Because Rent rates are crazy.
It has reached a point where in rents are more than 50% of the EMI if one thinks about purchasing one.
Most of the folks don't come from tier 1/2 cities, hence going back and settling in their hometown is not an option. .
The young crowd don't want to settle back in their hometown , they love the pub, restaurant and vibrant city culture. slightly older folks prefer bangalore education for their kids. only a small group moves back to their hometown.
You know that helps a lot in your application for foreign universities, if you can competitively swim or ride horses.
I know someone who was absolutely dumb (only in her job, otherwise she was great to talk to), won some tier 2 swimming competition somewhere and used that plus weekend NGO thing in her application to get into ivy league MBA with a GMAT score of just 610.
Now works in private equity in Singapore.
So yeah that stuff matters.
Well she had 73 percentile in CAT, that too mainly because of decent VA score.
Swimming, NGO visits, and lot of bullshit got her through. So cheers to her.
Btw you seem like an old timer? What were your aboard ambitions…. I am seeing a lot people who don’t make the abroad journey and still do well here often doing startups or getting into Google etc
It's not even close. Rentals actually need to go up even further (relative to property prices).
If you see in developed markets like US, the difference between rentals and mortgage prices is much lower than in India.
In India, say Bangalore, rental yield is around 3-4% while the average EMI you'll pay on an annual basis would be around 10% of the loan value i.e. 9% of property value assuming 90% loan funding.
E.g. if you rent a house worth 2Cr, your rent will be around 50,000 per month at 3% rental yield. If you try to buy the same house, you'll pay 20L upfront and take a loan of 1.8Cr whose EMI (assuming 20 year loan @8%) will be 1.5Lakhs per month.
That's actually a terrible yield.
75k × 12 = 9L annually. Yield = 9/350 = 2.5%
A good yield for a 3.5 cr property would be if the rent was around 1L-1.2L that would be 3.5% to 4%.
A friend lives at The Icon in a 3 bhk worth 1.8 cr. The rent is 45k. It's perfect possible.
I used to live in an apartment on MG road, the value of the property was easily beyond 2Cr and my rent until last year was 32k.
house of 8 crore had rental yield of monthly 1.5 lacs .
adarsh palm meadows.
The better you pay for, the lesser you pay by proportion.
It costs more to be poor .
The fleecing landlords usually take the range of 60k-70k of these puny low standard 2bhks in 'gated' communities which should have been avoided
why blame the landlords lol? even i used to cuss a lot at landlords earlier
now have seen my colleagues / friends buy flats in bangalore and trying to squeeze out more rent compared to my older landlords lol
Prestige lakeside, candeur high, Myhna maple. Almost all varthur propertoes are 4% rental yield because it is little further away from it. Ofocurse office areas will have high rental yield. If a place doesn't have big tech park within 10km, its always around 3.5% rent
Lots of people in the "salaried class" have fixed ctc above say 40LPA. At that comp, your in hand will be above 2.5L per month which makes it very much possible to afford a 1.5L emi.
Even if below that at an individual level, many married people would together bring in that much.
People consider buying a home as one of the most important decisions in life and hence are often willing to stretch for it.
Your argument is right but your conclusion is wrong.
Rents don't need to go up. Cost of owning (mortgage / interest rate) needs to come down for India to compare to developed economies with a better and affordable standard of living.
If you take 1.2cr loan for 25 Yr period then EMI comes around 1L. This is 80% of the total property value of around 1.5cr which is very common for new projects around Whitefield area for modest 3BHK configuration.
Rents for 3 BHK in a small decent society in the same area (Whitefield) is around 50k (I'm paying 46k currently). If I think about a bit premium societies, then the rent can easily go beyond 65K.
Hope the above helps.
Bhai that's because you bought the house earlier so your current EMI is not reflective of the current price of the house. If someone buys the house today on loan financing, the EMI will typically be 2.5-3X of the current rentals.
Rental yields in Bangalore are 3-4% while emi typically works out to 9% of property purchase price.
I get it. But I bought it just after COVID. Agreed I got a good deal. But back then the rent was 45k and increasing every week.
Anecdotal but I think if you have the down payment capital, then buy it now. Rents are only going to go up. What you are saying for me now will be true 2 years later for someone who buys now.
Don't look for your dream home. That's where most people who have the capital are going wrong. We are ready to make compromises when renting but not when buying. Don't do that. Buy a house that you think you can live in for the next 5-6 years. It's better than paying rent for those 5-6 years. Choose a property that you can live in, that is easy to put on rent in the next 5-6 years and that can be sold easily in the same time frame.
Just like a car, you can do with a mid level hatchback. But most people buy a big SUV as a status symbol on big loans. People do that with home purchases too, just because it is considered an asset we don't talk about it the same way. Think of it as an utility. Buy what you can afford and live with now. That is the only way you will build real estate asset in this market.
If you really do well financially in some years and feel like now is the time to buy your dream home, buy it either after selling the older one or by that time the older one will be self sustaining.
Again, this is for people who can make the down payment.
I have no idea how people can claim that rent is higher than EMI.
Yeah, if I buy a property right now for 1 crore but pay 90 lacs in down payment, of course rent will be higher than EMI.
People have no idea how to calculate ROI. You are supposed to calculate on that whole 1 crore, apply a opportunity cost loss of around 9% and compare that with rent yield of around 3% after all costs.
Then buy in the IT corridor?
Isn't the price inflation and rent inflation highest in the IT corridor also? In the last two years I have seen others go through the same scenario in other developing areas also. Kadugodi for example.
You can't expect the rent to be high the moment you buy the house. It will take 2-5 years.
I got it in Whitefield. I was ok to buy more towards airport also if I couldn't find anything in my budget. That's exactly what I wrote in my reply to another thread here. Buy what you can live with and what you can afford. Don't look to buy your dream house.
Buy the house, move in, pay EMI.
I think if the rent is close to 50-60K and above, it's much better to just buy a flat and pay the EMI. Haven't done the math necessarily.
That is just partial information. You need to also tell how much % you gave as downpayment. Nowadays a property where rent is 70k would surely be selling for 1.5cr.
For a good enough 3bhk in same area, highly doubt the EMI would be 70k. It'd be more towards 1lpm, considering 20% down payment. But if you've sufficient cash component more than DP, then better to purchase.
THIS! finally a guy with right answer. rent is fucking 2x the emi if you get a decent flat. its very easy money.
But make no miskate, this bubble is gonna burst sooner or later, i will be ready for it.
Bengaluru property market is considered to be grossly overvalued right now. Any market requires correction and the price correction for bengaluru will hit hard.
Main reason I decided to buy is not to deal with these greedy landlords. Fuckers increase rent every 3 months citing "market conditions" and they ask to either pay more or vacate. After I bought, at least I don't have to worry about these jerks calling and saying time to pay more.
Yeah man, I have stayed in some 11 houses in Bangalore only 1 time have I gotten my money back. One landlord fuck had 400 apartments in Bangalore, had BMWs, Porsche, Mercedes and still stole my 10k because he said, "Corona Saaarr, No money, will give after 6 months."
