Recently, I looked at one of the Condo Apartment near Mumbai. Tuscany Terraces, at Neral, has last few Condo Apartments available on Sale. You can visit there web site here.
We liked the property. Progress is in good shape and the entire property should be ready in next 3-6 months. It took us about 2 hours to reach the place, from western suburbs in Mumbai. Location is slightly inside from the main highway, but this did look like a great issue to me.
On Offer are Studio, Studio + Loft, 1 BHK & 2 BHK. I focused on Studio, keeping in mind my budget. Cost is around Rs.25 Lakhs. The Company offers a rent back option giving 6% returns for a tenor of 10 years with an option to discontinue at the end of 5 years. When you rent back, you still have 30 nights available for your vacation.
I checked if one can rent the room on his own. Yes, it looks so. Though the logistics would be too messy. Other option to increase the overall return would be to rent some of the nights from your 30 nights vacation. That seemed very much possible.
Checked with the banks financing the property. Interest would range from 10.25 to 11.30%. They were not sure if this would qualify for recently announced Govt. package of loans @ 9.25 for amount of < 20 Lakhs. This would be treated as second home, they said. They would fund from 70 to max 85% of the property value, furniture cost excluded.
It looked like a good fit, though I finally decided to skip this for now. Increased margins by banks meant higher contribution, for which I am not ready at this stage. Cash is king. Best way to double your money is to fold it over once and put it in your pocket :) My view is that real estate is set for some more correction though specific properties may not go down further, as in this case. They hardly have many apartments left for sale.
My concern is about the negative spread that I would carry, year on year. The cost of funding is around 11% on flat cost, furniture, stamp duty and registration. I would get returns @ 6% on flat cost. Now for the spread, I would essentially be banking on property appreciation in long term. Indicators like development of the entire area, TMC City in the nearby vicinity, upcoming Airport in Panvel, a new highway connectivity etc. point that good appreciation should be possible. Though for now, I am not in a mood to take a long term bet. Just waiting and watching. I may re-visit this in next few months.
Cheers, Rohit
We liked the property. Progress is in good shape and the entire property should be ready in next 3-6 months. It took us about 2 hours to reach the place, from western suburbs in Mumbai. Location is slightly inside from the main highway, but this did look like a great issue to me.
On Offer are Studio, Studio + Loft, 1 BHK & 2 BHK. I focused on Studio, keeping in mind my budget. Cost is around Rs.25 Lakhs. The Company offers a rent back option giving 6% returns for a tenor of 10 years with an option to discontinue at the end of 5 years. When you rent back, you still have 30 nights available for your vacation.
I checked if one can rent the room on his own. Yes, it looks so. Though the logistics would be too messy. Other option to increase the overall return would be to rent some of the nights from your 30 nights vacation. That seemed very much possible.
Checked with the banks financing the property. Interest would range from 10.25 to 11.30%. They were not sure if this would qualify for recently announced Govt. package of loans @ 9.25 for amount of < 20 Lakhs. This would be treated as second home, they said. They would fund from 70 to max 85% of the property value, furniture cost excluded.
It looked like a good fit, though I finally decided to skip this for now. Increased margins by banks meant higher contribution, for which I am not ready at this stage. Cash is king. Best way to double your money is to fold it over once and put it in your pocket :) My view is that real estate is set for some more correction though specific properties may not go down further, as in this case. They hardly have many apartments left for sale.
My concern is about the negative spread that I would carry, year on year. The cost of funding is around 11% on flat cost, furniture, stamp duty and registration. I would get returns @ 6% on flat cost. Now for the spread, I would essentially be banking on property appreciation in long term. Indicators like development of the entire area, TMC City in the nearby vicinity, upcoming Airport in Panvel, a new highway connectivity etc. point that good appreciation should be possible. Though for now, I am not in a mood to take a long term bet. Just waiting and watching. I may re-visit this in next few months.
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