Wednesday, January 27, 2010

Apartment or Individual House - Which is best?

When it comes to buying a house, its almost a 1yr job.... very good tamil saying"veeta katti paaru... kalyanatha panni paaru", its 100% true. Ok coming back to the topic, will it be apartment/flat or individual house which I should buy. Actually it depends on the person who buys ;) I have discussed advantages/disadvantages on both option.

Individual House - Less Money - More Effort - When I say individual house, its you own land and an house constructed in it. It can also be empty land.

Apartment/Flat - More Money - Less Effort - When you go for an 3BHK / 2BHK apartment, you have tension free life, just occupying the property. Effort is all taken care by the builder who promotes.

Lets consider an example for this. my place of interest is Porur, so let me take that place for explaining this. I did a search for apartment/flats in porur and the min/max rate in that place was Rs.3000-Rs.5000 per sq.ft. (excluding registration, eb, car parking, furnishing). Now I searched for individual house in the same area and the min/max rate was Rs.1100-Rs.3000, this is only for the plot, so add Rs.1200 for construction charges, which comes to Rs.2300-Rs.4200.

Immediate savings is around Rs.800-Rs.1000 in this. But wait, when you go for individual house, you have to directly for everything starting from sale agreement, Encumbrance certificate, documentation till sale deed registration, and if you avail bank loan or housing finance loan, then its going to be real difficult, because of the documents they ask for and you have to go everytime they call you for. When you buy the apartment, the builder already gets approval from 2 or 3 banks or housing finance companies, so you just have to submit your documents to the builder and they take care of handing over the property to you. You only have to go to sub-registrar office during registration.

So guys, decide which suits you, money or easy life....... choose between them ;) Happy Investing

Monday, January 25, 2010

Additional Tax Saving - Salaried

This post will help salaried persons to save a good amount every year. 90% of the companies have TDS facility where the employer deduct tax during salary, before that they ask for employees investment declaration beginning of every financial year. Idea is when employer asks for investment, declare everything like 1L investment limit, house rent to the max, 1.5L home loan principal, Loss from let out property etc etc which will bring down your tax to Rs.0. This way employer does not deduct tax from your salary. Now when employer asks for proofs of your declaration during financial year end, simply submit the proofs of whatever investment you have done really. This will force the employer to recalculate the tax and deduct it only during feb and march, ofcourse this could take away your whole month salary too :)

Savings: Consider your tax per month is Rs.2000. When you declare everything as told above, employer does not deduct that Rs.2000 pm, which you have to invest in an Recurring Deposit from either post office or reputed banks which will yield an interest of 7%. Rs.2000 for 10months in RD for 7% interest


So Jan month end you will have Rs.653.03 addition to your regular tax of Rs.20000. Now during Feb and Mar when your employer deducts tax, you can coooooly pay Rs.20000 from your RD and end up saving Rs.653 additionally.

Happy Savings :)

Sunday, January 24, 2010

Gold Investing Strategy

Being in south India, GOLD tops the list when it comes to special occasions, starting from birth, wedding, investment etc and the list is endless. ok coming back to the topic, why one should invest in gold, and what is the best way to invest

1. Gold ETF - Gold Exchange traded fund
2. Physical Gold Coins/Bars
a. Branded 24 or 22 carat
b. 24 or 22 carat from jewellers

Gold ETFs can be brought only when you hold a demat account, this can be done online through many agents, who charge a nominal brokerage. From investor perspective, who wants to invest little amount on regular basis and while selling does not need money immediately. When you hold ETF, selling will take couple of days for your money to be credited in your account.

Gold Coins/Bar is another option to invest, which does not require demat account or pan card. You can buy them from any bank or jewellers. Bank charges amount for its purity and seal, whereas jewellers charge 3%-4% as wastage, but its less than the amount charged by banks. Some jewellers offer Rs.40-Rs.60 less per gram, which adjusts for the 3%-4% wastage, so finally you buy gold for its actual price.

Simple investment strategy

Suppose 1gram gold Rs.1000
Wastage(4%) Rs.40
Total Rs.1040
Discount(Rs.40 less) Rs.40
Final Price(1gram) Rs.1000

Advantage in buying gold coin or bar from jeweller is you can exchange them for jewels, you can even get money back from them (ofcourse sell it to the same jeweller where you bought). Most advantageous is you get your money immediately morning, evening, night, weekdays, weekends anytime when jewellers are open :) Happy Investing in Gold

Powered by Blogger.