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Builders & Real Estate Bulls Theory Proved Wrong

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Builders & Real Estate Bulls Theory Proved Wrong

Last updated: November 1 2016
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  • Re : Builders & Real Estate Bulls Theory Proved Wrong

    Originally posted by realacres View Post
    The bulls here tend to forget one big thing -

    House ownership is true only when you don't have any loan on it. As long as loan is there, the ownership lies with the bank & not the buyers. In reality, defaults in EMIs can lead to the buyer being kicked out from the house by the bank. People seldom realise this.

    If one is taking loan for over 10 yrs, home loan EMI is over 30% of take home income, it is a case of over-leverage, no matter what logic you put like rates go up, few flats left etc.

    As said before, either you rent house or rent money.

    If the quality of life or lifestyle in general is going to deteriorate post house purchase, it is over-leverage. I have seen cases where people have bought flat for 45L and can't afford to buy Alto now. What would you say ??
    Home will not be served on a golden platter...

    One has to work hard for it...
    Toil day and night...
    Sacrifice peace of mind...
    Work day and night towards getting debt free...
    Calculate and re-calculate remaining principal, EMI, Interest rate 100 times a day...
    Discuss minutest of things with wifey, family....
    Sacrifice holidays for a few years...
    Feel guilty for not buying expensive gifts for wife on anniversary...
    Save every penny so that your children can grow up in your house...

    List is endless...

    This is sacrifice and love for your family... Unfortunately you call it 'over leverage'....

    PS: Your home is not something larger than life... but it is indeed a very large part of your life....
    Last edited by tarcap; August 30 2012, 11:23 PM.

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    • Re : Builders & Real Estate Bulls Theory Proved Wrong

      Originally posted by tarcap View Post
      as you can no longer watch your children play and grow in YOUR home...

      I guess we are talking about flats/apartments here.

      Children will grow the same either in a good rented flat or your own flat. makes no difference.

      Your fact holds true in case of having own big bungalow or haveli kind of houses having own back/front-yard garden etc where children can attach themselves to the home, surroundings etc

      Comment


      • Re : Builders & Real Estate Bulls Theory Proved Wrong

        Originally posted by tarcap View Post
        NG2012... in as few words as possible...

        The heart wants what it wants... there is no logic to it....

        There is no point in owning a palace at 50.... as you can no longer watch your children play and grow in YOUR home....

        I know... there are a lot of things that money cannot buy... but HOME is not one of them....

        So go for it while you can....

        PS: dont mis read my post as a builder's agents, asking to over leverage etc ... my thoughts and posts are strictly meant for informed and wise readers.
        so basically as I mentioned earlier.. treat this as an emotional investment only.

        Vijay (Big B) bought a 16 floor building for way more than market price because his mother spent sweat and blood constructing it... but not everyone is Vijay.. we can hardly afford a 'Deewar' .. forgot the building...

        One has to decide how much one can afford (realistically) to satisfy emotional needs.

        You don't want your kids crib all the time that they cannot afford to go on vacation or expensive school/college/classes or competitive sports/creative trainings because you thought it is priceless to see them grow in a 700 sq ft walled space. Believe me, that wont be a memory you want to have when you grow old.

        Buy something which makes and keeps your family happy.

        Comment


        • Re : Builders & Real Estate Bulls Theory Proved Wrong

          To learn how to swim.. You have to jump in the pool...

          Originally posted by punerebuyer View Post
          so basically as I mentioned earlier.. treat this as an emotional investment only.

          Vijay (Big B) bought a 16 floor building for way more than market price because his mother spent sweat and blood constructing it... but not everyone is Vijay.. we can hardly afford a 'Deewar' .. forgot the building...

          One has to decide how much one can afford (realistically) to satisfy emotional needs.

          You don't want your kids crib all the time that they cannot afford to go on vacation or expensive school/college/classes or competitive sports/creative trainings because you thought it is priceless to see them grow in a 700 sq ft walled space. Believe me, that wont be a memory you want to have when you grow old.

          Buy something which makes and keeps your family happy.
          Not merely emotional decision...

          its an emotional decision taken by an informed, committed, hard working and smart individual...

