Want to buy a 2 Crore home need suggestion ?

Will this be a primary residence and his first property, if not I don't see any reason to go into debt over it.

Assuming a ROI of 8.4% and loan amount of 1.2 Cr

If
Term is 15 year EMI will be 117466
Term is 25 year EMI will be 95819
Term is 35 year EMI will be 88739

It is advisable to keep EMI at 30-40% of salary, how he is going to do that

Assuming it's metero city looking at the valuation.

It all comes down to,

1. Cash left after Emi

2. Monthly expenses

3. Occasional travel/dinning etc

4. Marriage/child educational expenses

5. Potential salary hikes/income hikes

6. Dependent old age parents

1.2Cr is huge amount since emi has to be paid every month till 25-30 years, he should be very cautious. Selling and buying is very tough job, it becomes harder to sell high value properties as people who can afford reduces significantly. 

Also the property appreciation maybe equal to the interest paid on loan(my own estimates). 

If the property is earning some rentals along with stay, then it would be ok.

I suggestion: if he buys the home ask him to take a term insurance (of not already have one) covering the ~1.5Xloan amount, it will make sure the loved descendents will not be in trouble.

@whyred my initial hesitation exactly. Real estate has gotten way out control, normal people can't buy anything.

from recent personal experience, i would not suggest someone to spend their entire savings and again taking huge loan for house and be in debt for significant time. i know it is everyone's dream to own a dream house but in today's market it is a trap.

ps: no offence to anyone.. but just an honest real life review

is this tier1 city .. ? tier 1 builder ? there is a property price boom in pan India .. and I don't think its going to stop .. 

I do not think any bank will give so much 1.2cr loan for 1.2lacs/month salary

We should consider even Income tax rise in near future because of freebies wave😌

He should look for another home,there are always better options available.

 one can not enjoy the home with so much tension

Calculated madness... budget should be 1 to 1.25cr max...

I would suggest to buy property ranging from 80 lakh to 1 cr. taking 1 cr loan will put huge pressure on a salaried person. I myself bought a flat for 2 cr.(had to buy high value property to reduce capital gain on property sales). Its present value is 4cr+ as it is 2kms from my office and is located in prime location. but for me my property value is zero as I live in it. It will be an asset to my future generation when they sell this.

Where is this place anyway, Your friend wants to buy?

Everything is done by Friend..

Purchases

Frauds

Worng Transfers

Fraud calls receiving

ITR Notices receiving

He's going to pay his entire Salary in the EMI and 0 savings left.

Not at all the good idea. Better, negotiate with the seller. Sometimes if they are in hurry to sell, they do negotiate a lot.

Going beyond 1.25 - 1.5 Cr is not suggested based on this situation.

suggested to go ahead if your friend

1.  can share the loan with a partner and the liability comes to 0.6c/person

2.  is having a steady job and assured of regular hikes and protected by term insurance.

3. have other properties which can be sold / has good family  financial support 

Do not mix investment with business.

Business: Take loan and invest and rent it out.
Invest/Asset: Take loan and live there and enjoy (Unfortunately, 1L/month salaried guy can enjoy the unit which is less than 50L).

at first He won't get loan of  1.2 crore on salary of 16 lakh/year ,  Maximum banks lend out 5-6 times of annual salary , with EMI + plus Income tax , your friend will be left with Zero rupees in hand 

Bookmarked the thread.. OP is the location Hyderabad?

Baki sab toh thik hai koi yeh Bata do woh kaunsi bank hai joh 1.2L salary walo ko 1.2cr loan de rahi

Jokes aside, banks give home loan upto 100% of your salary but they consider only 60% of your salary into acc rest are consider as living Expenses.

If he is married or there is another earning member in the house he can take the co-join loan & can harvest tax benefits.