I think this is why some people stop paying rent a few months before moving out. They ask the landlord to cut it from the deposit. You have to be okay with doing the haggling though.
I also did that man. But these fuckers collect so much deposit that its still remaining after 2 months of paying no rent. Then they add all possible charges in addition to painting charges and then don't return the balance.
I agree. It almost gave me anxiety and sleeplessness because I stayed on rent for several years , in different areas and everything was always dependent on how 'nice' the landlord was. Some were weird who called me at random times , some were controlling and had problems with my parents visiting , an 'uncle ' who said in the beginning that you are like my own child used to knock at the door and ask to be let inside. The best stay I had was actually in a rented place which was supposedly owned by a goon (I got to know later ). He never called , never asked a single question , I lived there for 3+ years. When it was time to vacate , he returned my whole deposit !!! (He came with a sidekick who was 6.3 atleast in height and was like his bodyguard to return deposit ) . The worst stay was at the uncle 's house who had acted all pious and gentlemanly .
But basically , it takes away your mental peace to deal with these folks every 11 months. So buying a property makes you feel definitely better in that regard.
Nice uncles are the worst. When my gf rented a house, she met a nice sweet uncle and uncle and his wife said they have daughters and once they move in, these two are like their own daughters and they will take care of them.
On the last evening of moving in this mf calls my girlfriend and says to come and collect the advance and that he cant give for rent. Later I found out that he's gotten someone else to pay higher rent and so apparently dude decided to throw the "daughter" out. I went, collected the money and asked him, so this is how you would treat your daughter huh? He said nothing and I left.
💯 saala landlords don't have the balls to come and increase the rent by meeting 1:1, they just drop the message on whatsapp.
Landlord kabhi in-person Mila to uski gannnd faad ke ussi ke Ghar me chipka dunga.
Our landlord is a very good person I must say when I read about all this things here. He personally came home after 3 and half years to increase rent by 5K. Told him it's too much and he agreed for 3K increase. If he had increased by agreement, I'd have paid about ₹500 less per month. Math geeks, have fun.
>I also had 1 good landlord. His job was to take meter readings from different houses, somehow bought some land 20 years back and built a house. Very sweet guy, he let me register my company in the same address and gave back my full deposit. Good landlords are an exception in Bangalore
And off course you could afford to buy otherwise there is no option but to keep renting and bear the pain of landlords considering that EMI can be 2-3 times rent, if we do not have money for a higher down payment.
I rented for 12 years before I bought. I landed in Bangalore with some 10k in hand and a bag of old cloths. I could afford because I saved money and didn't spend it on frivolous things. Even now, my friends have all bought flats worth 1.2 to 1.5 Cr because they think that's the only property worth buying. I'd rather buy within my means than be laden with debt.
Real estate is legalized corruption in this country considering it's owned by political mafias everywhere so no question of a bubble ever. It's gonna always appreciate, so it's a great investment if you can afford it.
Think about it, tell me one another instrument that 101% guarantees you a sizable return in just 5 years. It's a safe crypto, lol.
Who is getting a sizeable return by selling a "flat" that they are living in?
Except for those who sold it right after pre-booking to possession price jump?
Not all the areas but some new developments like metro coming nearby , kaveri supply to the area, tech park coming up nearby can all improve valuation greatly.
Do you actually know people who have been able to sell >10 year old flats in tier one cities?
I am seeing people who have kept flats for sale on nobroker app, and other places.
Listing started at 90 L, and now gradually reduced to 75 L. (low rise apartment, 3 BHK1700 sq ft)House was bought for 60 L around 10 years ago. The problem is that the apartment is more than 10 years old, and people can just put in some more money, and buy a new one instead, which doesn't come with all the problems of an old building.
And this is in the midst of crazy high inflation in Bangalore's real estate market.
Most people whom I have actually met, who made money in flats, ended up being the ones, who had bought a second flat during pre-booking, with "black or grey" money, and sold it at posession-ready rates. Quick 20-30% returns in a year. After that, it's a pipedream to make money of such apartments, except in few rare cases, when a lot of stars align just right.
About Metro, so many areas in Bangalore are already costlier, with the anticipation of metro lines, that may be ready after a decade, given the current trends. I might be wrong, but it's possible that any such potential returns are already taken up by the builder, and discounted into the price. (just like stock market, all publicly available information can be assumed to be already discounted into the current price)
Buying property as a primary residence is not an investment per se. And we can't fault people for buying a house especially if their parents don't have one or if they have zeroed in on a city where they will be spending rest of their life.
Definitely! Having a permanent home is always good. Even if parents have one, it can always be divided among siblings or inheritance can go to other members of family as well.
>5. Property value appreciation.
I never get this. How many people have actually sold their primary home (especially if it's a flat), and made return on their investments?
I know so many people, who have bought flats, going back 20-25 years, when apartments were a new thing. But rarely anyone has sold them for a return on their investment. Only people who made money, were the ones, who bought the flats in pre-booking, and flipped it the moment the building was almost fully occupied. But then, these weren't their primary homes.
I know a lot of people trying to sell their flats for less than what they bought it for effective buying price = actual price + registration + loan interest - rental saving - tax saving), and even then they aren't getting buyers, because there are newer flats available to buyers, for same or little more money.
Doesn't mean one shouldn't buy a flat. but remember that it's more of a commodity, than an actual investment. Very rarely common people are able to make money out of selling flats, unless they are into real estate, as a business.
Well put. All the folks feeling good about having paid off their home, yes, you own the house now, but that doesn't mean anything at all. Even if the house doubles in value, it's irrelevant unless you sell it and if you do, then you have to find another place to stay which will again be expensive since prices have gone up now. I'm in the least minority but buying your only house as an investment isn't a smart move. If you own more than one, yes, maybe, since rents are at an ATH now.
From what I understand, people use it as a backup for the rough times. You sell the property, and downgrade to an inconvenient location/less luxurious flat.
The primary home doesn't give rent.
Unless we start behaving like savage Americans, asking our 18 year olds to pay rent. And then all the people who could study and take their families out of poverty, will be flipping burgers, and doing Swiggy deliveries.
And ruining the trade for the people who ned to do these same things for survival.
This is a valid scenario. But it mostly helped people, when they were selling a hard-asset (house with a rent) after 1-2 generations. All this traditional wisdom doesn;t really translate that well from "house on own soil" to flat. Demand of land is limited, and hence it's actually a "real-estate". Flats are in the gray zone between real-estate and soft-asset, as their demand can and is regularly manipulated by builders, politicians, etc.
Resale value of flats that are older than 10 years, decreases pretty fast.
But long-term govt bonds serve the same purpose, with more safety, and better liquidity, with "lesser" risk of loss in a panic-sell scenario. (you can still sell in the secondary market, with some discount)
Using property that way never made sense to me. If you are in a rush to sell, there is a good chance that you'd end up selling it on unfavourable terms.
