But author compared Monthly rent of Rs.13,500/- against a Rs.25 lakh own house. Acoording to todays trend in the market, if you are able to get a property for Rs. 25 lakh, in the same area the house rent will be around Rs.5000/- only. He considered Rs.13,500/- rented house, then he would have taken a Rs.70 lakh for a brand new house in the same area.
(See my message before this one). Taking the data from Praja's message - If the rental is 5000 per month and 60,000 per annum. The intrinsic value of the property should not be more than 16 times the annual rent, say about Rs. 9.6 lacs. Thus, if the current market value of the property is Rs 25 lacs, the return on it is Rs. 60,000 or about 2.4%. Thus, better go for rent - and as a sideline, buy two plots some distance away. Five years down, sell one plot and make the house on another.
RE:Good article
by amit gupta on May 01, 2007 10:31 AM Permalink
I hope U had not seen the Movie "Khosla Ka Ghosla" which is near to a true story. Government should do some thing to bring down the property prices as this boom is artifical created by Builders & property dealers nexus.
