Dear Friends,
Both the mails were well thought and a timely feedback to people.
My name is Raja and I live in Saudi Arabia. I am out of Mettur for more than 15 years now [in Gulf and in East Africa].
Incidently I am also in IT Field.
I want to share some inputs to you in this regard.
[1] The Property boom in Tamil Nadu [Chennai in particular] and IT areas as whole.
[2] The Loans and Debits for IT people.
[1] The property boom in Bangalore has been remarkable in the last few years. 100 Rs per Sq feet has been boomed to more than 2400 Rs per Sq feet in some areas.
This graph is very steep in this example and in many places it has been 5 - 8 times.
Reason is simple. The same old " Supply and Demand".
Land will always have a DEMAND as the Supply is limited.
Demand for the IT people has been forced indirectly by the government also.
Because - the UNEXPECTED - BUNCH of money, which is followed by the huge tax - LEAVES the new IT person [who is almost fresh and is almost with no experience in investing].
He goes by the traditional method of 'Investing in LAND and building".
Govt gives rebates to TAX if invested in Home / House.
In a way - it is good. EVEN IF THE IT person is out of JOB, he will be able to sell it and be out of DEBT... [but practically is this going to work.
Question: Is there a better way to come out...
YES,, one of the experience consultant - suggests the following.
1. Never COMMIT yourself for more than 20 -25% of the salary.
[But this is upto the individual. May be if the guys are married to another IT spouse, then they can go.
2. Smart Investing.
Incase if you are buying a house, then THINK - the budget of the house
a. Suppose you want to invest around 20 lakhs.
Experts suggest that split this amount into two. [not necessarily half]
Option 1. Buy a piece of land with the first part and invest the remaining in house [if necessary]
Idea is that "Land has minimum maintenance.,
Land has minium tax
Land will have better appreciation [where as Building depreciates].
DONOT GO FOR ANOTHER HOUSE, unless this is important. Because INVESTMENT wise, land is the best.
Option 2. If you have money and if you can manage fund, Buy two lands from the total amount.
Within few years, the land will appreciate.
Sell one piece of land.
with that money, build your house in the remaining land. [May be you will have built NOT ONE HOUSE, but two houses.
Ex: One of my friend bought two land units for around 3.5 each [7 lakhs] 5 years back.
Now the same piece of land is being sold for more than 15 lakhs per piece.
One he sold for 15 lakhs.
He is building now a two storey building with 750 Rs per sq feet construction.
He is going to have around 2000 Sq feet built area. Almost one two bedroom and two single bedroom houses.
Even if he sells the single bedroom flat [600 Sq ft] - he will get not less than Rs 10 lakhs.
Again making profit.
While investing in land or Building:
Normally any investment on Land and building is not a waste.
However, the location of the land is very important.
Incase most of your colleaques are investing - KINDLY STAY AWAYYYYY!
But try to invest as a group in a scattered way.
Because the habitations should start. The IT guys will invest for INVESTMENT purpose and not for building houses.
That means - that particular area INVESTED [as a group] will RARELY prosper as NONE of them will build and THE GROWTH would lesser.
But this is only a caution. If some one is buying with the intention of building [the above factor is not there].
Secondly, cross check with the local market [not the promoter], but the land owners near by or the land owners near few hundred meters.
ALL THE PROMOTERS will try TO TAKE THE MONEY FROM IT PEOPLE, the land cost and also the 2 -3 year appreciations now only.
So - you go to be very careful.
tips:
1. Try to go near to the Railway tracks, Bus stands.. Even if this is walkable distance, nothing wrong.
2. For a living purpose, the land on the mainroad is not good.
One of two plots inside is more PEACEFUL.
NO DUST
NO SOUND
Even when you get children later on, and even if they come out running, your hearts will not beat because of crossing Traffic on the mainroad.
JUST FOR YOUR INFORMATION.
For those who shall take it if they like and share with their friends, and also for those who knows it before and can discard these.