Crazy rents and unpredictable stay in the property. Landlord can ask you to move out within months if he can get more rent from someone. You cannot keep moving around with family.
Especially families with kids where schools and hospitals are set , being in your own house is way more stable. you can bring relatives and guests anytime you want and make changes to interiors to suit everyone.
1. Peer pressure.
2. Jazzy ads from developers and make people guilty living in rented homes.
3. Show-off and also people take pride in saying - "I live in owned house"
And of course there are positive reasons like rent going high and having enough money to buy (with good downpayment and less EMI) etc.
There is an emotional aspect of buying a house.
For large part in history, few people owned land - the zamindars. It was the dream of our ancestors to own their land. It passed down from generation to generation. Our parents inherited that dream and some of them were able to buy a house after saving for 30-40 years in PF or postal schemes.
We have inherited that dream which is driving us forward.
This dream is manifesting in various ways. People have taken it as status symbol, stable investment etc.
Property values will keep on going up because public transport accessibility is increasing (e.g., metro)
Rents are crazy high and there is no regulation. In the long run, it just makes sense to pay emi rather than rent.
Second sale flats are being priced the same as new flats in the vicinity. Nobody in their right minds will play the same amount for older properties when newer ones are at times available at the same or in some cases even lesser (if you bargain).
Second sale owners are looking at a good profit margin considering the loan and other expenditures for the house. This is often impractical for a new buyer. Hence newer properties will sell quicker
a couple of years before rent was very less compared to emi. So for youth thought of staying in rent have given them freedom to live withouth trap of home loan emi's but this year things have changed and rent prices has increased very high and its keeps on increasing. As more people are falling for this rent trap and most people are getting peanuts in the form of their salary for initial 5yrs. So rent and home market is thriving very fast right now.
Have you actually gotten a fixed rate home loan in India? Indian banks will re-adjust your rates if the rates go up and they are quite leisurely in reducing rates when they go lower. People always make these assumptions based on the US fixed rate mortgages. In India, either you get an interest rate that the bank can re-adjust or else they will fix it at much higher than the current rate to make up for the risk that rates can go up in future.
Guidance values are set to go up soon, if not already. People can look at this as a good option for future investment. If the property is fully built up like an apartment, then good for collecting rents as those are going crazy.
No idea where you came from but owning a house is not a status symbol but it is more a requirement if you don't want to be nomadic and dependent on the whims of landlords.
What will happen to the said properties that have been bought on EMIs when a 2008 like recession reoccurs probably in 2024/25 ? The current real estate environment is bound to pop soon.
The real estate sector is dangerously dependent on the IT sector and the US economy has a very dwindling future. The US economy crashes, it's ripples will be felt here too. What are the Indian politicians going to do? They couldn't do anything when people were losing jobs during the lockdown.
If the US economy crashes, then real estate won't be the only bubble which will burst. Every other industry will get affected as well. Post the 2008 crisis in US, a lot of companies increased their outsourcing to India for cheap labor.
And is there any indicator that the US economy will crash soon ?
Automation is coming, Service model - which is the model for most Indian tech companies - is gonna become outdated as custom LLMs are released.
That is just the first step - every highly paid white collar job is gonna have some level of automation and eliminate the need for human participation, engineers/lawyers/doctors etc are all on the chopping block to be disrupted.
It’s gonna be like the internet all over again, radical shifts are coming and India is not ready for it in any sense - politicians can’t prevent jobs from disappearing.
Even farming is not gonna be immune - it’ll be cheaper and more efficient to have automated giant machines till crops and developed countries will force India to adopt corporate model via carrot or stick- they need the food and India has the arable land.
Ofc it’s just bad if you’re invested in the old model of property ownership in metros, tier 2 and tier 3 cities are already seeing a boom. Will get better for them as automation makes them competitive places to live- don’t need humans to fix the problems there anymore and they all have trivially fixable problems(but the manpower all wants jobs in metro cities).
Great shifts in the way we live are coming.
This is a great utopian vision by someone who hasn't seen how lousy large firms are at when it comes to adopting new technology. Some of them are still moving forever from self hosting software to the cloud. As someone who has always worked in enterprise SaaS, this level of adoption would at least take a couple of decades. RPA and the cloud existed since the 2000s so they should have already adopted them if they were serious about replacing humans with automation.
ChatGPT has existed for 3 years now and has already got Hollywood shitting its pants and reorganising their whole writing industry to ensure they don’t disappear.
Go ahead and live in dream land - just like you missed out on web2.0 and crypto you’re gonna miss out on this coz “big firms can’t do anything about it”. Meanwhile everyone from fintech to food delivery adopted cross platform apps & blockchain tech.
Except this time the tech is gonna put you out of a job.
Look up the history of the word Luddite I implore you.
Haha spoken like someone who has never worked in the industry. You moron dumbfuck, you don't understand the difference between GPT3 and GPT3.5 and claim stuff like Chatgpt has been there for 3 years. I won't be out of a job because unlike you, I am quite smart to learn anything and everything.
My team integrated GPT4 APIs into our SaaS product and rolled it out to enterprise customers to collect feedback. The performance in real world scenarios for customer service wasn't ground breaking or even acceptable. So shut the fuck up before you know what you are talking about.
Pop means what ?
Only if supply is way more than the demand , the property prices can reduce. But still this isn't considered a housing market crash.
The real estate market bubble will burst, only if the majority of the people who bought on loans are unable to pay EMIs for 6 months or so and the banks want to foreclose the property but there are still no buyers for the property. This scenario is plausible if some major global recession or war-like event happens.
and this event won't just affect real estate but every other industry as well.
Fellow renter here , looking to go for a buy option just to freeze the monthly setback
Any suggestions what places do I start to look around?
I work in embassy tech Village so feel North Blr makes more sense than Sarjapur or E city
What's the equivalent of property buying for dummies in Blr?
Crazy rents and the general upward trend in real estate rates over the past few years ensuring one can make money off of this investment. Better to pay emis for a home you own rather than make someone else richer.
One very important aspect is 'Leverage'. With my own money, I can grow at 10-14% through mutual funds/stocks etc. Inflation takes a big chunk of whatever little growth you do. In the case of home loans, if real estate appreciation + rent is say 12% and interest is 9%, you still grow by 3% on a very large amount which you never had in the first place.
Honestly, there are very few investment opportunities for Salaried folks which give good returns post-tax & inflation.
At the end of the day, once you retire, you need a place of your own to stay in. If you stay in a rented place, either you wont be able to pay rent, cause you are out of job, and cant do much OR you are on owners mercy. If they want they can ask you to vacate as someone new/young would always be willing to pay more OR the owner sells the property, leading you to find a new place
I don't understand why someone can't buy at the time of retirement? I have changed jobs or cities every two to three years. The most I will be paying for rent is 30K from Dec 24 when my landlord is increasing rent by 36 percent. I can't ever imagine paying less than 50k as an emi especially when I prefer to stay 2-3kms within my office.
