Should I buy a flat in Bangalore with a salary of 3L p.m + investment advice

[pell]

@ngocthanh2015 Yes. 60 - 70k per month flat costs around 1.5 cr in Mahadevapura, Bellandur area.

 

[robo23]

@ngocthanh2015 I don't want a flat that costly.
Happy to look for one at a budget of around 1-1.5 cr.

Whatever money saved can go for savings.

 

[blondepudding]

@robo23 Have you tried looking for flats around your range? I suspect you will find anything you like in this range.

 

[robo23]

@blondepudding Well I have checked at a few of the places and I think I will be able to adjust.

I don't have many tantrums in terms of luxury.

Just that I am kinda scared to have liability in terms of emi's and not having liquid cash in your account ( have seen very very tough times during childhood and that trauma is still there)

 

[philihelene]

@ngocthanh2015 Don't agree. Rents are too high in bangalore. A 3cr flat means luxurious, spacious, good society with all amenities. Rent would be around 1L per month

 

[helpistruth]

@robo23 Hey man, I have 2 flats in Bangalore. I really don’t recommend getting one at the moment cause the real estate market is at an all time high. Considering you’re renting, I’m sure you went through an insane increase on your rent as we’ll.

If you really want to - get it in yehlanka/ Hebbal. The up and coming areas of Bangalore- things might be tricky for you at the moment but it’ll really help you 5-10 years down the line. See what happened to Sarjapur.

If you don’t want to stay away from the city, then a rented house makes more sense.

There are flats in the 1.2 -1.4 CR range in Marathalli but the amenities you get slightly further away are so much better and it’ll all fall into place 4-5 years from now. Or even look at the outskirts of Sarjapura, you can get a cute villa for around 1.7

 

[robo23]

@helpistruth I wanted a flat which might give decent rental at some stage of life if I ever plan to move out of blore.

 

[the_professional]

@robo23 Buying a flat is an emotional decision. When you buy, it’s your place and you can do whatever you want with it. No landlord to answer to, no broker to deal with, no looking for new place.

Buying a home is an investment in your quality of living and cannot be measured in money. In purely monetary terms, rental yields are around 3-4% while interest cost is around 8.5-9% so it will never make financial sense to buy a flat.

At the end of the day, buy a flat if that’s what you really want. Reddit cannot help you with that.

 

[robo23]

@the_professional Interest cost till the loan is there right. But at some point I will be able to get rid of the emis and then it's pure profit.

Also isn't it good to pay EMI's rather than high rent

 

[the_professional]

@robo23 There is the opportunity cost of money as well. If you run a discounted cash flow where you pay rent increasing by x% every year (and investing the differential in an index fund) and another where you put down down payment and pay EMI, the first option will yield a lower cost most of the times.

Just ballpark numbers, a 20 year loan of 1 cr will have an EMI of around 85k per month. The rent for such a flat will be between 30-40k. It’s almost impossible to catch up. You’re saving 45-55k in EMI every month. If you were to invest the savings from renting in an index fund gaining a modest 10% post tax, you’d have a corpus of 4 cr after 25 years.

 

[jamesnw]

@robo23 I brought a flat 6 months back. I think this decision depends on the place.i stay in Bangalore. Made sense to me...
Rent here for 2 bhk ranges from 35-50k
So I thought better to buy. Also I was told that if you plan to stay more than 6 years- better to buy a flat

 

[robo23]

@jamesnw Even I am from Bangalore hence the idea of buying a flat rather than paying high rent every month.

 

[hami6217]

@robo23 In the comments above you said you are not from banglore . What are you smoking OP

‘I am not from blore but might stay here for another 4-5-6-7 yrs’

 

[robo23]

@hami6217 What I meant was, I am not originally from blore.

 

[pastorgreg113]

@robo23 1) yes, buy now if you see bengaluru in longer term. even if you have to move to different part of city or another city, you can always rent it. check emi affordability and sustainability. consider brokerage, stanp duty, registration and move in renovation cost. consider income loss possibility (because of kid, job loss etc)
2) sip in index funds might be safest bet.

 

[ivymeow]

@robo23 Never in Bangalore. Hell hole

 

[velvetyrabbit]

@robo23 How are you earning this much. Damn!!

 

[robo23]

@velvetyrabbit I thought I am at the lower side in terms of salaries compared to most.

 

[velvetyrabbit]

@robo23 This is the lower end. Da hell am I doing wrong.

 

[robo23]

@velvetyrabbit Ummmm it varies actually.
It's not about the money but how happy and content one is with whatever one has