I am planning to buy a 2BHK flat for investment purposes in Bengaluru. Here is my high level maths:Planned For 10 years
Cost of Property
₹1,10,00,000
Downpayment
₹25,00,000
Registration
₹8,80,000 (approx 8%)
Interiors
₹8,00,000
Property Tax
₹88,000 (₹8000 per year +10% every 5 years)
EMIs Paid
₹8,787,346
Yearly Repairs & Paints
₹4,28,000 (average ₹42,000 per year) Total Investment (A) ₹1,34,90,000 (approx)
Rental Income
₹67,00,000 (approx ₹35,000/month with YoY 7.5%)
Income Tax Rebate
₹5,00,000 (approx ₹50,000 per year) Total Earning (B) ₹72,00,000
Appreciation in 10 years
50%
Sale Price (C)
₹1,65,00,000
Loan Foreclosure Penalty
2% of outstanding principal
Payback to Bank (D)
₹60,00,000 (approx) Net Profit
B+C-D-A
₹72L + ₹165L - ₹60L - ₹134.9L
₹42,00,000
Does this sound feasible? Anything more I should consider in this plan?
What I am seeking an opinion on:
1. Have I missed any other critical cost to be considered?
2. Is my method of calculating the Net Profit correct?
3. Depending upon the financial growth I make (or don't), there is a possibility that I won't sell but move in to this as my home, since currently, there is no property or land to my name. So, although real estate is most of the time considered to be a bad investment, but given that I do not have any land/property to my name, would it not make sense to own one, even if I end up making lesser returns that MF or Equity or any other such investment instrument?
EDIT:
Cost of Property
₹1,10,00,000
Downpayment
₹25,00,000
Registration
₹8,80,000 (approx 8%)
Interiors
₹8,00,000
Property Tax
₹88,000 (₹8000 per year +10% every 5 years)
EMIs Paid
₹8,787,346
Yearly Repairs & Paints
₹4,28,000 (average ₹42,000 per year) Total Investment (A) ₹1,34,90,000 (approx)
Rental Income
₹67,00,000 (approx ₹35,000/month with YoY 7.5%)
Income Tax Rebate
₹5,00,000 (approx ₹50,000 per year) Total Earning (B) ₹72,00,000
Appreciation in 10 years
50%
Sale Price (C)
₹1,65,00,000
Loan Foreclosure Penalty
2% of outstanding principal
Payback to Bank (D)
₹60,00,000 (approx) Net Profit
B+C-D-A
₹72L + ₹165L - ₹60L - ₹134.9L
₹42,00,000
Does this sound feasible? Anything more I should consider in this plan?
What I am seeking an opinion on:
1. Have I missed any other critical cost to be considered?
2. Is my method of calculating the Net Profit correct?
3. Depending upon the financial growth I make (or don't), there is a possibility that I won't sell but move in to this as my home, since currently, there is no property or land to my name. So, although real estate is most of the time considered to be a bad investment, but given that I do not have any land/property to my name, would it not make sense to own one, even if I end up making lesser returns that MF or Equity or any other such investment instrument?
EDIT:
- Included the amount paid in EMIs
- Monthly maintenance of society is included in the cost for 5 years & for the next 5 years, the tenant pays, so that is not considered here.
- Updated the 10year appreciation to 50%
- Added more information about the opinion needed