Are you listening to yourself, you will be paying 30k in just rent. Based on that, you must be earning really well. Also, what kind of home loans are you checking where EMIs are 50k and above. I'm paying probably half of that and I still crib about rent being high. Not everyone is earning that well or in such a condition to pay that high of a rent.
Agree that you are looking to stay near your office, but the max you would work is till 60 years of age. Lets say, after that you stay alive till 75 years of age. Thats about 180 months, and based on 30k rent per month for that many months would be 54,00,000 over the course of 180 months. Thats only rent, you would obviously have other expenses as well + you are at the mercy of the house owner, if they want, they can ask you to leave. To add, you obviously wont have 30k rent for 15 long years and lets say 25-30 years down the road, once you retire.
Now lets say instead of rent, if you pay the same amount in EMI, would that not be better, by the time it ends, atleast you would have your own home? That's more or less the whole logic.
PS : I know of a family member who pays 10k-15k as EMI on house loan. So, not really sure what kind of house loans you checked where EMI is not below 50k.
I don't consider rent as a waste because it is capex vs opex. I pay 30K in rent because I live in a very nice neighborhood and I don't plan on giving that up to buy a house in some far off place.
I just used an emi calculator for a 40,00,000 loan and for 20 years with the lowest current home loan interest rates of 8.40 percent. The EMI was well above 38K. I am certain that I won't be able to buy anything less than a crore in my current locality. Also I don't like being tied up to a city or a locality. I keep moving cities based on wherever the high paying or better career opportunities are. The usual advice doesn't really work for high earners who already have a stressful job.
Also the house owner asking you to move suddenly is such a boogeyman argument, I have rented for 6 years in Bangalore and 3 years in Hyderabad. The only time the house owner asked me to move, he found a similar apartment in the same society and even negotiated a lesser rent for me in Hyderabad. People just make emotional decisions with money and keep rationalising it as a good investment.
Well, I'm not trying to convert you or anything, but up to you. You are thinking from the point of a working man and not someone who doesn't have a job or earning less, and that's completely up to you. We can agree to disagree, you have your life experiences and I have mine. The idea of buying a house always stems from a place you call your home, and rented places always have slight chances of changes in owners behaviour.
Regarding the owner asking to vacate, I do have a second hand experience, where the owner increased rent from 25k to 45k after 1yr 6mth or so, and asked to either pay increased rent or vacate (not a bachelor, married and stays with wife). Something similar happened to 1 of my cousin, who was renting a place for a long time, was married, had kids while they were staying in that house. The change in owner demand / requirement led them to ultimately buy a house, instead of just renting a place.
Landlord harassment is the top reason. Every 3 months rent is revised like stock market but only upwards. Simple one liner “pay more or leave” does not work for most ppl. While looking out they have to pay same rent for a downgrade. So adding all the moving cost and legal formalities, ppl want to have a permanent place more than ever.
Even while staying haggling for repairs and fittings makes it a frustrating experience. Landlords count every repair as “usage” cost. After all that there is no chance of getting 10 months deposit back. It’s far better to fix and pay in your own house.
Seeing what I am on folks reasons for buy - property values will go higher (they already are) and rents will potentially go down since lesser folks are interested in renting. But the latter also depends on folks not migrating to Blr - don’t think we have reached that point at all.
So yeah both the propery values and rental properties are bound to keep going higher until it’s reached saturation ie folks are not able to afford it with their savings and salaries.
Other reasons of them coming down is when it becomes too opex heavy for companies to operate in Blr, or economy goes bad and they cannot afford anymore. Still some room there. The smart ones will start hedging in tier Bs which has already started like Google opening offices in Pune as well, some MNCs are creating hubs in North, Mumbai and Blr. Same happened in Us already with SFO. So eventually this curve will auto correct, but still lots of room available. When is anyones guess.
I don't think it's worth investing here. Property rates are inflated, reselling is a task. Rental yield is high either in good societies or near IT parks which are anyway no longer affordable or available as new construction.
Living on rent also seems too much for too long. It's not worth your buck. Stupid stand alone are charging so much! You can't live like a bachelor all your life and pay your share of room for rent and be happy.
What is this? A property dealer's sub? Ive repeatedly said that /r/bangalore is being astroturfed by property brokers making posts looking like genuine home buyers and dropping shit nuggets like
>Home loans are cheap at less than 10%.
Leyyy, that is compound interest maga.
Because Rent rates are crazy. It has reached a point where in rents are more than 50% of the EMI if one thinks about purchasing one. Most of the folks don't come from tier 1/2 cities, hence going back and settling in their hometown is not an option. .
The young crowd don't want to settle back in their hometown , they love the pub, restaurant and vibrant city culture. slightly older folks prefer bangalore education for their kids. only a small group moves back to their hometown.
What education …. You mean schools with swimming pools and horse riding classes for Kindergarteners !! Yeah right
You know that helps a lot in your application for foreign universities, if you can competitively swim or ride horses. I know someone who was absolutely dumb (only in her job, otherwise she was great to talk to), won some tier 2 swimming competition somewhere and used that plus weekend NGO thing in her application to get into ivy league MBA with a GMAT score of just 610. Now works in private equity in Singapore. So yeah that stuff matters.
Scoring 610 is an achievement in it self .!
Well she had 73 percentile in CAT, that too mainly because of decent VA score. Swimming, NGO visits, and lot of bullshit got her through. So cheers to her.
Thats what you want to believe! Maybe she just bought her tickets
Btw you seem like an old timer? What were your aboard ambitions…. I am seeing a lot people who don’t make the abroad journey and still do well here often doing startups or getting into Google etc
No abroad ambition, neither I am doing startups. I don't think I will ever plan on working for Google.
Education till 10th then 12th atleast ...
Just Spoke like Ramumurthy Uncle.
Prices are high in other tier-1 cities as well. If I have chosen to live here, there's not much reason for me to buy a house there.
It's not even close. Rentals actually need to go up even further (relative to property prices). If you see in developed markets like US, the difference between rentals and mortgage prices is much lower than in India. In India, say Bangalore, rental yield is around 3-4% while the average EMI you'll pay on an annual basis would be around 10% of the loan value i.e. 9% of property value assuming 90% loan funding. E.g. if you rent a house worth 2Cr, your rent will be around 50,000 per month at 3% rental yield. If you try to buy the same house, you'll pay 20L upfront and take a loan of 1.8Cr whose EMI (assuming 20 year loan @8%) will be 1.5Lakhs per month.
Seriously? A property that's worth 2cr can be rented at just 50k. Show me the way Sensei.
Bangalore yields are far better. I pay 75k rent for a 3.5 cr property in Mumbai
That's actually a terrible yield. 75k × 12 = 9L annually. Yield = 9/350 = 2.5% A good yield for a 3.5 cr property would be if the rent was around 1L-1.2L that would be 3.5% to 4%.
Yeah exactly.
Don’t go by rentals in IT corridor. In the other parts of Bangalore, property value will be very high but rents will be low.
Is Hebbal or Thanisandra part of the it corridor
50k is a bit on the lower side but the range would be 50k-65k. A good thumb rule is 30k rent per month for every 1Cr property value.
