Although it's always a good idea to invest in a property, specially a Home, the calculations are very biased right from the outset.
1. The security deposit for a house rent of Rs.13,500/- is mostly upto Rs.50,000/-.
2. With Rs.2,500,000/- you cannot buy the kind of Home that attracts a rent of Rs.13,500/- or Rs.20,000/-.
There are many factors that will definitely affect the calculations like inflation, interest rates, rent etc. over the course of 20 years. But in terms of flexibility, you have more options like size, location and cost (rent vs EMI) if you live on rent.
And finally but importantly, if you are salaried like in this example, there are more chances of your being transferred to other places than staying in the same city.
This article certainly needs more elaboration than what is provided to be a useful guide of any sort.
RE:Option 2 is better but calculations are biased.
by shyam subramanyam on Apr 30, 2007 07:58 PM Permalink
perfectly correct. I live in a rented house for the past 5 years in navi mumbai. I hav had 5 agreements of 11 months. I was told it is a Rs. 16L flat when i paid 5k rent. Now im told it is a 30L flat and Im paying 6.5K rent. Me or my landlord is weak in maths, i guess. Rents have not kept pace with the sensex. If i had bought a house in Ghatkopar (a prime area) in 1979 for Rs. 2 Lakhs in 1980, i will now be able to sell it for Rs. 30L. If i had put it in the sensex, it would be worth 270 lakhs....so be my guest!
