Received this question from several readers. I have listed the options a few times before but didn't provide a consolidated list. Let me write a summarized list of options.
Hope you will find it useful. Drop a comment if so ...
Of course, when it comes to real estate, it is location, location, location - the option which you pick mainly depends on location. Most of the other factors like budget etc depend on this as well.
Option #1: Buying an already constructed villa/home in a gated community
This is the best option of all, if you can afford it - this is the only place where you can get some piece of mind, a place to walk/jog, cleaner air, place for kids to roam around freely, gym, tennis courts, swimming pools etc. Also, in most cases, you have full control on modifications (including exteriors. (Unfortunately, few of the builders are taking the western way, where external modifications are not allowed, hanging of cloths to dry are not allowed, no balconies etc). Most of these villas are owned by well educated families and there is a good interaction within home owners association. Hence, the closest you can get to a US/Western style of living. If you are going for a villa/independent home, certainly consider a gated community - you can afford to lock the home away and stay away for few days outside without much headache.
There could be issues here as well - many of these communities depend on tanker water, which is a main issue. Cost is another factor - a good villa in a good location (close to IT parks) can cost upwards of 2 crores. Also, you need to like the style of the house - these days villa builders are using standard styles but in many gated communities, custom building is still the choice. In-addition, there are no disclosures - it is a buyer beware of situation. Get a good known plumber/architect to evaluate the house before you make the purchase decision.
Option #2: Buying an empty site in a gated community and construct a villa/home
This is similar to Option #1 but with the overhead of dealing with construction, which is not an easy task, let me say in-advance. Dealing with contractors, labors may not be your piece of cake but reward is the cost savings - cost savings versus buying a already constructed home could be significant + you are getting a house of your choice. For ex, if only one person is working in the house hold, other person can take care of the construction. Getting a good custom house on a 60x40 site can take up to 1.5 years to 2 years - no kidding!. Issue here is - plot based developments are happening at a good distance from work locations and in suburbs. It could take few years before the place is 'developed' and livable. The plots within the city are quite expensive and you would see very few. For ex, the per sq.ft cost would be in the range of Rs. 4000-5000, which means you are shelling out close to a crore just for the land (assuming 60x40 plot area).
(However, to note, there is no real concept of 'gated community' -- this can work as long as it works. For ex, the site owner next to the gated community may not have access road and may ask to open up the road to get access. The gated community will be forced to provide access in such cases.)
Option #3: Buying an already constructed home outside of the gated community
This could work if you are buying in a good locality but don't do the mistake of buying in a sparsely built area - it would be too risky. I have seen the experience of a friend whose new house was broken into twice in a newer area and they were out during day! You could possibly save a bit with this option but security is a major hassle - you need to depend on friends or employ services of security agency if you are leaving the house unoccupied for few days. Only reason you could opt for this is - house in an area where there is Kaveri water supply.
Option #4: Buying a plot outside of gated communities and construct
All of the issues in option #2 and option #3 apply here as well. Also, the plots in good localities are quite expensive. But, if you prefer an independent home, this is still an option.
Option #5: Buying an already constructed apartment unit
This option is not the best in my opinion but could work well if you are new to Bangalore or don't have much friend/family circle here. It is easy to make friends and kids will have lot of company. However, go only with a reputed builder like Prestige, Sobha, Mantri, DLF etc. Construction quality can vary a lot and can give you a lot of headache. As I mentioned in option #1, there are no disclosures from sellers here. For ex, it could be that the bathroom roof is leaking and the seller is not able to get it fixed from the owner who stays above him or there might be some issues with the home owners association etc. Do get the meeting minutes from the association before you make the buy decision. Also, try to get in-touch with somebody who is living there and get feedback. However, you pay a premium for this option - compared to buying a unit pre-construction, this could offset you by 10-20 lakhs, depending on the size of the unit.
Option #6: Booking an apartment in a upcoming project
If you have time, this is a better option than #5 - this will save some money for you and you will have some customization options as well. The wait could be easily in the range of 2 years but you could get an unit closer to work location. You could possibly rent an apartment unit until construction is complete and then make the move. Here also, go with a reputed builder. Many of the large projects can run into hurdles and may stop work, delay the projects etc.
See my related posts:
http://r2idiaries.blogspot.in/2013/01/bangalore-real-estate-should-i-invest.html
http://r2idiaries.blogspot.in/2013/01/investing-in-bangalore-real-estate.html
http://r2idiaries.blogspot.in/2013/01/investing-in-bangalore-real-estate_24.html
Hope you will find it useful. Drop a comment if so ...