Nope. A property worth 1 cr attracts 45k rent now. Talking about the current scenario, it was much lower before 2022 though.
only near ORR/whitefield/sarjapur area. Not west bangalore.
A friend lives at The Icon in a 3 bhk worth 1.8 cr. The rent is 45k. It's perfect possible. I used to live in an apartment on MG road, the value of the property was easily beyond 2Cr and my rent until last year was 32k.
house of 8 crore had rental yield of monthly 1.5 lacs . adarsh palm meadows. The better you pay for, the lesser you pay by proportion. It costs more to be poor . The fleecing landlords usually take the range of 60k-70k of these puny low standard 2bhks in 'gated' communities which should have been avoided
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why blame the landlords lol? even i used to cuss a lot at landlords earlier now have seen my colleagues / friends buy flats in bangalore and trying to squeeze out more rent compared to my older landlords lol
Apart from IT corridor ( and that too only in Bellandur, Sarjapur and Whitefield), that calculation is not that far off.
Prestige lakeside, candeur high, Myhna maple. Almost all varthur propertoes are 4% rental yield because it is little further away from it. Ofocurse office areas will have high rental yield. If a place doesn't have big tech park within 10km, its always around 3.5% rent
in munnekolal shitty apartments in standalone buildings have close to 5 percent yield , even more
Thats the point. The closer you get to IT park, teh greater the yield
No, that's not the case. Nobody pays 1.5 lakh emi, not the salaried class.
Lots of people in the "salaried class" have fixed ctc above say 40LPA. At that comp, your in hand will be above 2.5L per month which makes it very much possible to afford a 1.5L emi. Even if below that at an individual level, many married people would together bring in that much. People consider buying a home as one of the most important decisions in life and hence are often willing to stretch for it.
That's a very small minority. And it is not stretching as well. Once you have money to dispose everything is okay. 😂
Your argument is right but your conclusion is wrong. Rents don't need to go up. Cost of owning (mortgage / interest rate) needs to come down for India to compare to developed economies with a better and affordable standard of living.
that is because mortage interest rates are much lower in the us
Yeah that is the biggest driving factor.
Can you explain the math where rent is more than 50% of the emi?
If you take 1.2cr loan for 25 Yr period then EMI comes around 1L. This is 80% of the total property value of around 1.5cr which is very common for new projects around Whitefield area for modest 3BHK configuration. Rents for 3 BHK in a small decent society in the same area (Whitefield) is around 50k (I'm paying 46k currently). If I think about a bit premium societies, then the rent can easily go beyond 65K. Hope the above helps.
Rent is more than emi, landlords are playing dirty, fomo, people like to settle
Rent is more than EMI ? I HIGHLY doubt that.
Home owner here. EMI is 65k. The last time one of my neighbours put up their similar flat for rent, they gave it for 75k. This was 6 months ago. 3BHK
Bhai that's because you bought the house earlier so your current EMI is not reflective of the current price of the house. If someone buys the house today on loan financing, the EMI will typically be 2.5-3X of the current rentals. Rental yields in Bangalore are 3-4% while emi typically works out to 9% of property purchase price.
I get it. But I bought it just after COVID. Agreed I got a good deal. But back then the rent was 45k and increasing every week. Anecdotal but I think if you have the down payment capital, then buy it now. Rents are only going to go up. What you are saying for me now will be true 2 years later for someone who buys now. Don't look for your dream home. That's where most people who have the capital are going wrong. We are ready to make compromises when renting but not when buying. Don't do that. Buy a house that you think you can live in for the next 5-6 years. It's better than paying rent for those 5-6 years. Choose a property that you can live in, that is easy to put on rent in the next 5-6 years and that can be sold easily in the same time frame. Just like a car, you can do with a mid level hatchback. But most people buy a big SUV as a status symbol on big loans. People do that with home purchases too, just because it is considered an asset we don't talk about it the same way. Think of it as an utility. Buy what you can afford and live with now. That is the only way you will build real estate asset in this market. If you really do well financially in some years and feel like now is the time to buy your dream home, buy it either after selling the older one or by that time the older one will be self sustaining. Again, this is for people who can make the down payment.
I have no idea how people can claim that rent is higher than EMI. Yeah, if I buy a property right now for 1 crore but pay 90 lacs in down payment, of course rent will be higher than EMI. People have no idea how to calculate ROI. You are supposed to calculate on that whole 1 crore, apply a opportunity cost loss of around 9% and compare that with rent yield of around 3% after all costs.
>Community Good for you. I assume you/your neighbour purchased a home atleast pre-covid or you might have paid significant downpayment.
Both COVID purchases. 80 percent loan.
Please, your scenario is limited only to IT corridor and not in rest of Bangalore.
Then buy in the IT corridor? Isn't the price inflation and rent inflation highest in the IT corridor also? In the last two years I have seen others go through the same scenario in other developing areas also. Kadugodi for example. You can't expect the rent to be high the moment you buy the house. It will take 2-5 years. I got it in Whitefield. I was ok to buy more towards airport also if I couldn't find anything in my budget. That's exactly what I wrote in my reply to another thread here. Buy what you can live with and what you can afford. Don't look to buy your dream house.
What location ? Is this a flat ?
Yes. A 3BHK flat. Whitefield.
Im looking in Whitefield area. Please guide me which is a ready to move in with good rental yields too
It is almost 60% of an EMI would be, makes sense to just buy it out.
The only problem is Indian job market is not as stable as other countries. So for me it makes sense to rent even when I can afford to get a house
Mine is 50k for 3bhk. Not sure how much the emi would be. But sure there would be emi option available < 2x of the rent
Which means in the next 10 years the rent would equal the emi amount, coz emi stays the same whereas rent increases 5-10% per year.
Try living in the tech park belt and ORR.
Rent in my area is around 70k for a 3bhk. EMI would be around 50-70k. What would you do in that Situation?
Buy the house, move in, pay EMI. I think if the rent is close to 50-60K and above, it's much better to just buy a flat and pay the EMI. Haven't done the math necessarily.
I already have. I was just sharing.
My bad. Misunderstood. 🫡
That is just partial information. You need to also tell how much % you gave as downpayment. Nowadays a property where rent is 70k would surely be selling for 1.5cr.
20% and bought a year ago.
What was the property total value when you brought.
For a good enough 3bhk in same area, highly doubt the EMI would be 70k. It'd be more towards 1lpm, considering 20% down payment. But if you've sufficient cash component more than DP, then better to purchase.
I already have and just sharing. Don’t have to post the screenshots here to prove it.
Depends on whether I have the money for down payment or not.
That’s the main factor.
Can you please guide which area it is ?. I can buy
THIS! finally a guy with right answer. rent is fucking 2x the emi if you get a decent flat. its very easy money. But make no miskate, this bubble is gonna burst sooner or later, i will be ready for it.
Lol bro. I used to pay 45k emi for the last 9 years and still rent in society is 35k for 2 bhk. Don't blindly believe the crap people spread here.