S.N. Raja.
----- Original Message -----From: sasi dharanSent: Monday, February 19, 2007 2:47 PMSubject: [ Mettur . com ] Save young People from Debts... Stop the Inflation..
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How many of you are ready to follow this?
Hi,(below email "Save the IT People from Debts" was wonderful and we should go through it and also forward to all our friends)Real Estate price hike is known open robbery from IT guys by brokers / whoever it is and it's not only Flats / Real Estate, IT guys undergo open robbery from all rich shop owners / a person who wanted to become rich as fast as possible...The salary whatever we get, it's our hard-earned money, most of the times sitting in the night, away from family functions, friends, etc...but all our money or most of the money are going to someone who just takes advantage of our stressful life (both mentally and physically) and our new western life style.I do not find anything wrong in having a US / UK life style, but many open thieves (starting from Ministers to our local Restaurant owner) just swindling all our "legal money" and as we do not have any other choice becoming poor / debtor day by day.Well most of the price hikes are just unbelievable and there is absolutely no justification (few examples given below).Chicken Biriyani ) - Rs. 65Today (since last 2 weeks) same Chicken Biriyani (believe me, there is absolutely no change) - Rs. 78, there is no justification for such a big increase.Pop Corn ( PVR Complex) previously (month and half back) - Rs. 20Today (almost the same quantity) - Rs. 30 (again, i do not find any justification)Corn in Garuda Mall previously (month back) - Rs20 Small, Rs 30 Medium and Rs 40 HighNow, No "actual" small and real small has become 35 now and 45 for high... [Are they the farmers who have given their blood to grow this ](In PVR complex, many price hikes are really too much for no reason...)Chips packet (Gangotree) previously (three months back) - Rs. 15Since last two Months the same packet costs - Rs. 20 (again, I do not find any justification)Room Clean (just once) - Rs. 200, that's bcos they cleaned IT guys room.(The moment you say that you are from Software company, the price automatically increases...) We guys already pays big taxes from our salaries and goes on paying other taxes too (starting from Hotel Adiga's "Vada" to Scotch in a bar), it's time to think and pledge ourselves that we stop spending just for one month...Reason(s) why we should stop spending alteast for a month:1. 70% of the IT guys occupies the restaurants.2. 80-90% of the IT guys goes to coffee shop, hang around places, bakeries, etc.3. Most of the IT guys goes to PVR,Garuda complex for , MoviesIf we stop going / spending just for a month, their business automatically goes down and they would have no other choice except to bring down the price, that's what happened when IT industry was down three years back.Somehow directly or indirectly we are responsible for this unjust price hike and now, only we could prevent this open robberies, please add your comments or experiences and keep forwarding this email to all your known people, I am sure even if 25% of us realizes and acts accordingly, it could and would make lot of difference to us.(let's try and prevent unjust price hike)Save the IT People from Debts* Property market in Year 2001 -2004 was quiet Ok , People were able to buy Flats in reasonable rates .*Year 2005 -2006 , Some of the well known builders started the rates boom , flat which was at the cost of Rs.900 Sq Ft now became 2200 to 2800Q: Are there any additional facilities ?--> No Same Scheme/Area , Flat sold at 10 Lacks Now selling at 25 Lacks .Q: Why Property increased so High ?--> IT people competition to buy sweet home ..Q: Who is going to Benfit from this Property Boom ?--> Only Builders and some of the PoliticiansQ: How is the Bank's support on Home Loans ?