Announcement

Collapse
No announcement yet.

Builders & Real Estate Bulls Theory Proved Wrong

Collapse
X
Collapse

Builders & Real Estate Bulls Theory Proved Wrong

Last updated: November 1 2016
12768 | Posts
  • Time
  • Show
Clear All
new posts

  • Re : Builders & Real Estate Bulls Theory Proved Wrong

    Pune threads are the most active !!
    Non Stop entertainment !
    Lots of brain in Pune !

    Comment


    • Re : Builders & Real Estate Bulls Theory Proved Wrong

      Banta 2.0

      Originally posted by compuwalah View Post
      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


      So both Santa and Banta are winners but the cost of win is different for both.

      But you see Banta was also a clever and resourceful fellow ... after all he drank the same milk as Santa, no?! And swam in the same pool?

      Well, when Santa was paying off his EMIs, Banta was not only enjoying in Malaysia, etc but also learnt to invest wisely into productive assets (which others thought was ) ... stocks.

      Banta bought all those wonderful, undervalued stocks when they were available very cheap compared to now ... CIPLA, Infosys, etc, etc. Strange names, but he was an early friend of some fellow called Nemish Shah in Mumbai when he was a young broker and continued to stay in touch and take advice.

      In the early part of 21st Century Banta also went into Gold and Silver (much to the delight of his wife ... all wives get delighted with RE and Gold, apart from Silk Sarees and anything that glitters but may not be gold! ).

      So, when Banta's wife finally asked him to buy a home, Banta showed his true other self ... Banta 2.0 and went to town buying an expensive and modern 2500 SFt duplex Villa in a gated community in a Tony part of town with ALL modern amenities like ... you all know that part right?

      Suddenly Santa and wife seemed to be wondering ... maybe we should have waited to buy a home which looks so new and has all the amenities that never existed when we bought our budget flat in those days?

      Banta seemed to not only have had his cake, but eaten it too.

      More balanced now?

      cheers

      Comment


      • Re : Builders & Real Estate Bulls Theory Proved Wrong

        Originally posted by lovepune View Post
        Also, can you comment on one's stability of living on a rented accommodation. Based on my experience (father of one), i feel that staying in own house is far more (100 times) better then staying in rented one.....
        You being a father of a child, your experiences are valuable.
        IMO, an upwardly family with a small child going to primary school needs around 35K per month just to survive. Excluding EMI and big ticket purchases such as sofa, TV, kitchen trolleys and other white goods.

        If one has fairly good amount of money left over after after 35K and after buying all big ticket items, he/she should definitely go for a house purchase.

        Everybody must try to own their primary residence. Sooner than later. However, when I see people who have 70K take home income at 30+ years of age, I wonder if they are taking unreasonable risk.

        With this kind of income and with barely 15 lakhs of cash in hand, how it is justified to take up 35 lakhs of loan???

        If one thinks that they can survive on less than 35K, they need to do a reality check.
        Here is the rough outline of expenses:
        8K One child (school fees, school transportation, uniform, books, piano classes, birthdays, gifts, toys, video games, arcades, candy, chockolates etc)
        4K Bike maintenance, bike petrol, cheap within India vacations, auto, bus
        2K Travel (visit hometown in AC 3 tier, get parents to see your home, attend weddings, funerals, birthdays and other celebrations)
        3K Property taxes and society maintenance
        2K clothes, shoes, sleepers, beauty parlors, accessories, bedsheets, ironing, gym
        1K phones recharge (for 2), handset repair/replace, landline, internet, stationary
        1K electricity/cable
        1K kamwali bai
        3K Insurances (Life/ULIP)
        6K groceries/milk/newspapers/food supplements/vitamins
        1K Movies, eating out at cheap restaurants, daru, cigarettes, cheap prostitutes, tobacco, small snacks outside the office
        -------------
        32K. Leaving measly 3K for miscellenous expenses.

        Now tell me how this guy can withstand any financial setback??? Even a minor? All of his networth is in his home. Where is the scope for any other investments? Nanga nahayega kya aur nichodega kya???

        All of the above expenses will grow by 10% even if inflation stays put at 6%. Except groceries which is expected to keep pace with inflation.
        -------------

        IMO, one must not hesitate buying home if they have surplus left after paying off the EMI and after regular expenses. Whether RE goes up or down by 20%, it should be alright.

        So if family income is 15 to 20 lakhs, and has saved off 20 lakhs so far, one should be easily able to buy a 2BHK for 50 to 60 lakhs....with 15 lakhs downpayment and 35 lakhs loan.

        Comment


        • Re : Builders & Real Estate Bulls Theory Proved Wrong

          Well said. I just did the same analysis for Mumbai to buy a 2 bhk home, which costs 1.5 cr bare minimum in far western suburbs. One needs to have a minimum salary of 45-50lakh. And I always wonder how many people can buy that. While Mumbai salary levels are higher but not at a median range of 50 lakh.

          My hypothesis is that its mostly the self employed people buying it. Atleast in mumbai.

