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    BUY 2.5 BHK: in This Case You Should

    Uploaded by

    Sudhir Chitla
    - The analysis period is 15 years for renting vs buying a 2.5 BHK house costing Rs. 75,00,000. - Renting the house would cost a total of Rs. 74,72,888 over 15 years while buying involves an upfront cost of Rs. 24,00,000 and interest of Rs. 27,01,796. - Maintenance costs for buying are estimated at Rs. 12,13,794 over 15 years. The total cost of buying is Rs. 1,19,40,591 compared to Rs. 74,72,888 for renting. However, the property value after 15 years is estimated to be Rs. 1,55,91,

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    BUY 2.5 BHK: in This Case You Should

    Uploaded by

    Sudhir Chitla
    36 views1 page
    - The analysis period is 15 years for renting vs buying a 2.5 BHK house costing Rs. 75,00,000. - Renting the house would cost a total of Rs. 74,72,888 over 15 years while buying involves an upfront cost of Rs. 24,00,000 and interest of Rs. 27,01,796. - Maintenance costs for buying are estimated at Rs. 12,13,794 over 15 years. The total cost of buying is Rs. 1,19,40,591 compared to Rs. 74,72,888 for renting. However, the property value after 15 years is estimated to be Rs. 1,55,91,

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    2.5BHK

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    - The analysis period is 15 years for renting vs buying a 2.5 BHK house costing Rs. 75,00,000. - Renting the house would cost a total of Rs. 74,72,888 over 15 years while buying involves an upfront cost of Rs. 24,00,000 and interest of Rs. 27,01,796. - Maintenance costs for buying are estimated at Rs. 12,13,794 over 15 years. The total cost of buying is Rs. 1,19,40,591 compared to Rs. 74,72,888 for renting. However, the property value after 15 years is estimated to be Rs. 1,55,91,

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    36 views1 page

    BUY 2.5 BHK: in This Case You Should

    Uploaded by

    Sudhir Chitla
    - The analysis period is 15 years for renting vs buying a 2.5 BHK house costing Rs. 75,00,000. - Renting the house would cost a total of Rs. 74,72,888 over 15 years while buying involves an upfront cost of Rs. 24,00,000 and interest of Rs. 27,01,796. - Maintenance costs for buying are estimated at Rs. 12,13,794 over 15 years. The total cost of buying is Rs. 1,19,40,591 compared to Rs. 74,72,888 for renting. However, the property value after 15 years is estimated to be Rs. 1,55,91,

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
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    Analysis Period 15 years

    In this case you should BUY your house 2.5 BHK


    Renting a house - what are the financials? Buying a house - what are the financials?

    Monthly Rent? 28,000 Cost of the property 75,00,000


    HRA Tax Benefit? 30% Registration % 7%
    Effective Monthly Rent 19,600 Registration Amount 5,25,000
    Downpayment % 25%
    Yearly Rent you will pay 2,35,200 Downpayment Amount 18,75,000
    Avg. yearly rent increase 10% Total upfront amount (incl registration) 24,00,000
    Loan Amount 56,25,000
    Total rent over the period 74,72,888 Interest rate on loan % 8%
    (this amount is not inflation adjusted) Loan Duration in years 15
    EMI per month 53,755
    This is your expense. But you also gain Tax bracket 30%
    if you invest the amount of downpayment Effective Interest Rate % 6%
    and also the additional interest you will pay Effection EMI per month 46,260
    beyond your monthly rent
    So this should be added as a benefit to Total Interest over the period 27,01,796
    renting a house
    Maintenance Amount (% of cost) 0.8%
    Total upfront amount 24,00,000 Maintenance Amount per month 4,688
    Additional monthly amount Avg. yearly increase % 5%
    you can invest 26,660 Total maintenance over the period 12,13,794
    Monthly Interest minus rent (which increases every year)
    Return you can generate 7% Total cost of buying the house 1,19,40,591
    Cost of house + Interest + maintenance
    Value of upfront amount
    after the period 66,21,676 The value of the house increases as well every year
    Value of monthly amounts Property will increase by what %
    after the period 40,92,777 every year 5%
    Value of property after this period 1,55,91,961
    Net benefit of renting a house 32,41,565 Adjusted for inflation

    So net benefit of buying a house is 36,51,371

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