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The real estate market is similar to the stock market, with its peaks and troughs always seeming to make perfect sense in retrospect. Also, both markets reflect the economy of the country and offer good investment opportunities. However, the risks must be understood along with the opportunities. Realty index will appreciate five times, but not the stock market.
The profit margin inherent in stock investment has always been higher when compared to other asset classes. Stock market investments offer advantages such as liquidity and flexibility, which real estate does not. Stocks also offer growth rates that the real estate market can rarely match
Home ownership is the most primary form of real estate investment. Unlike stocks, real estate is a tangible asset that provides for greater psychological comfort, security and satisfaction. Also, the return on investment for real estate is reasonably consistent because of the phenomenon of property appreciation. Stock markets are far less predictable.
At a young age, you can invest 300 per cent of your total assets by borrowing for your first house. Experts believe that your total monthly instalments should not exceed 30- 35 per cent of your gross monthly income. This is a good starting point and you should work towards reducing that number over a period of time.
At a young age, you can invest 300 per cent of your total assets by borrowing for your first house. Experts believe that your total monthly instalments should not exceed 30- 35 per cent of your gross monthly income. This is a good starting point and you should work towards reducing that number over a period of time of the city, if it is from a good developer and fits your budget, but at the launch stage and when you exit, you get some value appreciation. That becomes your seed money. Most banks allow you to exit one loan and take another. So, you can sell off the smaller priced property in a peripheral location and use that as seed money to buy where you would like to stay. Else, you will always be behind the market in terms of finance.
Many new home buyers get excited and forget to consider the amount of cost they need to pay to acquire a home. Over-expectation from your income can put you in a financial stress. Your EMI should not be more that 30-40 per cent of your take-home salary. If the property markets in your city are very expensive and you cannot afford the property that you want to stay in, invest in whatever is affordable even in the periphery of the city, if it is from a good developer and fits your budget, but at the launch stage and when you exit, you get some value appreciation. That becomes your seed money. Most banks allow you to exit one loan and take another. So, you can sell off the smaller priced property in a peripheral location and use that as seed money to buy where you would like to stay. Else, you will always be behind the market in terms of finance.
In general, there is Stamp Duty to be paid every time there is a transfer of ownership. It is calculated on the basis of the total value of your property. The amount to be paid varies from city to city.
For calculating the monthly home loan instalment, consider your monthly family income - now and expected in the future. Family income includes yours as well as your parent's or spouse's income. Secondly, your family's current expenses, including all other loans you are servicing, are very important to be considered. Do not spend more than 50 per cent of the total income on a monthly EMI.
Most often your own bank (e.g. where you have your salary account and most banking relationships) will give you the best interest rate. Also banks have preferred or invitation pricing and you can benefit from these special schemes.
Remember to value the said property which is mortgaged to a bank. In the first place, you will be required to clear the loan of the bank and then proceed to register the property in the name of the buyer. It is also possible that you, the new buyer, as well as the bank execute the agreement simultaneously.
Should I go for buying or renting a house is the question everyone faces at some point in life. To determine this one has to consider various factors such as property price, rental amount, loan details, prospects for appreciation & taxes. To make the decision easier, we have the Buy vs Rent Calculator designed for you that will help you in making the right choice.
This calculator compares the expenses during buying and renting. It depends on the inputs like:
The calculator then determines buying cost & renting cost and displays the break even period.
Based on your income, different banks consider different percentages that you can set aside for paying EMIs. This percentage depends on parameters like your occupation and number of dependents. Your EMI is then calculated based on inputs like
The calculator then lets you know how much loan you are eligible for. Generally Medical allowance and LTA are not considered as part of income as banks consider them as reimbursements. Banks also consider the borrower's credit history and CIBIL score before sanctioning the loan.
The higher your ability to pay back the loan, higher would be the amount that you would be eligible for. Similarly, the loan amount is higher for bigger tenures and lower interest rates.
There are other ways to increase your loan amount like clubbing your income. You can jointly apply for a loan along with a spouse or any other earning member of the family to increase your loan eligibility.
EMI are used to pay off both interest & principal each month. It is calculated on the following parameters:
EMIs can be reduced by increasing the time period, but this will come at a cost of more interest to the bank and liability for a larger duration.
To know the individual component you can use the Loan Amortization calculator. Check Now
You will need to enter a few details like:
Calculator will use these details and the approximate details of the new loan that you can get. It will then compare the two loan options and advice you whether to switch the loan or continue with the existing one. You can however modify the details of the new loan.
This calculator helps you find out how changes in the rate of interest might affect your monthly payments. If you keep the loan tenure same (period for which you have taken the loan), then this calculator will display the new EMI based on the new rate of interest. However, if you choose to keep the EMI same, then it will show the new Tenure.
This calculator lets you know whether part payment or foreclosure of the loan is beneficial for you. Based on what you choose, the outstanding principal is calculated. The calculator assumes that your EMI's will be constant and the tenure will reduce in case of part payment. Thus, based on the outstanding loan, rate of interest and EMI, new tenure is calculated and benefit on interest saved is displayed.
An EMI has 2 components, Principal and Interest. The initial installments have a higher share of interest. The Interest component gradually decreases towards the end of the loan tenure, which in turn increases the principal component.
This Calculator separates the Interest and principal that is paid for each EMI payment. Borrower can use this knowledge to evaluate the possibilities of prepayment, switching loan or simply to understand how much he has already paid to cover the principal and how much is the balance, similarly for the interest.
Check out how much interest you can save by prepayment Check Now
More than 20,000 properties are posted everyday on Magicbricks. Based on price, location, area, amenities, age of property, demand and supply, we calculate the value of your property and compare with the similar properties that we have in our database.
This calculator considers possible scenarios of property buying and renting and evaluate the return on investment. If the property is purchased with cash, then the inflation is considered to know the present value of the property and that is measured against the actual current price of the property to know the return on investment and compares this with the inflation.
If the property is purchased with a loan, then the present value of the down payment and the EMIs are calculated and measured against the property appreciation to know the ROI.
In the both the scenarios, calculator has provision to accommodate the rental income and calculate the overall return on investment
Do your complete research on the Web and physical survey of the projects. Invest in projects which are at least 25-30 per cent complete as this will be comfortable in terms of approvals. Brokers may sometime offer better rates than the developer's sales team. Bank approved projects are preferred since they give comfort in terms of the approvals.
It is impossible to predict a return in two years. Property buying as an investment must be looked at in terms of long-term holding capacity. While in the last two years, certain properties in metros have gone up by 20-80 per cent, in some cases that cannot be an indication of what the future holds. An exit after four years usually yields great returns
Infrastructure development has to keep pace with the swanky townships being planned in most cities. If water supply, electricity, safety or security, law and order, road infrastructure, etc are progressive, we can only expect appreciation in the land value.
Identifying a suitable location is one of the most important tasks of buying a property. Users normally question about choosing best location to reap good returns on their investment. Connectivity of the property with city and other location plays a vital role in boosting the re-sale value. Buyer should ensure that the property is located in an ideal area with good connectivity to the bus station, railway station, airport and super market etc.