RE:AGLOCO-Bill Gates site---Interesting...u'll leave every other thing.
by paramjit gill on May 01, 2007 06:40 AM Permalink
hi buddy!!! i read ur msg but couldn't find the link which u were talking about.. p.s:--frankly spking how has this helped you..
RE:New idea
by Kamalaksh on May 01, 2007 08:50 AM Permalink
This may not happen everytime. U were lucky. Imagine had u brought a house when real estate prices are high and if u wanted to sell it and the prices come down.
RE:New idea
by Gurudutt verma on May 02, 2007 05:16 PM Permalink
It is possible that real state prices may go down, but ofcource it's more stablethan stock at least.
If people can trust stock then why not real asset.
I have never seen if prices of real state goes down except some exceptions for e.g. earth quake
the writer is i guess still a student.. he has not considered the residual value of the investment.. in loan method your value of house at the end of 20 yr would atleast be double (pessimistic view) accoringly, net you would have spend 2.4 million (7.4 - 5).. whereas in rented you would spend 4.6 million to stay in a house for 20 years.. this itself shows that the analysis is incomplete.. and remember i am still not talking abt validity of the calculations !!!
RE:Stupid Analysis
by Anand K on May 01, 2007 08:30 AM Permalink
The writer seems to be young ...no doubt about that. He has not taken into consideration many factos as you have said. Looks like he is yet to earn or buy a house for himself.
RE:Stupid Analysis
by Anamika on May 01, 2007 09:45 AM Permalink
It seems like he need to sell a house and he is frustrated from the going down pricess of house.
RE:Stupid Analysis
by psycho on May 01, 2007 12:14 PM Permalink
but at the end of it , i am having a house to live An asset (life long asset)
yeh i agree we have to pay double to loan amount but who will give such bulk amount at one go. middle class person ------nobody. if some body would be there then no person would have gone for a loan.
Many people have provided some corrections or raised questions about the validity of analysis.
I would like to add one more valid point:
The author has done calculation for 20 years only, what about next 20 years or whole life (continuing with children also)?
Once you complete 20 years: 1. If you opted for buying a house, loan is already paid, house is yours. you can live in it without further expenses.
2. If you opted for renting, you will still continue to pay rent all your life...... irrespective of the fact whether you are still earning handsomely (retired)? I assume, the other benefits of paying less money as compared to EMI wont be able to fetch you a good decent house after 20 years..... Just consider the pressure on land and housing with increasing population in India and everyone wants a decent urban living.
So, someone who decides to pay rent today for next 20 years will continue to pay rent all his/her life. After 20 years, the homes which are 25 Lacs today... may cost multi crores.
What i believe is simple: If you are frequently changing your location/city... you have no option. But if it is possible for you by any means, own a house! Your old age will be more respectfull and secure.
RE:misleading article
by Ashish Jain on May 01, 2007 01:23 AM Permalink
the author of article seems to be from Bangalore ;)
It happens in Bangalore: rents are very high even for not-so-costly property and property owner takes a security deposit equal to 10 months rent 1 month advance.
So you need to throw 11 months money at property owner (most of time... too greedy) before you move in.
So many times, these property owners are not willing to give your money back when you leave the house.
A lot of people come to Banglore to work for short term, they have no other option than getting exploited.
With so much of advance already given and high rent, they expect an increase of 10% after 11 months...
This is all bull shit, as at the end of 20th year, one will be owning that property and by simple interest method the property will increase upto 3 fold which means at the end of 20th year one will be owning the property of Rs 75 lacs Vs the Rental Exp of 46 Lacs.....
RE:response
by Anamika Bhatnagar on May 01, 2007 12:09 AM Permalink
I think sometimes the cycle of paying loan over a period of 20 years may be broken if one goes abroad and earns...exchange rate can help substantially reduce the loan payment...conversely, in a place like london, where property prices are so high that one can't even think of buying property simply because it is out of the reach of a low income earning person...so people prefer more to live on rent rather than building assets...it is easier to survive in this country if you don't think of buying property...
Firstly every individual dreams of owning a house !! Period. Try telling your wife that you save 1 lac per year because you rented and did not buy a house !! I will send your flowers on your funeral :-)
Secondly, on rented premises, you cannot bang even as much as a nail into the wall without informing the Landlord !! That's just for beginners !! Forget painting, furniture etc Your heart will never be in it !! It's rented for heaven's sake !!
Thirdly, 45,000 pm is a great salary for many and to get that much the guy's surely skilled in his work !!
By the time's he's married, he's got an avg of 7 years of work experience !! And some savings !! With dad and mom and the great Indian joint family help, what the heck will he need a loan for !! Maybe tax breaks !!
So all this is unrealistic !!
There is no content !! Never rent !! Buy !! Buying may hurt you once, renting will kill you slowly everyday
Rajiv
And if you earn less than 20K pm, you will probably not be reading all this
The purpose / motive of the entire article is lost some where and has left countless questions unanswered and has created many new questions in the mind of a common person who is trying to buy a place/dream house of his own. I guess the writer has his own house ( or should I say ancestral house) for himself.
I think the writer did a good analysis. However he missed one thing - the difference between the emi and rent (rs 10,000) in this case can be invested in a good MF through SIP. After 20 years it will give you at least 1.75 Crore (based on the returns of the past 10 years, an investment of 10 pm in a good fund like reliance growth for only 10 years will give you 1.6 crores now - so I'm being ultra conservative for a 20 yrs period). Now you can buy a really good house in 1/75 - 2 crores corpus that you have !! at least far better house than paying an emi of 20K can afford. Any thoughts ?
