stamps.
In the coming few years this kind of behavior will also hit our country and you will find many more repossessions of homes and cars due to this highly risky behavior of wanting to have the latest, greatest, most expensive homes, cars, whatever (simply because, for example, I am a "engineer" and in my trips to the US I found my counterparts behaving in exactly that way, so I too have to ape their behavior).
Better to be on the other side, amass cash and wait for those foreclosures so I can buy homes fully paid up and much cheaper too.
C'mon man, even staying on rent means having a roof on the head. Who said that the roof has to be owned??
What many people forget is:-
Many either RENT HOUSE or RENT MONEY (LOAN). At the end of the day, one remains renter & real house ownership is one when there are no more home loan EMIs.
Absolutely right, Real.
I see people, who bought in last 2 years at inflated rates, cribbing most about their salary, EMIs, no savings and no on-site opportunity :D
My friend bought a flat in Pune-east, switched job and now travels to Pune-west, Hinjewadi and cribs about daily 2.5 hrs commute to work.
People buy house at inflated rates, not only for roof but some of these reasons:
1. Fear of price will go up and later they won't be able to buy.
2. RE never falls and 25L invested today, will grow 2x/3x in 5 yrs.
3. They will get good marriage proposal & status in society.
4. They'll get settled in life although always think about CTC offered in other companies :D
As Wisey pointed out, its impatience wanting instant gratification coupled with short-term (herd) thinking and low financial-planning skills.
Disclaimer: I want RE to fall >30% so that I get a decent deal with > 50% down-payment.CommentQuote0Flag
The buyer understands how he has been hammered when his full loan EMIs start.
If EMI is 4x-5x the rent, what sense does it make?? It is better to have SIP using the amount equivalent to EMIs & then buy flat on downpayment after 8-9 yrs. And this is not hypothesis, it is a fact, you can check out any rent & sale price charts in the city.
If one thinks that rent goes down the drain, then he is an idiot. It is like saying one should buy a rickshaw rather than pay fare as paying to rickshawala is putting the money down the drain.
Man, didn't that person use the house?? What do you think that the rent should be free?? By that logic some of the biggest establishments in the country are idiots as they opt for lease agreement than outright purchase which include banks as well :D.
* PS:- We do financial calculation coz we VALUE MONEY :).
completely agree! also even if one decide to pay EMI, one should know that he should get daily healthy meal, get good clothing, electricity bills/ bills etc and THEN pay EMI in surplus amount after required savings(and investmnents)
Whats point in having huge EMI and having half meal in worry of loan?CommentQuote0Flag
- Originally Posted by gharondabhaiThere is no right time or wrong time.
You need a roof over your head that you can call your own home ... go ahead and buy one. You need now means buy now.... your need is not urgent then scout for the best deal that suits you. There is absolutely no guarantee that tomorrow you will get a better one.... in fact there is no guarantee in anything. You like it means you have to act fast
owning a home is emotionally driven requirement in our financially innocent but otherwise very smart indian society, a person living on a rent is looked down upon than one who is living in his own house. a former may have high net asset than former but its assumed a person living on rent is in penury. many ppl buy home(youngsters) are victims of this societal thinking amongst us, they fall victim to family, society, friend pressure and make a decision out of force which they have to defend later lest they regret it :bab (45):
unless i had 80% of amount of downpayment, i would not have cared abouyt time but when one is going for 50 or more percentage of loan one must do plenary analysis before jumping into life's biggest expenditure.CommentQuote0Flag
- Originally Posted by puserowning a home is emotionally driven requirement in our financially innocent but otherwise very smart indian society, a person living on a rent is looked down upon than one who is living in his own house. a former may have high net asset than former but its assumed a person living on rent is in penury. many ppl buy home(youngsters) are victims of this societal thinking amongst us, they fall victim to family, society, friend pressure and make a decision out of force which they have to defend later lest they regret it :bab (45):
unless i had 80% of amount of downpayment, i would not have cared abouyt time but when one is going for 50 or more percentage of loan one must do plenary analysis before jumping into life's biggest expenditure.
+1. coudnt agree more.CommentQuote0Flag
- RE stocks including that of dlf making/nearing a new 52 week low every day. When marker rallied to 21k, these didn't participate in the rally. Now when the market is falling, these are falling at a faster rate.. And no mutual fund house likes them. Most of the RE stocks are still down by about 80% from their 2007 peek. Wonder when this will be reflected in the actual Real estate. Many say, there is no connect between the stock price of RE companies and the RE. Why is this so? Huge land bank is also one of the assets of RE companies right? When the company valuation reduces, shouldn't it affect the land value too?. I fail to understand this.CommentQuote0Flag
- Originally Posted by kaateshaRE stocks including that of dlf making/nearing a new 52 week low every day. When marker rallied to 21k, these didn't participate in the rally. Now when the market is falling, these are falling at a faster rate.. And no mutual fund house likes them. Most of the RE stocks are still down by about 80% from their 2007 peek. Wonder when this will be reflected in the actual Real estate. Many say, there is no connect between the stock price of RE companies and the RE. Why is this so? Huge land bank is also one of the assets of RE companies right? When the company valuation reduces, shouldn't it affect the land value too?. I fail to understand this.
