hi ladies, we are building a house in my dh's native (arcot, near vellore) for rents but thier the rental charges are very very low like for double bedroom they give us only 3000 and single BR 2,000.:spin the cost of the land itself was 70 lakhs(4,000sq feet) and first we planned to bulid only ground and first floor for 90 lakhs and now my inlaws are forcing us to build the 2nt floor and the cost is 40 lakhs. now all togther we are going to spend 1.30 crores alone for the construction....... now my question is is it worth to invest so much of hard earned money on this building??????? i said to my husband to fixed deposit the 40 lakhs in the bank so that we can get nearly 37 thousand per month as an intrest rate.........on the other hand as a rent we are going to get only 35 thousand for 2 crores..........:bonk friends please guide me which option is good...... is it good to invest on the building or is it ok to FD?????????
rental income never justifies the investment cost..and i definitely find 1.3 too HIGH. i would say spread your money and not put everything in that one basket called RE. if it was a first home, yes it is justified to build..but for rental purposes no..remember rental even in metros does not justify the investment cost sans a few ..like one of my acquaintance invested 1.30 crores in a flat 4 years back and gets a rent of 60k..that is pure gamble..
shanvy thanks a lot for your quick reply........i am finding very hard to convince him now ........he is blindly investing nearly 2 crores in an undevoleped area..........am really confused now.......
Investment for rental is never a good idea. Investing so much in one project,that too in a place which is not very developed and is not a good idea. If you were investing in land...it would still make sense. Convince him to instead invest in a small flat in a happening place which is likely to see escalation in prices (if he is intent on buying real estate)or convince him to buy land in a place which is likely to see planned development in the near future.
Being the person who rents is always a BIG hassle. Repairs, things going on by the renters that make trouble, damage to property, not paying the rent (!!!!), income tax ramifications, list is endless. My view is the only ownership of real estate is for quality of home and for profitable business. My two cents. You are correct in your assessment of the return on investment.
Hi, My Suggestion would be to retain the property as such.Definitely land value will appreciate considerably within a short span and have the money in FD. Rama