          Originally posted by NG2012 View Post
          You being a father of a child, your experiences are valuable.
          IMO, an upwardly family with a small child going to primary school needs around 35K per month just to survive. Excluding EMI and big ticket purchases such as sofa, TV, kitchen trolleys and other white goods.

          If one has fairly good amount of money left over after after 35K and after buying all big ticket items, he/she should definitely go for a house purchase.

          Everybody must try to own their primary residence. Sooner than later. However, when I see people who have 70K take home income at 30+ years of age, I wonder if they are taking unreasonable risk.

          With this kind of income and with barely 15 lakhs of cash in hand, how it is justified to take up 35 lakhs of loan???

          If one thinks that they can survive on less than 35K, they need to do a reality check.
          Here is the rough outline of expenses:
          8K One child (school fees, school transportation, uniform, books, piano classes, birthdays, gifts, toys, video games, arcades, candy, chockolates etc)
          4K Bike maintenance, bike petrol, cheap within India vacations, auto, bus
          2K Travel (visit hometown in AC 3 tier, get parents to see your home, attend weddings, funerals, birthdays and other celebrations)
          3K Property taxes and society maintenance
          2K clothes, shoes, sleepers, beauty parlors, accessories, bedsheets, ironing, gym
          1K phones recharge (for 2), handset repair/replace, landline, internet, stationary
          1K electricity/cable
          1K kamwali bai
          3K Insurances (Life/ULIP)
          6K groceries/milk/newspapers/food supplements/vitamins
          1K Movies, eating out at cheap restaurants, daru, cigarettes, cheap prostitutes, tobacco, small snacks outside the office
          -------------
          32K. Leaving measly 3K for miscellenous expenses.

          Now tell me how this guy can withstand any financial setback??? Even a minor? All of his networth is in his home. Where is the scope for any other investments? Nanga nahayega kya aur nichodega kya???

          All of the above expenses will grow by 10% even if inflation stays put at 6%. Except groceries which is expected to keep pace with inflation.
          -------------

          IMO, one must not hesitate buying home if they have surplus left after paying off the EMI and after regular expenses. Whether RE goes up or down by 20%, it should be alright.

          So if family income is 15 to 20 lakhs, and has saved off 20 lakhs so far, one should be easily able to buy a 2BHK for 50 to 60 lakhs....with 15 lakhs downpayment and 35 lakhs loan.

          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.

            Then one fine day the shiny IT company in which Santa was working had to downsize and decided to offload Santa, now Santa out of job couldnt keep up with EMI payments as he couldnt save much due to over leveraging, unable to find another job in tough time, Santa's house had to be repossessed by the bank due to default.

            Now bank auctioned the flat and Banta who had been saving money ended up buying the flat his wife was pestering him about

            Comment


            • Re : Builders & Real Estate Bulls Theory Proved Wrong

              Originally posted by vibes28 View Post
              Well said. I just did the same analysis for Mumbai to buy a 2 bhk home, which costs 1.5 cr bare minimum in far western suburbs. One needs to have a minimum salary of 45-50lakh. And I always wonder how many people can buy that. While Mumbai salary levels are higher but not at a median range of 50 lakh.

              My hypothesis is that its mostly the self employed people buying it. Atleast in mumbai.
              Mumbai RE is beyond my comprehension. Yes, salaries may be higher than rest of the metros but I doubt if one gets thrice the money for the same job.

              Number of rich people in Mumbai is probably very very high...and I am not sure if these people are scrambling for home loans.

              There are a lot of people in Mumbai who absolutely need house in that particular area as they don't want to travel in local train with a bagful of cash at midnight. Businesses who do cash businesses are better of living very close to their shops no matter how much it costs them.

              For average salaried person with no stash of cash, 2 BHK flat is a distant dream in Mumbai. But then he can always live in Ambarnath.

              Comment


              • Re : Builders & Real Estate Bulls Theory Proved Wrong

                Originally posted by wiseman View Post
                But you see Banta was also a clever and resourceful fellow ... after all he drank the same milk as Santa, no?! And swam in the same pool?

                Well, when Santa was paying off his EMIs, Banta was not only enjoying in Malaysia, etc but also learnt to invest wisely into productive assets (which others thought was ) ... stocks.

                Banta bought all those wonderful, undervalued stocks when they were available very cheap compared to now ... CIPLA, Infosys, etc, etc. Strange names, but he was an early friend of some fellow called Nemish Shah in Mumbai when he was a young broker and continued to stay in touch and take advice.

                In the early part of 21st Century Banta also went into Gold and Silver (much to the delight of his wife ... all wives get delighted with RE and Gold, apart from Silk Sarees and anything that glitters but may not be gold! ).

                So, when Banta's wife finally asked him to buy a home, Banta showed his true other self ... Banta 2.0 and went to town buying an expensive and modern 2500 SFt duplex Villa in a gated community in a Tony part of town with ALL modern amenities like ... you all know that part right?

                Suddenly Santa and wife seemed to be wondering ... maybe we should have waited to buy a home which looks so new and has all the amenities that never existed when we bought our budget flat in those days?

                Banta seemed to not only have had his cake, but eaten it too.