This speaks of state of RE-business in India:
Shoddy practices & low-sales. And I am talking of A-group companies.
RE-bulls still talk about growth prospects in RE, limited land, everybody needs a roof etc which is laughable :DCommentQuote0Flag
- Rising ForeclosuresOriginally Posted by aditi sharmaThis is true.
I saw several flats sealed by banks in magarpatta recently.
In troubled projects which are lagging in progress, there would be many more..
I had got email from HDFC for auctions to be held at Hiranandani's project at Thane for some flats. It was held on 25/26th Jan 11. A 3 BR in Hiranandani's project at Thane went for some INR 92L.
Some 4-5 flats have been sealed at Sun Orbit, Sinhagad Road as well.
I came to know this from a banker friend. He even said several notices have been sent to flat owners in past 2 months & said that things will be even worse post Mar 31, 2011. Infact, he says that forget just house buyers, even the builders are on their list :D. And some builders have been asked to provide additional collateral against their loan as banks valuation dept feels that current collateral isn't sufficient enough in current times. The collateral is few flats + some land in these cases.
* PS:- Those who defaulted had one thing in common:-
EMIs were over 65-70% of their take home income .
Btw, a plot having market price of 82L+ at Kothrud went under hammer this week for reserve price of 56L!! See the ad below. Auction was held this week.
Man, if foreclosures increase.....we know what happened in US.CommentQuote0Flag
Pls check out my latest posts about the deteriorating global macro conditions on the 'stock advice' thread on this forum. Very important info.CommentQuote0Flag
- Originally Posted by hereticPls check out my latest posts about the deteriorating global macro conditions on the 'stock advice' thread on this forum. Very important info.
Reading the post. I would though request you to put the link directly to your post here so that even after some posts are posted on the thread, it will be easy for viewers to find the said one.CommentQuote0Flag
- Toppling their sand castles
In a crackdown on sand mafia, it was discovered that builders are using political clout to avoid payment of octroi. Fines worth Rs 60 lakh were collected from lawbreakers
The Pune Municipal Corporation (PMC) octroi department chief Hemant Nikam has sent out a warning to those who may be using political clout for evasion of sand mafia crimes. He has issued a statement saying this will not be tolerated and that those involved will have to face criminal action as well as cancellation of their permit and driving licence.
On the backdrop of the brutal assassination and burning alive of additional collector Yashwant Sonawane on the issue of oil adulteration, the police department has started raids on the sand mafia, as well as the oil mafia.
On Friday, Nikam confirmed that sand-supplier truck drivers use politicians’ names to avoid octroi and also gave information about fines collected.
He said, “We have collected fines worth Rs 60 lakh from people who were avoiding octroi on sand within PMC limits. While collecting these fines, we found 18 builders who did not pay any octroi. We collected almost Rs 46 lakh from these builders. The octroi department took action on 300 trucks.”
From the Shevalwadi octroi post, which is situated in Hadapsar area, a large amount of illegal sand supply takes place by avoiding octroi. The octroi department has decided to file cases against such truck drivers and owners.
Besides that, PMC officials seized trucks and provided information to the Regional Transport Office (RTO) and requested them to cancel the permits.
Here is the link for the story:-
Toppling their sand castles, News - City - Pune Mirror,Pune MirrorCommentQuote0Flag
- Found this link somewhere about our future-PM-hopeful Rahul Gandhi...
- Everybody kindly read this post..even if a little long one--part1
recently i recieved a mail from a navi mumbai broker which he is using to lure
customers ,kindly read into it and pls tell me a fitting reply to it so as i can stop him from luring customers on false promises.
Here is an insight into Real Estate Investing.
At the outset, let me make some disclosures:
Since I deal in Real Estate, there would be a slight bias towards this investment.
Quite a few persons who would be reading this have either bought or have shown interest in buying real estate and this could be construed as a ‘business promotion’. However, persons who have invested through us have made annual returns of between 45 – 85 % after our brokerage. Not one client has lost money or has seen the value of their property fall below their purchase price.
My primary area of operation is in Navi Mumbai and in some parts of Mumbai. I am not referring to property in places other than these, simply because I do not know the prices and trends there.
It is my opinion that in Mumbai, no real estate is available at a cost that is lesser than that available 3 or 5 years back, inspite of the deep recession that took place in 07 – 09.
This mail is quite long as there are some calculations, etc, but I’m sure that understanding the funda behind it would be immensely beneficial.
The first investment is made in 2005 to take advantage of CIF (Cost Inflation Factor) already known.
Though the investment cycle could be 3 years (to avail of long term capital gains), we assume a cycle of 5 years to give 2 years for the construction of the property.
We assume the property prices go up by 10% a year on an average.
Loan is availed at 9% per annum. The amount of interest paid is calculated on the complete loan amount for all 5 years, though the amount would reduce every year.
80% of the property value is paid by loan.
Except for the down payment, no other money is invested. The entire profit is used for down payment in subsequent investments.
o Stamp duty / registration / brokerage is not taken into account to keep the calculations simple. This would bring down the profit amount, however, it will also increase the loan amount.
o Rental income and society outgoings have not been considered in the calculations to keep things simple.