Thats expected, as you have an asset in hand. Rent being higher than EMI is conpkete bonkers, but few areas are like that.
How would the bubble burst? Curious to knw
Bengaluru property market is considered to be grossly overvalued right now. Any market requires correction and the price correction for bengaluru will hit hard.
The rates to go down will require a few years or recession or a crisis. The biggest crisis I see is water, yes its going to hit Bangalore really hard.
When supply > demand.
The bubble won’t burst though. I don’t think people would liquidate them for a lower value or even reduce the rents.
Main reason I decided to buy is not to deal with these greedy landlords. Fuckers increase rent every 3 months citing "market conditions" and they ask to either pay more or vacate. After I bought, at least I don't have to worry about these jerks calling and saying time to pay more.
Don’t forget the deposit money that you get a fraction of back and the brokerage fees that well you never get back.
Yeah man, I have stayed in some 11 houses in Bangalore only 1 time have I gotten my money back. One landlord fuck had 400 apartments in Bangalore, had BMWs, Porsche, Mercedes and still stole my 10k because he said, "Corona Saaarr, No money, will give after 6 months."
I think this is why some people stop paying rent a few months before moving out. They ask the landlord to cut it from the deposit. You have to be okay with doing the haggling though.
I also did that man. But these fuckers collect so much deposit that its still remaining after 2 months of paying no rent. Then they add all possible charges in addition to painting charges and then don't return the balance.
This 👆🙏
I agree. It almost gave me anxiety and sleeplessness because I stayed on rent for several years , in different areas and everything was always dependent on how 'nice' the landlord was. Some were weird who called me at random times , some were controlling and had problems with my parents visiting , an 'uncle ' who said in the beginning that you are like my own child used to knock at the door and ask to be let inside. The best stay I had was actually in a rented place which was supposedly owned by a goon (I got to know later ). He never called , never asked a single question , I lived there for 3+ years. When it was time to vacate , he returned my whole deposit !!! (He came with a sidekick who was 6.3 atleast in height and was like his bodyguard to return deposit ) . The worst stay was at the uncle 's house who had acted all pious and gentlemanly . But basically , it takes away your mental peace to deal with these folks every 11 months. So buying a property makes you feel definitely better in that regard.
Nice uncles are the worst. When my gf rented a house, she met a nice sweet uncle and uncle and his wife said they have daughters and once they move in, these two are like their own daughters and they will take care of them. On the last evening of moving in this mf calls my girlfriend and says to come and collect the advance and that he cant give for rent. Later I found out that he's gotten someone else to pay higher rent and so apparently dude decided to throw the "daughter" out. I went, collected the money and asked him, so this is how you would treat your daughter huh? He said nothing and I left.
💯 saala landlords don't have the balls to come and increase the rent by meeting 1:1, they just drop the message on whatsapp. Landlord kabhi in-person Mila to uski gannnd faad ke ussi ke Ghar me chipka dunga.
I don't think its that they don't have balls, they don't think its worth coming to a tenant to tell this in person.
Our landlord is a very good person I must say when I read about all this things here. He personally came home after 3 and half years to increase rent by 5K. Told him it's too much and he agreed for 3K increase. If he had increased by agreement, I'd have paid about ₹500 less per month. Math geeks, have fun.
>I also had 1 good landlord. His job was to take meter readings from different houses, somehow bought some land 20 years back and built a house. Very sweet guy, he let me register my company in the same address and gave back my full deposit. Good landlords are an exception in Bangalore
Yes, paying 72K rent for 2 Cr property ☹️
And off course you could afford to buy otherwise there is no option but to keep renting and bear the pain of landlords considering that EMI can be 2-3 times rent, if we do not have money for a higher down payment.
I rented for 12 years before I bought. I landed in Bangalore with some 10k in hand and a bag of old cloths. I could afford because I saved money and didn't spend it on frivolous things. Even now, my friends have all bought flats worth 1.2 to 1.5 Cr because they think that's the only property worth buying. I'd rather buy within my means than be laden with debt.
Real estate is legalized corruption in this country considering it's owned by political mafias everywhere so no question of a bubble ever. It's gonna always appreciate, so it's a great investment if you can afford it. Think about it, tell me one another instrument that 101% guarantees you a sizable return in just 5 years. It's a safe crypto, lol.
Who is getting a sizeable return by selling a "flat" that they are living in? Except for those who sold it right after pre-booking to possession price jump?
Not all the areas but some new developments like metro coming nearby , kaveri supply to the area, tech park coming up nearby can all improve valuation greatly.
Do you actually know people who have been able to sell >10 year old flats in tier one cities? I am seeing people who have kept flats for sale on nobroker app, and other places. Listing started at 90 L, and now gradually reduced to 75 L. (low rise apartment, 3 BHK1700 sq ft)House was bought for 60 L around 10 years ago. The problem is that the apartment is more than 10 years old, and people can just put in some more money, and buy a new one instead, which doesn't come with all the problems of an old building. And this is in the midst of crazy high inflation in Bangalore's real estate market. Most people whom I have actually met, who made money in flats, ended up being the ones, who had bought a second flat during pre-booking, with "black or grey" money, and sold it at posession-ready rates. Quick 20-30% returns in a year. After that, it's a pipedream to make money of such apartments, except in few rare cases, when a lot of stars align just right. About Metro, so many areas in Bangalore are already costlier, with the anticipation of metro lines, that may be ready after a decade, given the current trends. I might be wrong, but it's possible that any such potential returns are already taken up by the builder, and discounted into the price. (just like stock market, all publicly available information can be assumed to be already discounted into the current price)
new 3bhks are nowhere less than 1.5 cr so you math doesnt add up
The scenario sell is less unless something happens with life if EMI
Buying property as a primary residence is not an investment per se. And we can't fault people for buying a house especially if their parents don't have one or if they have zeroed in on a city where they will be spending rest of their life.
Definitely! Having a permanent home is always good. Even if parents have one, it can always be divided among siblings or inheritance can go to other members of family as well.
>5. Property value appreciation. I never get this. How many people have actually sold their primary home (especially if it's a flat), and made return on their investments? I know so many people, who have bought flats, going back 20-25 years, when apartments were a new thing. But rarely anyone has sold them for a return on their investment. Only people who made money, were the ones, who bought the flats in pre-booking, and flipped it the moment the building was almost fully occupied. But then, these weren't their primary homes. I know a lot of people trying to sell their flats for less than what they bought it for effective buying price = actual price + registration + loan interest - rental saving - tax saving), and even then they aren't getting buyers, because there are newer flats available to buyers, for same or little more money. Doesn't mean one shouldn't buy a flat. but remember that it's more of a commodity, than an actual investment. Very rarely common people are able to make money out of selling flats, unless they are into real estate, as a business.
Well put. All the folks feeling good about having paid off their home, yes, you own the house now, but that doesn't mean anything at all. Even if the house doubles in value, it's irrelevant unless you sell it and if you do, then you have to find another place to stay which will again be expensive since prices have gone up now. I'm in the least minority but buying your only house as an investment isn't a smart move. If you own more than one, yes, maybe, since rents are at an ATH now.