Also, Factor in lifestyle Expenses, home expenses,  kids expenses before taking loan, coz it's going to be with you for longer time (for some more than there marriages )

Also, the decent 2bhk in tier 1 cities especially Mumbai starts around 1.5cr+ so it's not a really big amount as from comments

try to keep ur emi at max 30% of salary...so decide ur budget accordingly

getting a good flat is big thing n delaying purchase is also not very advisable as property rates keep on increasing

@Best_Deal_Hunter 

more details required.. like

age of ur friend

spouse or family members working? if so total income of the household.

My General suggestion is its best not to invest in a "dream home" till the age of 50 or atleast 45. 

By doing so u can invest the surplus in a some good equities which grow in a long term or index funds etc. this will result in a debt free dream home buying expreiance...! coz equity growth is significantly higher than the real estate growth...!

with time our priorities and likes will chagne bro.. who knows he might be interested in buying an indivual farm house in outskirts of city or suburb which will be very much cost effecient compared to a prime location real estate.

ur must ask himslef these below questions for himself  before taking this decision.

whats the likely hood of staying in the same city for the rest of his life... ?

any abroad oppurtunities he is interested in?

lastly..

buying a 2cr home supported by his own income is very bad idea bluntly put...!

plus u dont necessarily need to own the property (with huge debt)  to experience the same..! u can also rent a simliar property with some compromises at a very significant monthly outflow compared to the present arrangement. plus no huge commitements and freedom to shift anywhere without much cost involved.

30000 rental would seems a very good deal compared to 85k monthly EMI....!

peace of mind is a very valuable asset for growth and which is very muh underrated nowadays...!

@arko1983650 @ramadesidime

Gone are the days when old people used to buy property in double digit thousands or single digits lacs but sell them in crores.

Dont expect that kind of return think if you buy in crores u will end up triple digit crores like past.

India's main natural resource = Cheap human labour which is why rental yields are the lowest in the world so that masses will not suffer.

Japan was what China is, India is what China was, Africa will be what Japan, China & India was.

Plus AI is challenging the cheap labour which India has as its main export.

India is reaching its peak and what goes up must come down as it pure economics.

Get a budget home & with 80 lacs cash in a tier 2 town, no need to leverage if you want a home for living unless u need a house for money making via rent etc.

Big EMI which catch up with you, your relationships, your life, lifestyle. There is more to life that HOUSE.

HEALTH IS WEALTH. 

Really shocked to see such pricing in 2nd tier city.

Having bought 3 flats and sold 2 in tier 1 city, I feel it just doesn't make any sense going for such Transaction.

If he is debt free and has 80L in hand , he can easily buy decent 2-3BHK flat.

Consider Pune tier 2 city for example.

Never Consider such high value real estate as investment and selling it becomes very very tough. (Based on personal example).

No point on buying a 2cr home, what if your wife put a false case on you and later get the house for free as a part of alimony.

Depends on which city you are targeting man. 2Cr is lot of money. But if you are looking for a flat in Mumbai then you can only get a 2BHK flat,  nothing close to the picture you have against your post.

What is  the rent of this property

I have purchased a property worth 1.8 in Gurgaon prime location as I was fed up paying huge rents, I will get the possession in an year and will be happy that my money will go to my own property instead of someone's account as rent.

I will be paying 90 L in installments and other 90 in loan, My household Salary is 2.2-2.5 L.

I do feel some financial constraints while planning vacations, but having own house is worth it.

He can take a loan for 15yrs .. easily...

And get a 2Bhk in mumbai (south) (average builder, or under development property)

Or buy a 3bhk in thane or upper mumbai ..

(If mumbai is a choice for him)

30 year law is fine but it will be very difficult to implement. builders wont like it as then the price of the flat will decrease significantly. constructing again will be significant amount for the residents.

government i think wont pass any strict law to enforce this as anyway finding housing is costly and difficult. lots of people buy old flats as they cant afford new flat. I can easily sell my 3bhk old flat for 75 lakh upwards which is more than 35 years old. a new flat will cost 90 lakh to 1 cr in my area.