To buy a flat, HOW MUCH INCOME & SAVINGS should you have? Financial Planning for Property Investment
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- เผยแพร่เมื่อ 13 ต.ค. 2024
- People are generally unable to estimate how much money they should have on hand for buying a flat, and how much money they should be earning every month through salary or business income. Here is a broad set of indicators to avoid getting into trouble by over-reaching yourself financially.
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Krishnaraj Rao
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Mumbai
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Excellent topic. Thanks for sharing.
According to personal finance principles, sum of our total monthly repayments (all EMIs including credit card) shouldn't exceed 40% of our net salary. So in case one wants to afford a 80k EMI, their net salary should be at least 2L per month. Otherwise they'll be house poor.
I wouldn't agree with him on this point. He is saying if you have a salary of 1.4 lakhs then you can take the EMI of 80k, which is close to 60% of your salary. To me, the percentage should never be over 30%-40%. You have to do many other things like retirement planning, children's education, emergency expenses etc to which you need to allocate a good chunk of money. That means your EMI should be a max of 56K and the house should be in that budget.
The thing is, salaries rise too, but the EMI won't. An average annual hike of 10 percent will bring down that allocation percentage from 60 percent to less than 40 percent within 3 years
@@vicks17214 good luck if you think that way. But for the first three years it will be very tight
@@vicks1721410℅ is a joke
General thumb rule, EMI/mortgage should never exceed 25% of your income. @vicks17214:- Good luck with your thinking. Life will tone you down. The more you see, the more you will realize what @pattum7288 said is correct.
Higher emi reduces loan tenure by more than half@@pattum7288
I always thought that the people of up+Bihar+Delhi are extremely cunning because of their poor education and because of them being financially poor, but after watching your video, I realised that, more is the involvement of money in any transaction, more would be the chances of people stooping down to any level to extract more money. I am from Varanasi, Uttar Pradesh. I always had a very positive opinion about the people of the Indian states, not mentioned in this comment. You are doing great service to humanity. You are saving innocent people from penury. Love and thanks.
Thankyou sir for your valuable advice, now a days it has became a trend in millianials to have their own house and post on social media about it. It's clearly a debt trap.I have made it clear in my mind that I'll only purchase a house when I'll have 2x 3x times money then the cost of house
You negative points are the most valuable and realistic view that I always appreciate earlier as well. I believe on u and that's why I am now saving the cash and have decided to buy a ready to move flat. Buying a house is not a great asset nowadays as this is not a liquid asset. Better to have one house for residential purpose and create wealth through investing in equity or other markets. Thanks Krish for ur advise.
People have to pay EMI for 20 years. People may loose their job after few years or have to work with reduced salaries. This is red flag while getting loan.
I have seen almost all videos on TH-cam wrt rent / buy . While many so called experts give polarised opinions only Krish is actually doing justice to the real world ordeals when it comes to buying a house .
He’s a lone wolf who’s like batman . A hero this world needs but doesn’t want .
Your videos sir are truly of utmost help to the ppl who really seek wisdom
But what's his interest ?
@@subharay making the buyer beware of pitfalls .
@@subharay Krish has an interest to educate people.
Really appreciate your dedication ❤ Video publishing at 4 AM 😲 just to help people 😍
Or, it might have just been scheduled for an earrly a.m. publishing too ^_ ^ but, yes, this man is really brilliant and very clearly has a heart dedicated to help common people. Respects for that !
he is owl
bahut bahut shukriya mera bhi thinking aisa hi tha but me bahut confused ho gaya tha jo me soch raha hu wo thik hai ki nhi But aapka ye video dekhne ke baad mujhe sukun mila Ki Mera thinking same aapke jaisa hai..
With personal experience, would always suggest having at least 35-40% of cost of house available before buying one. In 1 cr example, 20L down payment, 12-14L for registration/interiors, 3-4L for electricals/insurance and having some sort of spare cash for extingencies. And for someone buying a 1 cr house, as you rightly pointed out, at least 60K surplus (excl rental, assuming buying ready to move in) from salary after paying EMI is a must to maintain a decent lifestyle.
