Need Expert Advice?Our Gurus Can Help

Ramalingam Kalirajan |8290 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Apr 12, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more

Question by rajesg on Apr 12, 2024Hindi

Listen

i had purchased 1 bhk flat for 41 lakh and its 40years old building in bhayander and we are paying 18k emi and we stay in rented flat and its rent is 20k . what should i do should i sell my flat and try to buy another low cost flat

Ans: Here's a breakdown of your situation to help you decide whether to sell your flat and buy a lower-cost one:

Financial Analysis:

Selling Costs: Consider agent fees, taxes, and other selling costs that might reduce your profit from selling.
New Flat Costs: Factor in the cost of a new flat, registration charges, and potential renovation expenses. Will the new flat's EMI be lower than the rent you're currently paying?
Market Conditions: Is the Bhayander market currently good for selling flats? Are there affordable options available for buying?
Benefits of Selling:

Lower housing cost: If you can buy a lower-cost flat with a lower EMI, you'll free up some cash flow.
Consolidated Investment: Selling your current flat can free up capital that you can invest elsewhere, potentially for better returns.
Benefits of Keeping:

Equity Building: You continue to build equity in your current flat, which appreciates in value over time (although this depends on market conditions).
Familiar surroundings: You avoid the hassle of moving and can stay in a familiar location.
Here's what you can do next:

Research Market Rates: Find out the current market value of your flat and the cost of similar flats you'd like to buy.
Calculate Net Proceeds: Estimate the net amount you'll get after selling your flat (deducting selling costs).
Compare EMI vs. Rent: See if the EMI on a new flat (including potential renovation costs) would be lower than your current rent.
Consider Long-Term Goals: Think about your long-term plans. Do you plan to stay in Bhayander for a long time, or might you move in the future?
Consulting a Real Estate Agent: A local real estate agent can provide valuable insights into the current market conditions and help you navigate the selling and buying process.

Ultimately, the decision depends on your financial situation, risk tolerance, and future plans. By carefully considering the factors mentioned above, you can make an informed choice.

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.