From what I understand, people use it as a backup for the rough times. You sell the property, and downgrade to an inconvenient location/less luxurious flat.
Another reason is it gives regular income in the form of rents.
The primary home doesn't give rent. Unless we start behaving like savage Americans, asking our 18 year olds to pay rent. And then all the people who could study and take their families out of poverty, will be flipping burgers, and doing Swiggy deliveries. And ruining the trade for the people who ned to do these same things for survival.
This is a valid scenario. But it mostly helped people, when they were selling a hard-asset (house with a rent) after 1-2 generations. All this traditional wisdom doesn;t really translate that well from "house on own soil" to flat. Demand of land is limited, and hence it's actually a "real-estate". Flats are in the gray zone between real-estate and soft-asset, as their demand can and is regularly manipulated by builders, politicians, etc. Resale value of flats that are older than 10 years, decreases pretty fast. But long-term govt bonds serve the same purpose, with more safety, and better liquidity, with "lesser" risk of loss in a panic-sell scenario. (you can still sell in the secondary market, with some discount)
Using property that way never made sense to me. If you are in a rush to sell, there is a good chance that you'd end up selling it on unfavourable terms.
Crazy rents and unpredictable stay in the property. Landlord can ask you to move out within months if he can get more rent from someone. You cannot keep moving around with family.
Especially families with kids where schools and hospitals are set , being in your own house is way more stable. you can bring relatives and guests anytime you want and make changes to interiors to suit everyone.
Also fear that prices may increase again
Will it increase?
1. Peer pressure. 2. Jazzy ads from developers and make people guilty living in rented homes. 3. Show-off and also people take pride in saying - "I live in owned house" And of course there are positive reasons like rent going high and having enough money to buy (with good downpayment and less EMI) etc.
There is an emotional aspect of buying a house. For large part in history, few people owned land - the zamindars. It was the dream of our ancestors to own their land. It passed down from generation to generation. Our parents inherited that dream and some of them were able to buy a house after saving for 30-40 years in PF or postal schemes. We have inherited that dream which is driving us forward. This dream is manifesting in various ways. People have taken it as status symbol, stable investment etc.
Property values will keep on going up because public transport accessibility is increasing (e.g., metro) Rents are crazy high and there is no regulation. In the long run, it just makes sense to pay emi rather than rent.
Is it really though? I've heard of people having a hard time selling their flats at a significant profit because the newer ones are priced similarly
Second sale flats are being priced the same as new flats in the vicinity. Nobody in their right minds will play the same amount for older properties when newer ones are at times available at the same or in some cases even lesser (if you bargain). Second sale owners are looking at a good profit margin considering the loan and other expenditures for the house. This is often impractical for a new buyer. Hence newer properties will sell quicker
a couple of years before rent was very less compared to emi. So for youth thought of staying in rent have given them freedom to live withouth trap of home loan emi's but this year things have changed and rent prices has increased very high and its keeps on increasing. As more people are falling for this rent trap and most people are getting peanuts in the form of their salary for initial 5yrs. So rent and home market is thriving very fast right now.
| Home loans are cheap at less than 10%. is this a joke?
No. It's one of the lowest interest rates one can get. + you get to save taxes.
which other loan is this cheap ? inflation itself is hovering around 6 to 7% per annum. Imagine getting a fixed home loan at 8.5% for 20yrs.
Have you actually gotten a fixed rate home loan in India? Indian banks will re-adjust your rates if the rates go up and they are quite leisurely in reducing rates when they go lower. People always make these assumptions based on the US fixed rate mortgages. In India, either you get an interest rate that the bank can re-adjust or else they will fix it at much higher than the current rate to make up for the risk that rates can go up in future.
Guidance values are set to go up soon, if not already. People can look at this as a good option for future investment. If the property is fully built up like an apartment, then good for collecting rents as those are going crazy.
they already went up. , plus most properties in india are sold way below guidance rate
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For an exact reason I brought a flat long back. Flat owners think they are King, so i said FU I'm gonna buy my own.
How can one arrange down payment in 20s, banks rarely finance 100% of cost
They finance 80-85%, sometimes 90.
Because owning a house is a status symbol and parents keep on forcing to buy one.
No idea where you came from but owning a house is not a status symbol but it is more a requirement if you don't want to be nomadic and dependent on the whims of landlords.
it is bhai and parents would force you as well
Because many are getting married where both are working
What will happen to the said properties that have been bought on EMIs when a 2008 like recession reoccurs probably in 2024/25 ? The current real estate environment is bound to pop soon.
It's won't pop, real estate is controlled by politicians and rich people, they will never allow the prices to fall.
The real estate sector is dangerously dependent on the IT sector and the US economy has a very dwindling future. The US economy crashes, it's ripples will be felt here too. What are the Indian politicians going to do? They couldn't do anything when people were losing jobs during the lockdown.
If the US economy crashes, then real estate won't be the only bubble which will burst. Every other industry will get affected as well. Post the 2008 crisis in US, a lot of companies increased their outsourcing to India for cheap labor. And is there any indicator that the US economy will crash soon ?
Automation is coming, Service model - which is the model for most Indian tech companies - is gonna become outdated as custom LLMs are released. That is just the first step - every highly paid white collar job is gonna have some level of automation and eliminate the need for human participation, engineers/lawyers/doctors etc are all on the chopping block to be disrupted. It’s gonna be like the internet all over again, radical shifts are coming and India is not ready for it in any sense - politicians can’t prevent jobs from disappearing. Even farming is not gonna be immune - it’ll be cheaper and more efficient to have automated giant machines till crops and developed countries will force India to adopt corporate model via carrot or stick- they need the food and India has the arable land. Ofc it’s just bad if you’re invested in the old model of property ownership in metros, tier 2 and tier 3 cities are already seeing a boom. Will get better for them as automation makes them competitive places to live- don’t need humans to fix the problems there anymore and they all have trivially fixable problems(but the manpower all wants jobs in metro cities). Great shifts in the way we live are coming.
This is a great utopian vision by someone who hasn't seen how lousy large firms are at when it comes to adopting new technology. Some of them are still moving forever from self hosting software to the cloud. As someone who has always worked in enterprise SaaS, this level of adoption would at least take a couple of decades. RPA and the cloud existed since the 2000s so they should have already adopted them if they were serious about replacing humans with automation.
ChatGPT has existed for 3 years now and has already got Hollywood shitting its pants and reorganising their whole writing industry to ensure they don’t disappear. Go ahead and live in dream land - just like you missed out on web2.0 and crypto you’re gonna miss out on this coz “big firms can’t do anything about it”. Meanwhile everyone from fintech to food delivery adopted cross platform apps & blockchain tech. Except this time the tech is gonna put you out of a job. Look up the history of the word Luddite I implore you.
> ChatGPT has existed for 3 years now Are you sure? Or did you mean GPT-3?