20/30/40 is a decent thumb rule while buying. 20 year home loan, EMI 30% of income and 40% amount down payment. Problem is real estate prices in metros are so ridiculous that its almost impossible for the middle class to buy a flat.
Thankyou sir 🙏 you opened our eyes and give clarity of thoughts just like God Krishna to save everyone from problems 🙏
I have commented on multiple videos and thankful to you always Its not about you are right are wrong but I always appreciate how you speak honestly and its pleasure to listen to your honesh perspective which opens our mind as well Thank you Keep making more videos .... wish you healthy and happy life
😊😊🙏🏻🙏🏻
You are correct Krish Sahab, According to me emergency fund should be equal to = monthly expense * 12 months (Assuming 0 income for the 12 months). People get carried away and don't realize what problems might come their way.
Sir buying a house now vs equity investment (with price of house approx 12% return annually) and buying house after 10 years, which one u will prefer. Assume I will make 12% unless massive recession strikes
I agree here sir. OC nhi aata inka but they will call you and try to trap you that possession is in next 4-5 months. Here in Gurgaon, even plots delivery takes a lot of time. I wonder what they keep on doing even with plots
I repaid my 20 years loan within 5.5 years. I paid 2.5x EMI + couple of extra repayment. Make sure you should have enough fund to pay 2X EMI min. Suppose on 50 Lacs loan EMI is 45K. So make sure you have 90K EMI available every month. So your family income should be 2lac per month.
Well said!
I am also planning the same, may I know if buying a flat for rental income is good ?
I get 2 lakh per month. Not sure if I should take emi of 50k and payback additional emi and close loan fast or should take emi of 1 lakh and pay on time
@@sandeepsahu1716 real-estate investment with loan not a wise decision. For end use it is okay.
@@sandeepsahu1716for rental income go for commercial spaces or construct your own small building. Flat gives very low rental yield
Thanks a lot for your guidance 🙏
Thanks sharing during early in the morning. ❤
Buying house/ flat is very tough decision in today's time for a middle class family keeping medical expense, nice car, traveling etc etc. everything is so expensive these days. It's better to have a house in small city and stay on rented flat in bigger cities so that you always have sufficient fund for your good health, travel , your career goal and also for emergency situation.
However, if you are someone earning 5 L per month you should definitely consider buying atleast 3 BHK. Don't buy 1 BHK or 2 BHK especially when your parents will also stay with you because you will feel lack of personal space, you should have 1 room for your personal life like doing study, exercise, setting your personal goals etc etc where no kids or anyone can disturb you.
Still job security is also a concern. Even though if someone salary is 5L per month.
@@dcnt071yes, very true. But somehow risk has to be taken it may go either way
Very well explained. Marketing partners/agents/brokers will ensure that you are trapped in any project. Other pointers are also very well covered
Very good advice to flat buyers.
Thank you sir for your valuable suggestion as I am searching for a bigger resale flat by selling my current small flat.
Brilliant topic and understanding of buyers mind krishnarao hi
In case of re development of any housing society, Development agreement between the builder and the society is to be signed by each member of the society However if the municipal authority has so far not sanctioned the development plan of the said re development, whether the members should sign the DA (development agreement) before sanction of the municipal authority approved plan or after sanction of BMC approval
Thanks sir for the advice. Kindly keep the good work going 🙏👏
1.40 L salary se 40L ka saving kaise ho paega....ye pura equation hi tricky hai...
While i agree with Krishnaji, this concept of accumulating emergency fund is more of a western culture where kids need to be independent of there parents after certain age...