                More balanced now?

                cheers

                problem is every banta is not a wise man(pun intended). He is not financial expert who have all the knowledge of stock and gold prices.He always think, he shld do some investments and all, but fails do that due to some or the other reason. So he couldn't save into that proportion that he cld buy a 2500 Sqft duplex Villa.


                Originally posted by pande1 View Post
                Then one fine day the shiny IT company in which Santa was working had to downsize and decided to offload Santa, now Santa out of job couldnt keep up with EMI payments as he couldnt save much due to over leveraging, unable to find another job in tough time, Santa's house had to be repossessed by the bank due to default.

                Now bank auctioned the flat and Banta who had been saving money ended up buying the flat his wife was pestering him about
                for the matter of fact, Banta is also IT guy, worried about his job security, cldn't struck a deal as his saving were inadequate.

                Comment


                • Re : Builders & Real Estate Bulls Theory Proved Wrong

                  Risk Reward equation

                  Originally posted by braveheart200 View Post
                  problem is every banta is not a wise man(pun intended). He is not financial expert who have all the knowledge of stock and gold prices.He always think, he shld do some investments and all, but fails do that due to some or the other reason. So he couldn't save into that proportion that he cld buy a 2500 Sqft duplex Villa.




                  for the matter of fact, Banta is also IT guy, worried about his job security, cldn't struck a deal as his saving were inadequate.

                  Needles patchwork by you, braveheart200. Doesnt gel with the theme of the story.

                  All said and done, Banta acted with discretion.
                  With property prices almost 5-6 times the rate it was 7-8 years back, Banta was wise enough to gauge the risk reward equation which was too biased towards risk.

                  Comment


                  • Re : Builders & Real Estate Bulls Theory Proved Wrong

                    Originally posted by NG2012 View Post
                    You being a father of a child, your experiences are valuable.
                    IMO, an upwardly family with a small child going to primary school needs around 35K per month just to survive. Excluding EMI and big ticket purchases such as sofa, TV, kitchen trolleys and other white goods.

                    If one has fairly good amount of money left over after after 35K and after buying all big ticket items, he/she should definitely go for a house purchase.

                    Everybody must try to own their primary residence. Sooner than later. However, when I see people who have 70K take home income at 30+ years of age, I wonder if they are taking unreasonable risk.

                    With this kind of income and with barely 15 lakhs of cash in hand, how it is justified to take up 35 lakhs of loan???

                    If one thinks that they can survive on less than 35K, they need to do a reality check.
                    Here is the rough outline of expenses:
                    8K One child (school fees, school transportation, uniform, books, piano classes, birthdays, gifts, toys, video games, arcades, candy, chockolates etc)
                    4K Bike maintenance, bike petrol, cheap within India vacations, auto, bus
                    2K Travel (visit hometown in AC 3 tier, get parents to see your home, attend weddings, funerals, birthdays and other celebrations)
                    3K Property taxes and society maintenance
                    2K clothes, shoes, sleepers, beauty parlors, accessories, bedsheets, ironing, gym
                    1K phones recharge (for 2), handset repair/replace, landline, internet, stationary
                    1K electricity/cable
                    1K kamwali bai
                    3K Insurances (Life/ULIP)
                    6K groceries/milk/newspapers/food supplements/vitamins
                    1K Movies, eating out at cheap restaurants, daru, cigarettes, cheap prostitutes, tobacco, small snacks outside the office
                    -------------
                    32K. Leaving measly 3K for miscellenous expenses.

                    Now tell me how this guy can withstand any financial setback??? Even a minor? All of his networth is in his home. Where is the scope for any other investments? Nanga nahayega kya aur nichodega kya???

                    All of the above expenses will grow by 10% even if inflation stays put at 6%. Except groceries which is expected to keep pace with inflation.
                    -------------

                    IMO, one must not hesitate buying home if they have surplus left after paying off the EMI and after regular expenses. Whether RE goes up or down by 20%, it should be alright.

                    So if family income is 15 to 20 lakhs, and has saved off 20 lakhs so far, one should be easily able to buy a 2BHK for 50 to 60 lakhs....with 15 lakhs downpayment and 35 lakhs loan.
                    Financial setback may already have happened with 5% VAT !!!

                    Check this out :
                    Children in parent’s ego EMI traps

                    This is literally happening...

                    Comment


                    • Re : Builders & Real Estate Bulls Theory Proved Wrong

                      Originally posted by msp1976 View Post
                      Pune threads are the most active !!
                      Non Stop entertainment !
                      Lots of brain in Pune !

                      lots of brain..non stop entertainment... sarcastic comment in disguise


                      Pune forum is having the second highest number of threads trailing only to Noida forum. Pricewise, Pune is at distant 4rth or 5th position after Mumbai, Delhi, Gurgaon, Noida and Bangalore (to some decent extent)

                      These stats explain that the time when people should buy the property; they are utilizing that time by posting here on Pune forum--since aug 2009.

                      (one more from sarcasm kitty )

                      Comment

                      Tags: None
                      Have any questions or thoughts about this?
                      Working...
                      X