You have adressed a very relevant issue faced by most of us; In my opinion one should start thinking about buying a house when the person is in early 30s when they are likely to have accumulated sufficient margin; One should never buy a house in small towns if they do not have plans to settle their and it is just for investment purpose. Some time we tend to buy a house at a location we can afford at that moment without thinking about future salability of the property; this should be avoided; It is better to buy a small house in a metro rather than a bungalow in a moffusil place; Alway try to buy two small places which are adjacent to each other rather than buy a single big place; through this you will rental income to pay the EMIs; If you have a transferable job then it is better to rent during initial years;
RE:when to rent, when to buy
by SRG on Aug 09, 2006 12:29 PM Permalink
MS. ANAMIKA, I think you should take a re-look at your expenses. Though you are not paying much towards rent in my opinion your other expenses are way too high for your level of income. Is there really a need to incur phone bill of Rs 3000. You can go pre-paid, Do you really need a car as well as a bike? These kind of introspection would pay off in the long run. I disconnected my mobile after I started incurring montly bill of Rs 600/- and this is just for indulging in chatting. By waking up half an hour earlier than my regular time I am saving Rs 500/- each month which other wise would be spent on rickshaw. In the long run it is better to save than be sorry
Me and my husband both are earning around Rs.40,000 (combined after paying tax)a month. We hae a nuclear family with one 2.5 yr old kid i would like to list out my monthly expenses. 1. Car loan - 4000/- 2. Monthly rent - 6000/- 3. full time Maid - 2500/- 4. Milk - 1000/- 5. Car wash/Newspaper/ Cable - 1000/- 6. Electricity + water bill - 1200/- 7. School fees (kid) - 2000/- 8. car maintenace (petrol/ repairs etc.) - 4000/- 9. Bike loan - 2000/- 10. Bike maintenance 2000/- 11. Fruits and vegt +miscllaneous - 2000/- 12. Phone bills (2 mobiles+1 landline)- 3000/- 13. Personal expenses (2 office going people)- 3000/- total expenses - 37000/- 3000/- rs left per month for other expenses (family outings, shopping, festivals) savings - practically nil amount on credit card also piles up if expenses go over this amount.. where will the money come for the downpaymentof the house without saving and even if u have that money and thenbuy a house which is not less than 30,000 lakhs for a decent place (the kind we r living in presently) at least we have to shell out Rs. 20, 000/- per motnh for loan payment 6000(rent)+ 4000(tax saving on loan)= 10,000/- where will the next 10,000/ come from?
RE:Tell me should i buy a home or not
by Srinivas on Aug 09, 2006 02:53 PM Permalink
You have not mentioned when your car & bike loans will be completed. I can see there are potential savings in Car & bike maintenance expenses (up to Rs.3K), phone bills (up to 1K). If you squeeze little more, you can save another 1K. Totally,you will add up to 15K savings/pm. This is a good amount and make your plans for buying a home.
RE:Tell me should i buy a home or not
by Kush Goel on Sep 06, 2006 11:00 PM Permalink
Car loan : 4000 car maintainence : 4000 Bike loan : 2000 Bike maintainennce: 2000( how much travelling do you do?)
assuming newspaper bill=200 cable=300 you spend another 500 on car wash
total cost of car and bike = 12500 which is 31% of your income
i think you really really need to cut down upon this
at this point i do not see where how you can buy a home. Where will you get money for downpayment??
look for cutting expenses in each of the factors . even a cut of 10% will help enormously
RE:Tell me should i buy a home or not
by Deepak on Aug 09, 2006 09:39 AM Permalink
Hi Anamika,
Cut your cost of car, you will immediately save 8K. Seems, you do not want to save any money else your phone cost will not be 3K. I also had bike but its maintainence never cost 2k. 2k is maint. of my Santro... There is old story of a sage & drunken. Drunken says, Wine is not leaving him then Sage got stick to a trunk & said this trunk is not leaving him. How many people in India would be earning 40K after taxes.... except in IT. Enjoy.... seems you are still in US.. where they do not know any thing about saving :-)
most of your logic is incorrect honestly. it is entirely a financial and convenience decision.if you get a good deal and can afford you must buy a flat.flat offers a host of facilities which a house does not ,if one is hassled about time,changing jobs etc. if you plan to relocate often,do not buy too much household gadgets like elaborate sofa sets,kitchen appliances.also do not spend too much money on customization like special flooring,special toilet fittings etc.
better still buy a flat in a different city and rent it out.live yourself in a rented flat.get tax benefits of both the house loan and hra.