We Indians live in close knitted community, it is expected from us to support our old age parents or brother/sister in bad times (So unlike American/European ways we still stay invested in our family) in turn your family will have your back too.....Have a emergency fund there is nothing wrong in it.....but it might take a very very very long time for you to reach that secured amount (inflation will kick in and you'll fall behind the target again).Since Inflation in foreign countries are less its feasible for them to accumulate money that holds value...there healthcare is taken care off too....
You save money....some or the other thing will come up and you'll loose it....
My suggestion would be buy 1bhk first...hustle up and clear the loan...sell that 1bhk...create downpayment and then buy 2bhk...slow but full proof..
Thank you for spreading the awareness Krishnaji, keep up the good work❤️
What worked in the past need not necessarily work in the future . What makes u think ppl in the family will be there to help you out . In this day and age almost everyone is tied up with their own expenses / goal / issues . Best to look after your own self .
Also if u do the math .. selling 1bhk post cleaning off loan will result in loss on HP in most cases specifically metro regions . So it becomes a pointless exercise using 1bhk proceed to fund 2bhk . You would be better off saving directly for 2bhk by staying on rent
1.40 per annum or monthly
Very good
Thank you so much for your advise on this wonderful topic.. Highly appreciate your initiative to educate home buyers, Sir 😊😊
This example is completely correlated to me with all exact figures 😅
Easy solution is to earn in foreign currency of value much higher than Indian Rupees. Work in country like Kuwait, Oman etc this is the most suitable solution. One can repay loan of 20 years in 10 years .
yes starve there instead here
Better to Rent in Pune & invest ur money in 10% debentures or Mutual fund guves 12% to 18%. If u must buy its better to buy resale flat with ready possession in decent neighborhood. Under construction is too Risky
Today's generation have a habit of taking loan and spending on holidays, mobiles, furniture. This mindset has to change.
Just 1 question
What is the guarantee that for next 18 years my job or business will be secure and the monthly EMI is paid on time to the bank ?
Even if you have emergency funds how long do you think it will last ?
In US the rent = mortgage is almost equivalent due to which people prefer buying than renting but what about here ?
Only in tier 1 city has the rent escalated but what about tier 2 , tier 3 ?
Let's assume even if you somehow manage everything then what assurity you have that the developer will hand the possession ?
So many cases pending in RERA where people paid full amount yet they have not seen the keys of their flats.
The legal system has a loophole where the developer files for bankruptcy and people can do nothing. Even if its overtaken by some other developer then too that developer will charge escalated prices and demand more money to complete the project.
This whole calculation of buying a house is out of bounds for the common man.
All thanks to the greed of BANKS , DEVELOPER, STATE GOVERNMENTS
You said: "Let's assume even if you somehow manage everything then what assurity you have that the developer will hand the possession ? "
I completely agree. That is why I gave the example of a ready-possession or resale house, which you will get immediately after payment. Under-construction house is a very dangerous deal.
@@KrishnarajRaoUrbanNaxal sir I am a property consultant and although I don't sell apartments but am very well aware of the issues clients have faced. People ask me why I don't sell flats my answer is simple "my conscience does not allow" . People trust brokers with their hard earned money . The broker will take his commission from the client and the developer and go away while the client will suffer forever if he does not get a flat in under construction. Also I want to personally meet and discuss something with you which will benefit the end user. I hope we can catch up someday.
@@JackK-gg1coyou have catch him by yourself. he is a very busy journalist and won't bother if you don't take it up to him
sir itna sach mat bolo...log jeene nhi denge
Sir, what about those people who make Rs. 40000 per month?
Thank you for such valuable and wise advice.
Sir, All your objections are valid, one point you have not covered that is tax deduction at source in case of salary. Thanks, sir.
Right. I have not talked about taxes at all.
Hi Sir.. Kindly tell me.. Normal independent house like ground floor, 1st floor separately or 3BHK Villa which one is good to buy and for future investment purpose?
Rao Sir , is doing a great yeoman service to common man. Thank you Sir !!!