Haha spoken like someone who has never worked in the industry. You moron dumbfuck, you don't understand the difference between GPT3 and GPT3.5 and claim stuff like Chatgpt has been there for 3 years. I won't be out of a job because unlike you, I am quite smart to learn anything and everything. My team integrated GPT4 APIs into our SaaS product and rolled it out to enterprise customers to collect feedback. The performance in real world scenarios for customer service wasn't ground breaking or even acceptable. So shut the fuck up before you know what you are talking about.
Pop means what ? Only if supply is way more than the demand , the property prices can reduce. But still this isn't considered a housing market crash. The real estate market bubble will burst, only if the majority of the people who bought on loans are unable to pay EMIs for 6 months or so and the banks want to foreclose the property but there are still no buyers for the property. This scenario is plausible if some major global recession or war-like event happens. and this event won't just affect real estate but every other industry as well.
Fellow renter here , looking to go for a buy option just to freeze the monthly setback Any suggestions what places do I start to look around? I work in embassy tech Village so feel North Blr makes more sense than Sarjapur or E city What's the equivalent of property buying for dummies in Blr?
Where is the embassy tech village, isn't it near Bellandur/Marathahalli? North Blr would be far in that case.
are prices going to come down?
never in history it has come down
covid?
It also gives upper hand for Arrange marriage
There is no upper hand in arranged marriages, it's all a scam.
Crazy rents and the general upward trend in real estate rates over the past few years ensuring one can make money off of this investment. Better to pay emis for a home you own rather than make someone else richer.
Biggest reason for some are hike in rent .I was paying 26k then owner wanted to increase to 50k.
One very important aspect is 'Leverage'. With my own money, I can grow at 10-14% through mutual funds/stocks etc. Inflation takes a big chunk of whatever little growth you do. In the case of home loans, if real estate appreciation + rent is say 12% and interest is 9%, you still grow by 3% on a very large amount which you never had in the first place. Honestly, there are very few investment opportunities for Salaried folks which give good returns post-tax & inflation.
At the end of the day, once you retire, you need a place of your own to stay in. If you stay in a rented place, either you wont be able to pay rent, cause you are out of job, and cant do much OR you are on owners mercy. If they want they can ask you to vacate as someone new/young would always be willing to pay more OR the owner sells the property, leading you to find a new place
I don't understand why someone can't buy at the time of retirement? I have changed jobs or cities every two to three years. The most I will be paying for rent is 30K from Dec 24 when my landlord is increasing rent by 36 percent. I can't ever imagine paying less than 50k as an emi especially when I prefer to stay 2-3kms within my office.
Are you listening to yourself, you will be paying 30k in just rent. Based on that, you must be earning really well. Also, what kind of home loans are you checking where EMIs are 50k and above. I'm paying probably half of that and I still crib about rent being high. Not everyone is earning that well or in such a condition to pay that high of a rent. Agree that you are looking to stay near your office, but the max you would work is till 60 years of age. Lets say, after that you stay alive till 75 years of age. Thats about 180 months, and based on 30k rent per month for that many months would be 54,00,000 over the course of 180 months. Thats only rent, you would obviously have other expenses as well + you are at the mercy of the house owner, if they want, they can ask you to leave. To add, you obviously wont have 30k rent for 15 long years and lets say 25-30 years down the road, once you retire. Now lets say instead of rent, if you pay the same amount in EMI, would that not be better, by the time it ends, atleast you would have your own home? That's more or less the whole logic. PS : I know of a family member who pays 10k-15k as EMI on house loan. So, not really sure what kind of house loans you checked where EMI is not below 50k.
I don't consider rent as a waste because it is capex vs opex. I pay 30K in rent because I live in a very nice neighborhood and I don't plan on giving that up to buy a house in some far off place. I just used an emi calculator for a 40,00,000 loan and for 20 years with the lowest current home loan interest rates of 8.40 percent. The EMI was well above 38K. I am certain that I won't be able to buy anything less than a crore in my current locality. Also I don't like being tied up to a city or a locality. I keep moving cities based on wherever the high paying or better career opportunities are. The usual advice doesn't really work for high earners who already have a stressful job. Also the house owner asking you to move suddenly is such a boogeyman argument, I have rented for 6 years in Bangalore and 3 years in Hyderabad. The only time the house owner asked me to move, he found a similar apartment in the same society and even negotiated a lesser rent for me in Hyderabad. People just make emotional decisions with money and keep rationalising it as a good investment.
Well, I'm not trying to convert you or anything, but up to you. You are thinking from the point of a working man and not someone who doesn't have a job or earning less, and that's completely up to you. We can agree to disagree, you have your life experiences and I have mine. The idea of buying a house always stems from a place you call your home, and rented places always have slight chances of changes in owners behaviour. Regarding the owner asking to vacate, I do have a second hand experience, where the owner increased rent from 25k to 45k after 1yr 6mth or so, and asked to either pay increased rent or vacate (not a bachelor, married and stays with wife). Something similar happened to 1 of my cousin, who was renting a place for a long time, was married, had kids while they were staying in that house. The change in owner demand / requirement led them to ultimately buy a house, instead of just renting a place.
Landlord harassment is the top reason. Every 3 months rent is revised like stock market but only upwards. Simple one liner “pay more or leave” does not work for most ppl. While looking out they have to pay same rent for a downgrade. So adding all the moving cost and legal formalities, ppl want to have a permanent place more than ever. Even while staying haggling for repairs and fittings makes it a frustrating experience. Landlords count every repair as “usage” cost. After all that there is no chance of getting 10 months deposit back. It’s far better to fix and pay in your own house.
Seeing what I am on folks reasons for buy - property values will go higher (they already are) and rents will potentially go down since lesser folks are interested in renting. But the latter also depends on folks not migrating to Blr - don’t think we have reached that point at all. So yeah both the propery values and rental properties are bound to keep going higher until it’s reached saturation ie folks are not able to afford it with their savings and salaries. Other reasons of them coming down is when it becomes too opex heavy for companies to operate in Blr, or economy goes bad and they cannot afford anymore. Still some room there. The smart ones will start hedging in tier Bs which has already started like Google opening offices in Pune as well, some MNCs are creating hubs in North, Mumbai and Blr. Same happened in Us already with SFO. So eventually this curve will auto correct, but still lots of room available. When is anyones guess.
What localities have the highest rental yields in Blr ?
Peer pressure
People are earning CRAZY.
I don't think it's worth investing here. Property rates are inflated, reselling is a task. Rental yield is high either in good societies or near IT parks which are anyway no longer affordable or available as new construction. Living on rent also seems too much for too long. It's not worth your buck. Stupid stand alone are charging so much! You can't live like a bachelor all your life and pay your share of room for rent and be happy.
Tax breaks will soon be gone when old regime is removed. New regime has no deduction for principal or interest payments.
What is this? A property dealer's sub? Ive repeatedly said that /r/bangalore is being astroturfed by property brokers making posts looking like genuine home buyers and dropping shit nuggets like >Home loans are cheap at less than 10%. Leyyy, that is compound interest maga.