I am looking for buying a home, in Mumbai the rates are too high for me to buy a 2 BHK flat so I am looking out side Mumbai suburban area where I can afford one. My question is should I take an underconstruction property where I will get some price concession or I should go for ready possession flat? I have 15 years left for my retirement and can afford 60k monthly installment.

Ans: Understanding the Current Property Situation
Firstly, it's great that you are exploring the option of buying a ready-to-move flat. Greater Noida West is a developing area with significant potential. The property in question has been in possession for three years but hasn't been registered yet. The owner has possession and allotment letters, which is a positive aspect. However, some concerns need careful evaluation.

Evaluating the Legal and Financial Situation
Expired RERA Registration
The builder's RERA registration has expired, which raises a red flag. RERA registration is crucial as it provides transparency and protects buyers' interests. Without RERA, you may face legal uncertainties. It's essential to understand why the RERA registration expired and whether it will be renewed.

Builder's Financial Distress
The builder is in financial distress, and banks have defaulted on loans due to non-payment by some flat owners. This situation indicates potential financial instability. Ensure that the builder can resolve these issues and provide clear title ownership before proceeding.

Steps to Ensure a Safe Purchase
Registration in Owner's Name
You mentioned that if the current owner registers the property in their name first, banks might provide funding. This step is crucial for securing your investment. Make sure the registration process is completed before you proceed with the purchase.

Verification of Documents
Thoroughly verify all documents, including possession and allotment letters, and ensure they are authentic. Consult a legal expert to review the papers and confirm there are no hidden liabilities or legal issues associated with the property.

Financial Considerations
Bank Loan Approval
If the current owner registers the property in their name, securing a loan becomes feasible. However, confirm with multiple banks about their willingness to finance this property. Understand the terms and conditions clearly before committing.

Stamp Duty and Registration Costs
The seller's agent mentioned covering stamp duty and ensuring loan disbursement. Ensure you understand the implications of this arrangement. Verify that all costs, including stamp duty and registration, are transparently included in the purchase price.

Risks and Benefits Analysis
Potential Risks
Legal Uncertainties: Expired RERA and builder's financial issues can lead to legal complications.

Financial Instability: Builder's default with banks could impact property value and future transactions.

Loan Approval: Securing a loan may be challenging due to the current financial status of the builder.

Potential Benefits
Ready-to-Move: The property is ready to occupy, eliminating the risks associated with under-construction properties.

Location Advantage: Greater Noida West is a growing area, which could lead to property value appreciation over time.

Immediate Possession: You can move in immediately upon registration, avoiding delays common with new constructions.

Key Recommendations
Legal and Financial Due Diligence
Engage a Certified Financial Planner and a legal expert to conduct thorough due diligence. They will ensure all legal and financial aspects are transparent and secure.

Confirm Builder's Resolution Plan
Ask the builder for a detailed plan on resolving financial issues and renewing RERA registration. This information is critical for your decision-making.

Secure Bank Loan Pre-Approval
Before proceeding, get a pre-approval for a loan from your preferred bank. This step ensures that financing will not be an issue after the current owner registers the property.

Conclusion
Purchasing a ready-to-move flat in Greater Noida West can be a sound decision if all legal and financial issues are resolved. Ensure the current owner registers the property in their name first. Conduct thorough legal and financial due diligence with professional assistance. This approach will safeguard your investment and provide peace of mind.

By taking these steps, you can confidently proceed with your property purchase and enjoy the benefits of your new home in Greater Noida West.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

Ans: Dear Friend,
If you’re considering whether to purchase your brother’s share of the inherited property for ?4 crore, weigh peace of mind against financial returns. Buying his share gives you full control, eliminates potential disputes with a third-party buyer, and ensures no interference in your peaceful living. However, the rental yield of ?60,000/month (~1.8% annual return) is significantly lower than the ~8% return you could get by investing ?4 crore in fixed deposits or bonds, which would generate ~?2.67 lakh/month.

Regarding the terrace, your brother cannot sell his 50% share independently since it is undivided and jointly inherited. Any sale requires your consent, limiting his ability to transfer full terrace rights to a new buyer.

Redevelopment of the property is an excellent option, offering increased value and rental income. Builders are likely to provide additional floors or cash components in exchange for development rights, enhancing long-term financial benefits and ensuring modern amenities.

If your priorities are peace of mind and control over the property, purchase your brother’s share. Otherwise, invest in safer financial instruments and consider redevelopment to maximise the property’s potential. Consult a lawyer and financial advisor to ensure the best decision. Your Financial adviser can deeply evaluate all your assets and liabilities and provide a solution which will give you more leverage.
Regards, Nitin Narkhede -Founder Prosperity Lifestyle Hub,
Free webinar https://bit.ly/PLH-Webinar

Ans: Understanding Your Current Situation
You own two properties in Ulwe, Navi Mumbai.

1 BHK: Loan-free, market value Rs. 50 lakhs, potential rent Rs. 12K/month.

2 BHK (Under Construction): Home loan of Rs. 74 lakhs, EMI Rs. 66K/month, possession by Dec 2026.

You believe property rates will rise due to infrastructure projects like Atal Setu & Airport.

Key Factors to Consider
1. Loan Burden & Interest Cost
Your EMI of Rs. 66K/month is a significant financial commitment.

Over 20-25 years, total interest paid can exceed Rs. 70-90 lakhs.

Selling your 1 BHK and prepaying part of the 2 BHK loan can reduce this burden.

2. Rental Income vs Loan Cost
Rental income: Rs. 12K/month (Rs. 1.44 lakhs per year).

EMI: Rs. 66K/month (Rs. 7.92 lakhs per year).

Your rental yield is just 2.8% annually, while the home loan interest is around 8-9%.

Keeping the 1 BHK does not provide strong financial benefits.

3. Capital Gains Tax on Selling 1 BHK
If sold after holding for more than 2 years, you qualify for long-term capital gains tax (LTCG).

LTCG tax is 20% with indexation benefit.

Reinvesting in your 2 BHK loan is NOT eligible for capital gains tax exemption.

To save LTCG tax, you can invest in capital gain bonds (under Section 54EC).

4. Future Property Value Appreciation
Future appreciation is uncertain. While infrastructure development helps, property cycles do not guarantee constant growth.

Navi Mumbai’s market is already seeing a high supply of properties. Short-term gains may not be significant.

Holding an extra property is only beneficial if the price rise is higher than loan interest + maintenance costs.

What Should Be Your Approach?
Option 1: Sell 1 BHK and Reduce Loan (Recommended)
Sell the 1 BHK after possession of the 2 BHK (to avoid uncertainty in under-construction delays).

Use Rs. 50 lakhs to partially prepay the 2 BHK loan.

Loan burden reduces significantly, EMI can reduce by nearly Rs. 35K-40K per month.

Invest the remaining capital gain in tax-saving bonds to avoid tax.

Option 2: Retain 1 BHK & Continue Paying EMI
Keep 1 BHK for rental income (Rs. 12K/month).

Continue paying full EMI of Rs. 66K/month.

Property value may or may not rise as expected.

Low rental yield & high EMI stress make this a weaker option.

Final Insights
Financially, selling the 1 BHK and reducing the loan is better.

Lower EMI = More financial flexibility for future investments.

Holding both properties only makes sense if appreciation is very strong.

If selling, plan capital gains tax exemption wisely.

Real estate is not the best long-term investment compared to equity & mutual funds.

Reducing home loan burden improves cash flow & future financial security.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment