Introduction
The recent trend among IT sheeple is to go to onsite within 4 years of joining a job. Save some money by living on bread and jam. Return here and buy an apartment by paying 20% as down payment. Marry a girl and demand dowry to close the loan faster or force her to work so that she can help in repaying EMI. Is a block of space in a concrete structure worth your entire life's hard work? Let me share what I have learnt from what I have seen/heard. I am not against living in a rented/leased apartment or buying an apartment for the sole purpose of renting. But this is for those "clever" people out there who think that buying an apartment for living is a good idea.
Cost and Returns:
Most apartments are built and sold by so called "builders". Those who buy apartments don't own the land. In some cases, the land is given in to collective ownership or in some cases, the builder owns the land while buyers own the house under some agreement. Water connection, electricity connection etc too remain with builder's ownership in some cases. These houses cost a hefty sum of money, that even onsite returns feel way too much. Mostly people buy these houses with loan unless their parents spend their pension benefits or father-in-law wants to ensure a happy life for his daughter ;-) But what happens to the money. These apartments have no resale value compared to land. For example, land prices quadrupled in 6 years at a sub-urban area, but my friend who bought apartment can't sell that for the cost he spent on it 5 years ago. So, technically, apartments lose money at worst or gain meager or no money at best. So, what happens to those who took loan and bought the apartments? They will be paying twice or thrice the amount as interest and get no returns on the property. Sad! Isn't it? On the other hand, imagine if you had bought a land for same amount, it would have at least tripled in value when you finish your loan and hence you lose nothing! Even wiser decision is to buy land for the money you have on hand instead of taking loan. This is the most beneficial investment. But some people have too much money, so they buy apartments and rent it. It may be good. It is better if it is a house built on own land and best if they can buy the entire apartments with land. But for others apartments are poor choice for investments.
I hear some of you saying that instead of paying rent, you are paying EMI. It is better to do the math. How much you will be paying in rent for the same house you own through EMI? Calculate the difference and multiply with number of EMIs. There you go! You can buy another apartment! The best bet is to take a house for lease, even with loan. Pay just the interest for the loan and at the end of the lease terms, repay the loan. Cheapest of available options.
Freedom to Live?
The most important aspect of owning your house is your freedom. You don't need to wait for your turn to get the metro water. You don't need to wait till the fixed time to switch on the motor. You can lock/unlock any door any time. You can use the front space, roof or backyard without seeking permission from anyone and the list goes on. Let me give you few incidents that I have seen in real life!
1. One of my friend is good in rangoli. She moved to an apartment after marriage (bought with some down payment by her father, onsite return husband and a promise from her to help him pay the EMI by working! WOW!!). I told her that apartments sucks as they lack space in front. She said "We have car parking space." I asked, "So, you're gonna draw your rangolis there?"
2. One of my friend was so upset and told me this. Ground water went down in his apartments. He is at 2nd floor. Two of the apartments are not in use (as they went to onsite :D). Ground floor is rented to a family who is not so "rich" compared to these "owners". Now the 3 out 5 apartments need to share the cost of lorry water. But the problem blew up when the ground floor family refused sharing the lorry water. They said, we will fetch water from public water pump. As 2 people can't afford lorry water every other day, they tried their best to convince the tenant. Due to this, the tenant called his owner (in some other city on deputation) and told him that, "If I am to share the cost of water, I will deduct it from rent!". Hearing this the owner took leave on loss of pay and rushed to solve the issue. Then they went to the apartments' secretary for solution. He told that the maintenance fund can't be spent for lorry water. When my friend finished the story, I was late for lunch!!!
3. One of my friend was so interested in vaastu. His vaastu consultant told him that the color of house should be ink blue and he should shift the toilet to some other place. Else he need to do some rituals for Rs. 80,000. He could neither paint the house with choice of his colors nor move the toilet! At last, he rented the house for Rs. 8,000 and saving the money to conduct the ritual. (Extra info: He is paying Rs. 26,000 as EMI every month!) In no way I am telling you should believe in vaastu. But you don't even have freedom to choose the color of your house.
4. I know a person, who lives in an exclusive (people belonging to a particular community only) apartments. One of the owner sold his property and the new owner rented it to a different community. Believe me, now the case is in court. The new owner is claiming the right to rent it to anyone he wishes, while the others in the apartment are siting a clause in the agreement that no other community people can live in that apartment! Again, in no way I am supporting caste/religion based apartments. But your freedom to rent it to anyone you like is not practical.
I can tell even more incidents, but I think the above incidents are enough to make you understand what I mean when I say you have no freedom.
Lack of Neighborhood
Apartment life is nothing but a prison with luxury. People live without knowing the names of each other. There is no co-operation at all in any aspect. The only time they see each other is when the garbage collector blows the whistle. The children are conditioned to play only inside the gates of apartments as the children outside are poor/dirty/indecent. People won't even ask you what happened when you are screaming for your life. But invitations to birthday parties will be prompt to show their stuff off to others and get the gifts in return. Awesome! Maids are the only channel through which news about one apartment travels to other, of course with some annotations!
Light, Air and Nature
Unless you live above 4th floor, you need electric lighting during days too. If you open the window, you are greeted with the nice view of your neighbor's wall. Sunlight has negative probability to enter in such homes. Nights are no better! You need air-conditioning to survive. But don't worry, everyone in the apartments using double-booster will ensure that you bathe in sweat all night! You can't allocate a space to grow a tree. Already the parking space is filled up, you know?
Swimming Pool, Shopping Mall and Lifts!
Very few apartments maintain these advertised "value adds" in long run. And the apartments that maintain them properly are out of reach for the upper middle class. They are only for CEOs and Delivery Managers. Anyway if you reach that level, you will have no time for shopping or swimming. Good luck with that!!! Some apartments raise the cost of maintenance on their wish. If few people refuse to pay, the services are stopped or the remaining people forced to share the expense. I heard one such cozy apartment dweller speaking like this. "Whenever my wife goes to swimming pool, that guy was watching from his balcony. I asked her not to go. What else can I do?"
Cyclic Reasoning
I asked my childhood friend why he bought apartments. His chain of reasoning is as follows.
1. It is difficult to shift house often. (So, why you are shifting house often?)
2. It is hard to travel to new office (Why you change company often?)
3. For onsite chance/ for higher pay. (Why you need onsite/higher pay?)
4. To repay the loan faster. (Why you took loan?)
5. To buy apartment. (Why you buy apartment?)
6. Go to answer 1
So What Can Be Done?
Try take a house on lease (even with loan) that is the cheapest means to live in a city. Else the next best option is to rent a house. Restrict your expenses imagining that you are paying EMI and save the money and buy a land or built individual house in sub-urban areas or even at your native. That will give you returns lot much compared to apartments. Also you can change the house whenever you want. If it is own house, you can modify it the way you want and you are the one who decides what need to be done in every aspect of the house!
Conclusion
Every time some one tells me that they are buying a new apartment, I pity them for their poor choice. They are going to lose their money, freedom and peace of mind due to the ad hype and peer pressure. "Every one is doing it! So it can't be wrong!" is their mindset. Well, that is the mindset of sheep. It is your money and your wish. But whatever you do, do it calculating all the risks and benefits in the long run. Finally, "Apartment", the name suits. Even though the people live closer, their hearts are apart!
Note: If you are a rabid apartment owner and want to vent your anger by commenting here, for your kind information, this blog is not a collective property as your apartment. I own this blog. So my rules apply here ;-)
The recent trend among IT sheeple is to go to onsite within 4 years of joining a job. Save some money by living on bread and jam. Return here and buy an apartment by paying 20% as down payment. Marry a girl and demand dowry to close the loan faster or force her to work so that she can help in repaying EMI. Is a block of space in a concrete structure worth your entire life's hard work? Let me share what I have learnt from what I have seen/heard. I am not against living in a rented/leased apartment or buying an apartment for the sole purpose of renting. But this is for those "clever" people out there who think that buying an apartment for living is a good idea.
Cost and Returns:
Most apartments are built and sold by so called "builders". Those who buy apartments don't own the land. In some cases, the land is given in to collective ownership or in some cases, the builder owns the land while buyers own the house under some agreement. Water connection, electricity connection etc too remain with builder's ownership in some cases. These houses cost a hefty sum of money, that even onsite returns feel way too much. Mostly people buy these houses with loan unless their parents spend their pension benefits or father-in-law wants to ensure a happy life for his daughter ;-) But what happens to the money. These apartments have no resale value compared to land. For example, land prices quadrupled in 6 years at a sub-urban area, but my friend who bought apartment can't sell that for the cost he spent on it 5 years ago. So, technically, apartments lose money at worst or gain meager or no money at best. So, what happens to those who took loan and bought the apartments? They will be paying twice or thrice the amount as interest and get no returns on the property. Sad! Isn't it? On the other hand, imagine if you had bought a land for same amount, it would have at least tripled in value when you finish your loan and hence you lose nothing! Even wiser decision is to buy land for the money you have on hand instead of taking loan. This is the most beneficial investment. But some people have too much money, so they buy apartments and rent it. It may be good. It is better if it is a house built on own land and best if they can buy the entire apartments with land. But for others apartments are poor choice for investments.
I hear some of you saying that instead of paying rent, you are paying EMI. It is better to do the math. How much you will be paying in rent for the same house you own through EMI? Calculate the difference and multiply with number of EMIs. There you go! You can buy another apartment! The best bet is to take a house for lease, even with loan. Pay just the interest for the loan and at the end of the lease terms, repay the loan. Cheapest of available options.
Freedom to Live?
The most important aspect of owning your house is your freedom. You don't need to wait for your turn to get the metro water. You don't need to wait till the fixed time to switch on the motor. You can lock/unlock any door any time. You can use the front space, roof or backyard without seeking permission from anyone and the list goes on. Let me give you few incidents that I have seen in real life!
1. One of my friend is good in rangoli. She moved to an apartment after marriage (bought with some down payment by her father, onsite return husband and a promise from her to help him pay the EMI by working! WOW!!). I told her that apartments sucks as they lack space in front. She said "We have car parking space." I asked, "So, you're gonna draw your rangolis there?"
2. One of my friend was so upset and told me this. Ground water went down in his apartments. He is at 2nd floor. Two of the apartments are not in use (as they went to onsite :D). Ground floor is rented to a family who is not so "rich" compared to these "owners". Now the 3 out 5 apartments need to share the cost of lorry water. But the problem blew up when the ground floor family refused sharing the lorry water. They said, we will fetch water from public water pump. As 2 people can't afford lorry water every other day, they tried their best to convince the tenant. Due to this, the tenant called his owner (in some other city on deputation) and told him that, "If I am to share the cost of water, I will deduct it from rent!". Hearing this the owner took leave on loss of pay and rushed to solve the issue. Then they went to the apartments' secretary for solution. He told that the maintenance fund can't be spent for lorry water. When my friend finished the story, I was late for lunch!!!
3. One of my friend was so interested in vaastu. His vaastu consultant told him that the color of house should be ink blue and he should shift the toilet to some other place. Else he need to do some rituals for Rs. 80,000. He could neither paint the house with choice of his colors nor move the toilet! At last, he rented the house for Rs. 8,000 and saving the money to conduct the ritual. (Extra info: He is paying Rs. 26,000 as EMI every month!) In no way I am telling you should believe in vaastu. But you don't even have freedom to choose the color of your house.
4. I know a person, who lives in an exclusive (people belonging to a particular community only) apartments. One of the owner sold his property and the new owner rented it to a different community. Believe me, now the case is in court. The new owner is claiming the right to rent it to anyone he wishes, while the others in the apartment are siting a clause in the agreement that no other community people can live in that apartment! Again, in no way I am supporting caste/religion based apartments. But your freedom to rent it to anyone you like is not practical.
I can tell even more incidents, but I think the above incidents are enough to make you understand what I mean when I say you have no freedom.
Lack of Neighborhood
Apartment life is nothing but a prison with luxury. People live without knowing the names of each other. There is no co-operation at all in any aspect. The only time they see each other is when the garbage collector blows the whistle. The children are conditioned to play only inside the gates of apartments as the children outside are poor/dirty/indecent. People won't even ask you what happened when you are screaming for your life. But invitations to birthday parties will be prompt to show their stuff off to others and get the gifts in return. Awesome! Maids are the only channel through which news about one apartment travels to other, of course with some annotations!
Light, Air and Nature
Unless you live above 4th floor, you need electric lighting during days too. If you open the window, you are greeted with the nice view of your neighbor's wall. Sunlight has negative probability to enter in such homes. Nights are no better! You need air-conditioning to survive. But don't worry, everyone in the apartments using double-booster will ensure that you bathe in sweat all night! You can't allocate a space to grow a tree. Already the parking space is filled up, you know?
Swimming Pool, Shopping Mall and Lifts!
Very few apartments maintain these advertised "value adds" in long run. And the apartments that maintain them properly are out of reach for the upper middle class. They are only for CEOs and Delivery Managers. Anyway if you reach that level, you will have no time for shopping or swimming. Good luck with that!!! Some apartments raise the cost of maintenance on their wish. If few people refuse to pay, the services are stopped or the remaining people forced to share the expense. I heard one such cozy apartment dweller speaking like this. "Whenever my wife goes to swimming pool, that guy was watching from his balcony. I asked her not to go. What else can I do?"
Cyclic Reasoning
I asked my childhood friend why he bought apartments. His chain of reasoning is as follows.
1. It is difficult to shift house often. (So, why you are shifting house often?)
2. It is hard to travel to new office (Why you change company often?)
3. For onsite chance/ for higher pay. (Why you need onsite/higher pay?)
4. To repay the loan faster. (Why you took loan?)
5. To buy apartment. (Why you buy apartment?)
6. Go to answer 1
So What Can Be Done?
Try take a house on lease (even with loan) that is the cheapest means to live in a city. Else the next best option is to rent a house. Restrict your expenses imagining that you are paying EMI and save the money and buy a land or built individual house in sub-urban areas or even at your native. That will give you returns lot much compared to apartments. Also you can change the house whenever you want. If it is own house, you can modify it the way you want and you are the one who decides what need to be done in every aspect of the house!
Conclusion
Every time some one tells me that they are buying a new apartment, I pity them for their poor choice. They are going to lose their money, freedom and peace of mind due to the ad hype and peer pressure. "Every one is doing it! So it can't be wrong!" is their mindset. Well, that is the mindset of sheep. It is your money and your wish. But whatever you do, do it calculating all the risks and benefits in the long run. Finally, "Apartment", the name suits. Even though the people live closer, their hearts are apart!
Note: If you are a rabid apartment owner and want to vent your anger by commenting here, for your kind information, this blog is not a collective property as your apartment. I own this blog. So my rules apply here ;-)
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