          Unlike you, I would like my child to crib when,
          1) he/she cannot go abroad on vacation
          2) he/she does not get an expensive gift
          3) I am unable to buy his/her creativity via trainings, courses

          My big brother (real brother) has taught me,
          If you have to do well in life... You will do well in life...

          Believe me, when you grow old... more than anything else you would need a house of your own... so the sooner you get it the better it is....

          Comment


          • Re : Builders & Real Estate Bulls Theory Proved Wrong

            Originally posted by tarcap View Post
            Not merely emotional decision...

            its an emotional decision taken by an informed, committed, hard working and smart individual...
            I didnt say emotional decision... i said emotional investment. Decision may still be well informed about the liabilities.

            Unlike you, I would like my child to crib when,
            1) he/she cannot go abroad on vacation
            2) he/she does not get an expensive gift
            3) I am unable to buy his/her creativity via trainings, courses
            I just gave some examples.. what you think as unnecessary may be a need for someone else. Would you do like your kids cribbing if you could not afford a good school or collage? I think I definitely won't like that.

            Vacations are not always abroad. They can be domestic too.. and it's not always a luxury item but can be a significant aspect of a growing kid. Same is true for creativity and sports in life. If you take vacation/sport/toys/creativity all these away, what are you giving to your kids?

            Basically the kids in Pune are growing in an environment where they cannot play on decent playgrounds, cannot even cross the road without adult supervision hence almost no outdoor life and even within the walls, they don't have quality time with the parents because parents are slogging hard to pay the EMI.

            (Disclosure: I have a school going kid, so this is not just talk in air)

            My big brother (real brother) has taught me,
            If you have to do well in life... You will do well in life...
            yes.. agreed..
            And by the same logic, it also means "If you have to give yourself and your family a hard time... you will give them a hard time"

            Remember.. definition of 'well' is subjective.

            I can simply say (which many people have already said)... understand your liabilities before making an emotional 'investment'. I think you making these statements simply means you haven't understood the real impact of these liabilities my friend...

            remember, with one added kid in the family, even the 'kaam vali bai' also demands a raise (worth an extra adult in the family). There are so many needs which you will not let your kids crib for...

            Believe me, when you grow old... more than anything else you would need a house of your own... so the sooner you get it the better it is....
            You are saying it yourself... you would need a house of your own when you grow old... then why not wait till you are 100% sure about all the liabilities while you are young?

            Your statement assumes that you dont want to be a burden on your kids by having this security. In that case also, most likely when you grow old, your house need will be much less if you are not staying with the kids OR your house will not be enough to have your kids and their families to stay in.

            If you need to choose one from the two, which one would you choose?

            1. Giving a happy and healthy all round life to your kids / family and help them become empowered in life?

            OR

            2. Secure a house for yourself when you grow old because that will be the most important thing giving you a financial/emotional security.

            Do not answer this question... just keep it to yourself. Don't give anyone (including me) an opportunity to judge you (in either way).

            Comment


            • Re : Builders & Real Estate Bulls Theory Proved Wrong

              Originally posted by tarcap View Post
              To learn how to swim.. You have to jump in the pool...
              I liked the subject line...

              yes.. you need to jump in a pool but before jumping it is better to know how deep is the pool, if there is a lifeguard nearby if you start to drown, if the water is not infected and there are no sharks swimming nearby...

              You dont want to jump in a well or jump in a sea to learn swimming... thats called suicide...

              On a side note, a true story... I learnt swimming last year and practiced a little this year. was able to swim for 25+ mtrs and float easily in the local pool. So was feeling very confident.

              Then got an opportunity to try this in real sea this year. On a cool and calm day with very average waves, in 5 minutes I realized that my swimming skills are suitable only for playing in kids waterparks... .

              Comment


              • Re : Builders & Real Estate Bulls Theory Proved Wrong

                Here is a small story of santa and Banta

                Santa and Banta are best friends with same financial condition and same income but with different mindset towards home(Flat).