--> Last Year , Bank gave the loan's at flexible mimimum rate,Now Banks has sufficient number of customers ,(Trap) Slowly Banker's increasing interst at % 0.5 every month .IT People Who bought house for 22 Lacks for 20 Yrs , Now became 23 Yrs with raise of 0.5 %Q. How some IT people can face the problems in Future ?--> Companies are Project Based , If Projects are not there then People will not be there .Q. IT salaries are high in Market , How much actually IT-people getting in Hand ?--> People, Who bought house of 22 Lacks to 40 Lacks They need to pay EMI15,000 to 35,000 for 20 Yrs. If Bank keeps same interst rates .Suppose Salary is 35- 40 K Per Month, 20K will be the EmIQ. Is there any "Terms & Condition or Processes to increase rates" ?--> No , Depends on Buiders Greediness . Every builder follows the different strategiesBuilder sold one flat 1500 Per Sqft in Morning and 1800 Per Sqft in the Evening ,There are no records maitained ..Q. Who made builders smart & greedy ?--> Greedy IT people ..No body is asking , Flat was sold at 12 Lacks , Why now 24 Lacks ?Q. Is Corporation water & MESB available to all schemes ?--> Some of the area don't have the Corporation water at all , People surviving on Water Tankers.** MESB .. Under Table ,can be managed easily .Q. What will be the condition If We are not able to Clear the Loan ?--> Depends on individual capabilitiesQ. What wiil be the actual 'area of living' or carpet area if the builder proposes 1000 sft?....> The actual carpet area will be 800-850 sft only. The common area is also included in the proposal.If two flats are in the same floor, then the builder cheats both the residents by collectingHow do Builders cheat buyers? ... Let us see with a simple exampleBuilder XXXX proposes a flat in a decent residential area.Rate ( Unit Price ) - Rs. 3500 sft.Registration - Rs. 40 per sft.EB and drainage - Rs. 50,000Covered Car park - Rs. 1,25,000Corpus fund - Rs. 50000.For a 1000 sft flat ( 850 sft carpet area ), the approximate cost will be Rs.37,65,000. In the same plot area ( measuring 2 grounds) the builder would have constructed 8 or 10 flats.Let us see how a builder earns his profitTotal sales for the builder - 37, 65,000 *10 = 3, 76, 50000 ( 3.76 crores)Cost of the land - Rs. 40 laks per ground1) Total cost of the land - 80 lakhs for two ground ------- ATotal builtup area for 10 flats - 10*1000 sft = 10,000 sftConstruction cost per sft ( for normal specification) = Rs. 900 per sft2) Total construction cost - 10,000 * 900 = Rs. 90,00,000 -------------- B 3) Other expenses for the builder - Rs. 20 per sft = Rs. 2,00,000 ................. C Total expenses for the builder = A+ B+C= Rs. 80,00,000 + Rs.90,00,000 + Rs. 2,00,00= Rs. 1,72,00,000 ( 1.72 crores approx)Total Sales = Rs. 3.76 crores - Rs. 1.72 croresTotal profit of the builder = Rs. 2.04 crores.Let us see the share of each resident1. Cost of land = Divided share among the other 10 residents= Rs. 80,00,000 / 10= Rs. 8,00,0002. Construction cost = Rs. 900 * 1000= Rs. 9,00,0003. Other expenses = Rs. 2,00,000 ( approx)Total = Rs. 19,00,000 ( Nineteen lakhs)The total share for each resident is Rs. 19,00,000 ( Nineteen lakhs only )but he pays Rs. 37.5 laks for the flat.Q. How We can stop Builders -Property Boom ?1) IT People should think about buying flats for atleast next 1-2 Yrs .2) Onces rates are reasonable , With some legal process get the Booking .3) Check Facilities, Convince, Road Approach, schools & Mainly co-operation water4) Ask Questions If I buy 1/2 BHK at 12 to 30 Lacks , Do I get reasale value in future?5) Today you are capable for paying 1000 -3000 maintains per month ? Will will be the same caseafter 20-30yrs after retirement .6) In All, Don't stretch more to get the more & more loans other wise it will create unnecessarypressure and tension .7) Read the above mentioned calculation carefully, when you are about to buy a flat pls keep this in mind.* Please read this carefully * Send it to all you know * Act quickly * Save them from debts.* We can stop the inflation.
R.SasidharanMOBILE: 9845668586
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