Save the IT People from Debts

I've been watching Hyderabad Real estate closely for the last three years and the following e-mail forward made lot of sense to me... If I were the author of this post, subject would have been 'Save NRI from Debts'.. I'm not kidding... Hyderabad IT people can't afford to buy a 3-BHK flat in hyderabad ,forget about the non-IT people. I was discussing the same with one of my cousin today and he said even non-IT NRI's could't afford these rates.

Though I have not written it, I completley agree with these stats.

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Property market in Year 2001 -2004 was quiet Ok , People were able to buy Flats in reasonable rates .

Year 2005 -2006 , Some of the well known builders started the rates boom , flat which was at the cost of Rs.900 Sq Ft now became 2200 to 2800

Q: Are there any additional facilities ?
--> No Same Scheme/Area , Flat sold at 10 Lacks Now selling at 25 Lacks .
Q: Why Property increased so High ?
--> IT people competition to buy sweet home ...
Q: Who is going to Benfit from this Property Boom ?
--> Only Builders and some of the Politicians
Q: How is the Bank's support on Home Loans ?
--> Last Year, Bank gave the loan's at flexible mimimum rate, Now Banks has sufficient number of customers , (Trap) Slowly Banker's increasing interst at % 0.5 every month .
IT People Who bought house for 22 Lacks for 20 Yrs , Now became 23 Yrs with raise of 0.5 %
Q. How some IT people can face the problems in Future ?
--> Companies are Project Based , If Projects are there then People will not be there .
Q. IT salaries are high in Market , How much actually IT-people getting in Hand ?
--> People, Who bought house of 22 Lacks to 40 Lacks They need to pay EMI
15,000 to 35,000 for 20 Yrs, If bank keeps same interst rates.
Suppose Salary is 35- 40 K Per Month, 20K will be the EmI
Q. Is there any "Terms & Condition or Processes to increase rates" ?
--> No, Depends on Buiders Greediness. Every builder follows the different strategies
Builder sold one flat 1500 Per Sqft in Morning and 1800 Per Sqft in the Evening,
There are no records maitained ...

Q. Who made builders smart & greedy ?
--> Fool IT people ..
No body is asking, Flat was sold at 12 Lacks, Why now 24 Lacks?
Q. Is Corporation water & MESB available to all schemes ?
--> Some of the area don't have the Corporation water at all , People surviving on Water Tankers.
** MESB .. Under Table ,can be managed easily .
Q. What will be the condition If We are not able to Clear the Loan ?
--> Depends on individual capabilities
Q. What wiil be the actual 'area of living' or carpet area if the builder proposes 1000 sft?
....> The actual carpet area will be 800-850 sft only. The common area is also included in the proposal.

If two flats are in the same floor, then the builder cheats both the residents by collecting.

How do Builders cheat buyers? ... Let us see with a simple example

Builder XXXX proposes a flat in a decent residential area.
Rate ( Unit Price ) - Rs. 3500 sft.
Registration - Rs. 40 per sft.
EB and drainage - Rs. 50,000
Covered Car park - Rs. 1,25,000
Corpus fund - Rs. 50000.

For a 1000 sft flat ( 850 sft carpet area ), the approximate cost will be Rs.37,65,000. In the same plot area ( measuring 2 grounds) the builder would have constructed 8 or 10 flats.

Let us see how a builder earns his profit

Total sales for the builder - 37, 65,000 *10 = 3, 76, 50000 ( 3.76 crores)
Cost of the land - Rs. 40 laks per ground

1) Total cost of the land - 80 lakhs for two ground ------- A
Total builtup area for 10 flats - 10*1000 sft = 10,000 sft
Construction cost per sft ( for normal specification) = Rs. 900 per sft
2) Total construction cost - 10,000 * 900 = Rs. 90,00,000 -------------- B
3) Other expenses for the builder - Rs. 20 per sft = Rs. 2,00,000 ................. C
Total expenses for the builder = A+ B+C
= Rs. 80,00,000 + Rs.90,00,000 + Rs. 2,00,00
= Rs. 1,72,00,000 ( 1.72 crores approx)
Total Sales = Rs. 3.76 crores - Rs. 1.72 crores
Total profit of the builder = Rs. 2.04 crores.
Let us see the share of each resident
1. Cost of land = Divided share among the other 10 residents
= Rs. 80,00,000 / 10
= Rs. 8,00,000
2. Construction cost = Rs. 900 * 1000
= Rs. 9,00,000
3. Other expenses = Rs. 2,00,000 ( approx)
Total = Rs. 19,00,000 ( Nineteen lakhs)
The total share for each resident is Rs. 19,00,000 ( Nineteen lakhs only )
but he pays Rs. 37.5 laks for the flat.
Q. How We can stop Builders -Property Boom ?
1) IT People should stop buying flats for at least next 1-2 Yrs.
2) Once rates are reasonable, with some legal process get the Booking.
3) Check Facilities, Convince, Road Approach, schools & Mainly co-operation water
4) Ask Questions If I buy 1/2 BHK at 12 to 30 Lacks, Do I get reasonable value in future?
5) Today you are capable for paying 1000 -3000 maintenance per month? Will it be the same case after 20-30yrs after retirement?
6) In All, Don't stretch more to get the more & more loans other wise it will create unnecessary pressure and tension.
7) Read the above mentioned calculation carefully, when you are about to buy a flat pls keep this in mind.