                Santa sees oppurtunity to buy a decent flat and jumps to grab it with some over-leverageing but committed to cut down some expenses and work hard to fullfill the other committements

                Banta decides, he will buy his flat when its within his reach.

                Meanwhile, Both get married.

                Santa explained all his financial condition to his wife, his wife gleefully accepts the conditions, she is happy with the feeling that they have their own flat in pune.Goes to decent honeymoon to Simla,manali.Wife is ready to scarifice expensive gifts, frequent eating out , movies and excessive shoppping.They just do their necessary shoppings.Roam on their bike.Plan well to buy their car(may be second hand).

                Banta has money to spurlge on Honeymoon to Malasiya, then expensive gifts, eating outs and movies.Still they dont have car, planning to buy high end car.

                But when both families met, Banta's wife always crib that they don't have their flat.Banta says, rent is too high.
                Banta's wife is now asking banta to buy a flat(u can say,peer pressure), but prices are sky high and savings are very less, banta can't afford a home now.

                Comment


                • Re : Builders & Real Estate Bulls Theory Proved Wrong

                  Originally posted by punerebuyer View Post
                  I liked the subject line...

                  yes.. you need to jump in a pool but before jumping it is better to know how deep is the pool, if there is a lifeguard nearby if you start to drown, if the water is not infected and there are no sharks swimming nearby...

                  You dont want to jump in a well or jump in a sea to learn swimming... thats called suicide...

                  On a side note, a true story... I learnt swimming last year and practiced a little this year. was able to swim for 25+ mtrs and float easily in the local pool. So was feeling very confident.

                  Then got an opportunity to try this in real sea this year. On a cool and calm day with very average waves, in 5 minutes I realized that my swimming skills are suitable only for playing in kids waterparks... .
                  Moral of your story: Same thing\skill can't work in every scenario. We have to think according to scenario.

                  Comment


                  • Re : Builders & Real Estate Bulls Theory Proved Wrong

                    Let me further expand the story in Friday mood .


                    In between Santa read the post in IREF by frugy that Santander bank is having some financial problem, but instead of giving up he still went ahead with RE buy as he knew that such global events may not have much impact on Indian RE . and boy how right he had been.

                    But Banta even after reading compuwalah's reply to frugy's post that Bantander bank is doing well still preferred to stay on rent for 3 years (scared by news of Santander problem posted in such a way as it looked like end of world coming tomorrow), but after reading recent posts of 2012 by various wise members, is now planning to go ahead with his buy even at inflated price .


                    For reference follow this thread

                    Originally posted by compuwalah View Post
                    Realitycheck. This thread started ....
                    So both Santa and Banta are winners but the cost of win is different for both.
                    Last edited by compuwalah; August 31 2012, 12:00 PM.

                    Comment


                    • Re : Builders & Real Estate Bulls Theory Proved Wrong

                      Originally posted by braveheart200 View Post
                      Here is a small story of santa and Banta

                      Santa and Banta are best friends with same financial condition and same income but with different mindset towards home(Flat).

                      Santa sees oppurtunity to buy a decent flat and jumps to grab it with some over-leverageing but committed to cut down some expenses and work hard to fullfill the other committements

                      Banta decides, he will buy his flat when its within his reach.

                      Meanwhile, Both get married.

                      Santa explained all his financial condition to his wife, his wife gleefully accepts the conditions, she is happy with the feeling that they have their own flat in pune.Goes to decent honeymoon to Simla,manali.Wife is ready to scarifice expensive gifts, frequent eating out , movies and excessive shoppping.They just do their necessary shoppings.Roam on their bike.Plan well to buy their car(may be second hand).

                      Banta has money to spurlge on Honeymoon to Malasiya, then expensive gifts, eating outs and movies.Still they dont have car, planning to buy high end car.

                      But when both families met, Banta's wife always crib that they don't have their flat.Banta says, rent is too high.
                      Banta's wife is now asking banta to buy a flat(u can say,peer pressure), but prices are sky high and savings are very less, banta can't afford a home now.
                      Completely one-sided story....
                      The knowledge of what to do in a Recession or Boom is more important than predicting a Recession or Boom.

                      Comment

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