3-4 times of annual income is affordable ideally... maximum to minimum
I get 2 lakh per month. Not sure if I should take emi of 50k and payback additional emi and close loan fast or should take emi of 1 lakh and pay on time
very practicle sir. appreciate sir...!
Please provide your opinion on A khata B Khata properties in Bangalore..In today's scenario I see most of the properties are B Khata..or properties with no OC.. still the rates are unreasonably high and even then the demand is high..shall I buy such properties because they are cheaper than A khata and OC available properties.
Never buy B Khata.
If purchase ready possession then u live in yhat house and save your rent 25000 per month. You are not think about this . And if u are not live in that home u may give it on rent and earn 25000 rs per month and give to bank as apart of EMI . Means purchasing ready possession flat is increase your income .think on this point and made another video again
Sir, u need a minimum income of 2.5 lacs to have an EMI of 80k
It is wrong
To afford a 1 cr flat your salary should be atleast 2 lakh per month
Assuming 80,000 EMI
Apart from the EMI u also need to account for family expenses (children school fees, health care expenses among others ) also flat is not an investment hence you should also account for that as well
And NEVER BUY AN UNDERCOSTRUCTION PROPERTY
Even reputed builders also dont deliver on their commitment
Sir maintenance include krna bhul gye
These builder log have spread false beliefs that buying flat will make them rich one day for sure and they create such a FOMO that everybody is in the race of buying flat at any cost....they want to take loan worth crores though the earn less than 50000. People are so mad about buying a flat that they will spend 20-30 year in paying unaffordable loans.they realize their mistakenly after 1-2 years.....krishn sir has explained this so well...private jobs are kabadiwala jobs.most of them are highly underpaid and even if some are delivering 1 lac plus salary, there is no guarantee that it will last for 20-30 years....when govt jobs are so few, then what is the level of private job future
Europe
You explained the reality which people dont consider nowadays
Very rightly said
Society comparison and peer pressure or show off is what makes people get into loan traps. Never take loan unless it is completely unavoidable. Signing off 80k emi will make that person a corporate slave for 25-30 years!!!
Bhai emi kam hoti jati hai aur salary badhti rhti hai toh 20saal ka loan 12-13 saal me pay ho jata hai.
Aur emi burden bhi kam hota jata hai time ke saath.
@@baranwalagencies6272 that is just a possibility. Expenses also increase over time due to inflation. And the main point is, that we “have” to work in the rat race whether we like or not. If no loans, the stress of recession won’t be there. And any layoffs can be dealt much easier than with loans.
Just my opinion 😀
Your emi should never exceed 40% of the in hand salary. Never.
Detailed study ❤
You are giving the wrong advice, for 80 K emi 1.4 Lacs salary isn't enough. For safe financial situations, EMI should not be more than 25% of someone take home salary. 3 Lacs take-home salary is required otherwise there will be big turbulence in financial life.
Just learn from Chinese recent debacle....people started buying 2nd flat and even third flats and they now don't have any money to pay for their emis....all these flats and mall shops are empty and hundreds of km away from main cities.
Great advise salute to you sir❤
Builders, brokers have been misguiding people and looking after their income & profits.
I wanted to buy flat and every builder told possession will be given in Dec 22 and till June 23 no one has given possession
Sir ab to bahut se finance companies reckless finance karti hain
.. i am govt employee in delhi another 10 years to retire ... i am looking for a 2 bhk affordable flat ... maximum i can extend is 25 lakhs ... looking for a flat in southern states mainly Kerala, Karnataka
or should i think of buying that 2 bhk after retirement .... i always felt medical karcha is the most important + education of child
what should i do ???
you will get it in teir-2 city only
survey says if you extend a video more than 3mins interest of audience is lost, pls keep video short
Aree bhaiya 😂, agar 40 lakhs savings hai aur 80 lakhs ka loan lena hai (assuming 1 cr flat and 20 lakhs down-payment so remaining 80 lakhs becomes loan ) , 18 years ke liye aur 80k EMI deni hai ...toh usse accha hoga na poora 40 lakhs down payment karo aur 60 lakhs loan le lo (1cr flat minus 40 lakhs savings) aur 18 years ki jagah 10 years ka loan tenure karlo 😮 , usse emi 80k ki hi rahegi lekin home loan 18 years ki jagah 10 years mein khatam ho jayega , bhai .
