From an investment point of view could mean getting returns through rent or through resale. With your earnings, you can go for 1/2BHK flats in Chennai of your choice.
Since there is great appreciation and resale value for the property that is available in Chennai, there need not be any second thoughts while thinking to invest in real estate industry. where you invest and for what features you invest is more important.
are available at every price range suitable for every income group. Opt for those apartments that are located in the major localities to have maximum of returns and resale value.
If you wish to earn through rent, you should look for densely populated and in-demand localities of Chennai like Madipakkam, Porur, Adyar, Old Mahabalipuram Road and Velachery to name a few.
If resale is what you are looking for, you can invest in a rapidly-developing localities of Chennai with appreciating property values. Also in a popular location where you are sure to find buyers for your property at your desired price.
When you buy a 1BHK flat costing around Rs20-30 lakhs in Chennai:
- Minimum Down Payment (to be paid from your savings, 20% of the price of the flat= Rs4-6 lakhs
- Home Loan= Rs16-24 lakhs
- EMI @ rate of interest 9% pa = Rs19K-22k per month for 20 years
- Savings– Around Rs50k per month
When you buy a 2BHK flat that costs around Rs50-60lakhs in Chennai:
- Minimum Down Payment= Rs10-12lakhs
- Home Loan= Rs40-48lakhs
- EMI @ rate of interest 9%pa = Rs36k-44k per month for 20 years.
- Savings– Around Rs30k per month
You’ll also have to keep some margin of around 2-3lakhs. For registration and stamp duty expenses as these are not covered by home loans.
You cannot expect your rent earnings to cover the entire EMI. This would be more of a long-term investment that generates a stable income every month, where you’ll see increased profits once the loan is paid off.
In the case of reselling, you’ll have to time it well so that the property does not become too old to fetch you a good price.
Other investment options
When a major portion of your salary goes in paying EMI, there are chances that your lifestyle might get compromised in the process. You’ll be in better position financially when you save at least 60% of your monthly salary after paying loan EMI.
An alternative to buying a flat now is investing your savings in a fixed deposit. Earning more than 7% of that amount as interest for a few years. When the FD matures, you can use it to pay the down payment. This will reduce your loan burden and it’ll be easier for you to manage your finances as well, considering the fact that you might want to get married in a few years.