Wednesday, July 2, 2014

Should I Buy a 1 BHK at Pimple Saudagar or a 2 BHK at Pirangut?

Ask Ravi Karandeekar:

Welcome Plaza at Mont Vert Vesta, Urawade, Pirangut, Pune

The other day, Mr. Jayant asked me:
Should I Buy a 1 BHK at Pimple Saudagar or a 2 BHK at Pirangut?

My budget is around 40 Lakhs. I have shortlisted 2 projects.

1) A 1 BHK Flat in G K Developers' Royal Rahatgi at Rahatani - Pimple Saudagar.

2) A 2 BHK Flat in Mont Vert Vesta at Pirangut.

I am confused.
Ravi Karandeekar, please, tell me - What should I do?
Should I go for a 1 BHK at Pipmle Saudagar or a 2 BHK at Pirangut?

1 BHK is not enough for me. Eventually, I will need a 2 BHK Flat.
But Pimple Saudagar is developed & convenient location for us.
Both of us are IT professionals - working in Hinjewadi - living in a rented flat in Pimple Saudagar.

Whereas, Pirangut is not developed and is far away from Hinjewadi.
But - in the same budget - 40 Lakhs - we can get a 2 BHK Flat at Mont Vert Vesta.
Which we will eventually need. Because - we are planning a baby - in the next 2 years. So, we will need a 2 BHK. (We got married 1 & half year ago.)

Ravi, what do you suggest? Pimple Saudagar or Pirangut?

Our combined monthly income income - in hand - is 90,000.

Bank executive told me that I can get 45 - 50 lakh home loan.

But we don't have 20 per cent own contribution - we don't have 10 lakhs - we have only 4 lakhs in our saving account. Actually - it's our emergency fund.

That's why we can't take full loan. We can't buy 50 - 60 lakh rupee property. So - we decided to go for 40 lakh flat.

Of course, 4 lakhs are not enough to book a 40 lakh rupee property. But we can raise 20 per cent own contribution & money for stamp duty, registration charges & VAT.


By breaking fixed deposits & mutual fund investments for retirement. Or we can borrow from our parents. Or get a personal loan.

No. We don't have any ongoing EMI. I purchased a second hand car. Paid in cash.

My wife doesn't have a credit card. Only I have one. But we don't use it. So, no outstanding - overdue - credit card payments.

Why is our budget only 40 lakhs?

We are planning a baby! So, minimum EMI is safer & better.

So, in 40 lakh budget - we have only 2 options.
1) 1 BHK at Pimple Saudagar.
2) 2 BHK at Pirangut.

What should we do? What do you suggest?

Ravi Karandeekar's Advice:

The answer is in your question.

1) Baby is your top priority. Not a flat.

2) You don't have money to buy a home.
You can't use your emergency fund - 4 lakhs in saving account - for the down payment. You can get a home loan but you have no money for the down payment.

Your rational mind - knows all this. But your emotional mind doesn't agree. It is tempting you to take a risk. Go ahead and book a home - at any cost. Your emotional mind is misleading you. That's why you are facing a dilemma - 1 BHK or 2 BHK - Pimple Saudagar or Pirangut.

But the real question is - Am I ready to buy a home?

No. You are not ready to buy a home. Financially & emotionally.

At this point of time - your priority is having a baby.

At this point of time in your life - you invest in your married life - family life. Not in property.

Plan to live in your current rented flat in Pimple Saudagar.
Convenient & developed location for both of you, for your baby and your relatives.
During the pregnancy and after the birth of your baby.

Use your emergency fund - 4 lakhs in the saving account - if required - for the delivery.
Start saving for 20% down payment & other charges.  Keeping in mind the rate of inflation.
And buy a home when buying a home becomes your top priority.
And when you are - financially & emotionally - ready to buy a property.
And buy what you deserve and are eligible to own. Buy a 2 BHK Flat.

Your combined income - 90K per month is good. You are financially disciplined. You are a financially responsible person. You manage your money well. You don't use credit card. You are not in debt. You are saving for retirement. You can plan and succeed in saving enough money for owning a home.

And I am sure, you must be loving your wife too. You will not force her to work - at any cost - during the pregnancy & after the birth of your baby.

You will see that your wife has a freedom - financial freedom - to live her life as per her wish - when she is in a family way or has just given a birth to a baby.

Because you are a man. A financially responsible & rational husband.

I haven't told you anything new. These are your thoughts. Your ideas. Your beliefs.  Your way of life.
Don't let the pressure of home ownership force you to change the way you prefer to live. Be strong. Be yourself.

From me - you didn't want an answer. You just wanted - confirmation.

Am I right?

What about you?

This is my advice to Jayant.
What say you? Do you agree with me?
Please, share your views in the comments.

If you want to ask me, feel free to call me on 919860044110.  First 3 minutes are free! And for more than 3 minutes - pay as you wish - you decide the value of my advice.

Of course, for a serious discussion, better fix an appointment at a time convenient to both of us. So that we can have uninterrupted & in depth discussion on my mobile (919860044110)
- on Video Hangout on Google+
- or on Skype (ravikarandeekar) .

For more than 3 minutes and up to 30 minutes - pay as you wish. After the conversation - transfer the money to my bank account. As much as you wish. From a few hundred to a few hundred thousand crore of U S Dollars or Indian Rupees. Here are my bank account details:

Ravindra Karandeekar,
Bank of Maharashtra.
Savings A/c no- 20047674794.
Branch- Bajirao Road Pune MICR Code 411014010.
IFSC- MAHB0000001

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