Decision during uncertain times.

[magblr]

Dear friends,

Like most of us in the forum I also dreamt of building a small and beautiful house(30/40 site) for my family.Due to uncertainity in the economic situation and also looking at the way companies are cutting jobs it's really become more painful for me take a bold decision on constructing a house.I would like to explain my situation and seek your expert opinion on how to handle this.

I currently live in a own house built by my father 30 years back and this house has 2 single Bhk house for rental in groundfloor and its rent is pension for my father's hard work.We all live in 2bhk house in first floor and its little uncomforatable now as the family has grown bigger. So i was thinking of building a new house which can be more comfortable and in a better locality.

I have 2 plots one is DC converted B khatha plot and another is BDA plot. My earlier plan was to build a house on BDA plot and retain the B khata plot for few more years and mean while go for loan and build house.Past few months there has been lot of uncertainity in the job front and little scared of going for bank loan.Given the current situation there are 3 options Iam thinking of

1)Continue to stay in the current house and let the uncertain times pass by then I can think of constructing house
2)Take a bold step sell the DC converted plot and manage some more funds and build the dream house.
3)Build as much as I can afford which mean only for my living now and have an option of expanding the building in the later stages.

I would like to know what is the best way I should handle this situation.All inputs provided by the forum members will be very much appreciated.

Regards,
magblr

[sreekbda]

#3 is the best. If there is a crisis then you can always sell your DC plot later.

One bit of advice would be to make sure you contribute as much as possible and take as little loan as possible.

[blackstallion76]

Hedge your situation with option 2 with less loan. I am in the same situation and went for large loan as i dont have option.
But, always try to hedge based on current needs.
In Kannada: "Hasige iddhastu kaalu chaachu". I remind myself every single time and we need to be disciplined to follow this.

[adroit]

Friends,

Is the current economic situation and future forecast so badd ??

I own a BMRDA site near EC. Instead of constructing there i am looking at a plot in a BDA approved layout.

I would be taking a huge amount of loan both for plot+ construction . Is it advisable or shall I drop the plan and construct in the BMRDA approved site itself.


Please advise.


thanks
Vamsee

[sayishkn]

Dont plan to sell the DC Converted Site. better you go with Option 1 or take some risk and go ahead with construction in BDA Plot. You can consider constructing additional rooms on the current house if that is possible.

[magblr]

thank you guys for the inputs specially the saying "Hasige iddhastu kaalu chaachu". I do beleive in this.

@vamsee I work in IT industry and I have seen closely associated with clients,they are postponing all there IT spendings which means they are cutting cost and not giving work to companies and how long will companies pay without work to be done. Lot of my friends have been shown door in Bangalore and this looks like it will increase in the coming few months. If IT is hit the cascading effect will be on all sectors specially in bangalore where lot of money comes from IT.

I am trying to be cautious being in the industry so better do a complete due deligence before deciding. If you are certain about your income for next 5-10 yrs then please go ahead with your plans.

[magblr]

In continuation to the above discussion I need some more info to decide something.

Iam thinking of having a 2 car parks in GF and single bedroom kitchen living area pooja and first floor with 2 or 3 bhk duplex and create a external stair case to construct in future a 2bhk house for rental purpose.

What is the kind of budget i need to have for a duplex 3-4 bedroom house at the current prices level. For example 45 lakhs or 55 lakhs for a decent construction. Please advise.

Regards,
magblr

[aries31]

Hi magblr,

I suspect the uncertainties are not going to end anytime soon ( I am self-employed in IT). With 2013/14 elections, it might get worse.

If I were you, I'd take a loan and build with only the minimum contribution from self. Retaining our cash with ourselves gives us the freedom to use it anyway, especially, during hard times (I hope you don't encounter one). If you have, say, 20L extra ( in FD?) and use it to build, you can never get it back and can never use it in any other way (eg: you could let out your home and move to low rental home and actually earn some money plus use the FD mentioned above to repay home loans on time)

Once you move to the new home, the existing house can be let out 100% . One of the spare sites could form an emergency backup (you could sell it and place it in FD and use the interest to service the loan but never completely pay back the loan principal itself.) Also note that, the loan+int is fixed in todays rupee, but it gets smaller as a % of your income as years go by.

But more important, I would like you to consider getting a good grip on home building. I see that architects (always?) use templates and fixed ideas but we can shave off 5-10% of the cost by optimizing the spaces, removing unnecessary walls/doors/windows/elec wiring/pipes, reducing aisles etc. (eg: My previous rented home had about 6 excess doors!) You can also consider money saving ideas (Nirmiti Kendra etc)

[Ravi h.g.]

"Hasige iddhastu kaalu chaachu" saying is for "SPENDING or EXPENSES"

not for EARNING INCOME BY OTHER OPTIONS APART FROM REGULAR INCOME. ITS PURELY PERSONAL OR INDIVIDUAL ABILIT(Y)IES. For some, it works and for others it wont. but we have minefield of information on bangalore real estate in this forum and do due diligence and take a call.

all the best folks,

regards,
ravindra kumar hg

[JollyRogers]

My 2 cents:
Just believe in yourself, Have faith in God and take the decision recommended by your parents. They will always advise what is the best option for their son.
"Man cannot discover new oceans until he has the courage to lose sight of the shore".