Ab maan lo 5.5 years of loan tenure dene ke baad JOB chali jaati hai , toh as per calculation sirf 32 lakhs home loan remaining hai after 5.5 years . You shift loan to another bank now for 18 years with a refinanced emi of just 32k per month .
So even if you shift on 1 lakh salary instead of 1.4 lakhs example you gave , then also now you are in better position because now you can save 68k per month for home expenses. The only problem is in between shifting job you will find it difficult to manage but that is where severance pay and your PF comes into play to save the situation. Ofcourse many adjustments have to be made regarding expenses and lifestyle but that is a far better risk than taking loan for 18 years.
puri salary hi emi mae daldo jab tak loan chukta na ho naga gumo😂
Itna toh CRIS Nolan bhi nahi sochta hai movie bananey k time Pe
Flat cost should not be more than three times of your annual income.
so according to you to buy 1cr rs. flat your annual in hand salary shoud be 33.33 lakh?😒
@@SwapnilNawale18
Yes. But not in hand salary Gross salary can work. And it can be streched to 4 times of gross salary also. But ideally housing price should not cross 4 - 5 times of gross salary.
Nothing can help ....i appreciate your calculation but it will not work atleast one should have 60% dp 10%extra income and 30% loan can be taken in reality.
Or else rent is best option for peaceful life.
I totally agree. Your estimate is more conservative than my estimate, and much safer.
bank give loan for 75-80% so down payment for 20-25% usually normally. Some bank give 85-90% of value
@@varunmittal3617 Right. Borrowing 85-90% places the borrower at greater risk very often.
Banks Builders Brokers are target based and they trap you
After RERA, it is better to invest in under construction property than paying a lump sum amount. Always prefer to buy a property from a renowned builder
Many defaulter builders were once renowned. Under construction is a no-no. Check the problems in a particular builder's project approved by HRERA (land issue/litigation problems). People's investments are stuck. Maintenance and teething contruction problem, no OC issues later on top of default and delay. Clients shouldn't be financiers for builder. Default/delay risks are too high to bet your life savings on uner construction.
So at last ur saying to not to buy any flats . Be on rent everytime.
Did not say anything like that. He said buy what you can afford. PPL overestimate what they can afford
Aapko extra sunai diya kya ? Kab bola aisa
*Manglasutra Mayhem.*
Aapki bate sunkr koi flat nhi khridega😂
Bahut bada fraud business hai govt bhi shamil hai
He seems like a frustu
1 लाख सैलरी कहां मिलती है कब तक मिलती है लाख तो ऐसे बोल रहे है हलुआ हो। 25000मैं ca milta hai
Correct. Bahut kam logon ko 1L salary milta hai. CA aur Engineers ko bhi 20K ya 30K salary par rakha jaata hai.
@@KrishnarajRaoUrbanNaxal sir trend of job has changed I am living in gurgaon haryana here in my neighborhood what I see all those who went for engineering either working inn call centre or move abroad doing menial jobs difference is earning in dollars and selling their father's कोठी बंगला and buying expensive houses for showoff
@@bharatsingh-jn3gowhat is ur age?
@@shalabhpradhan529 45 sir
@@bharatsingh-jn3goengineer choti chiz nhi hai sir. engineer mtlb uske hath mae avishkar karne ka gyan hai. kya apko lagta jisne dang se concept pade hoge vo is duniya mae kisi layak nhi hoga. IIt ka 80% tho hoga hi vo. problem ye hai ki knowledge nhi hoti
Why didn't i see u before