Of course, when it comes to real estate, it is location, location, location - the option which you pick mainly depends on location. Most of the other factors like budget etc depend on this as well.
Option #1: Buying an already constructed villa/home in a gated community
This is the best option of all, if you can afford it - this is the only place where you can get some piece of mind, a place to walk/jog, cleaner air, place for kids to roam around freely, gym, tennis courts, swimming pools etc. Also, in most cases, you have full control on modifications (including exteriors. (Unfortunately, few of the builders are taking the western way, where external modifications are not allowed, hanging of cloths to dry are not allowed, no balconies etc). Most of these villas are owned by well educated families and there is a good interaction within home owners association. Hence, the closest you can get to a US/Western style of living. If you are going for a villa/independent home, certainly consider a gated community - you can afford to lock the home away and stay away for few days outside without much headache.
There could be issues here as well - many of these communities depend on tanker water, which is a main issue. Cost is another factor - a good villa in a good location (close to IT parks) can cost upwards of 2 crores. Also, you need to like the style of the house - these days villa builders are using standard styles but in many gated communities, custom building is still the choice. In-addition, there are no disclosures - it is a buyer beware of situation. Get a good known plumber/architect to evaluate the house before you make the purchase decision.
Option #2: Buying an empty site in a gated community and construct a villa/home
This is similar to Option #1 but with the overhead of dealing with construction, which is not an easy task, let me say in-advance. Dealing with contractors, labors may not be your piece of cake but reward is the cost savings - cost savings versus buying a already constructed home could be significant + you are getting a house of your choice. For ex, if only one person is working in the house hold, other person can take care of the construction. Getting a good custom house on a 60x40 site can take up to 1.5 years to 2 years - no kidding!. Issue here is - plot based developments are happening at a good distance from work locations and in suburbs. It could take few years before the place is 'developed' and livable. The plots within the city are quite expensive and you would see very few. For ex, the per sq.ft cost would be in the range of Rs. 4000-5000, which means you are shelling out close to a crore just for the land (assuming 60x40 plot area).
(However, to note, there is no real concept of 'gated community' -- this can work as long as it works. For ex, the site owner next to the gated community may not have access road and may ask to open up the road to get access. The gated community will be forced to provide access in such cases.)
Option #3: Buying an already constructed home outside of the gated community
This could work if you are buying in a good locality but don't do the mistake of buying in a sparsely built area - it would be too risky. I have seen the experience of a friend whose new house was broken into twice in a newer area and they were out during day! You could possibly save a bit with this option but security is a major hassle - you need to depend on friends or employ services of security agency if you are leaving the house unoccupied for few days. Only reason you could opt for this is - house in an area where there is Kaveri water supply.
Option #4: Buying a plot outside of gated communities and construct
All of the issues in option #2 and option #3 apply here as well. Also, the plots in good localities are quite expensive. But, if you prefer an independent home, this is still an option.
Option #5: Buying an already constructed apartment unit
This option is not the best in my opinion but could work well if you are new to Bangalore or don't have much friend/family circle here. It is easy to make friends and kids will have lot of company. However, go only with a reputed builder like Prestige, Sobha, Mantri, DLF etc. Construction quality can vary a lot and can give you a lot of headache. As I mentioned in option #1, there are no disclosures from sellers here. For ex, it could be that the bathroom roof is leaking and the seller is not able to get it fixed from the owner who stays above him or there might be some issues with the home owners association etc. Do get the meeting minutes from the association before you make the buy decision. Also, try to get in-touch with somebody who is living there and get feedback. However, you pay a premium for this option - compared to buying a unit pre-construction, this could offset you by 10-20 lakhs, depending on the size of the unit.
Option #6: Booking an apartment in a upcoming project
If you have time, this is a better option than #5 - this will save some money for you and you will have some customization options as well. The wait could be easily in the range of 2 years but you could get an unit closer to work location. You could possibly rent an apartment unit until construction is complete and then make the move. Here also, go with a reputed builder. Many of the large projects can run into hurdles and may stop work, delay the projects etc.
See my related posts:
http://r2idiaries.blogspot.in/2013/01/bangalore-real-estate-should-i-invest.html
http://r2idiaries.blogspot.in/2013/01/investing-in-bangalore-real-estate.html
http://r2idiaries.blogspot.in/2013/01/investing-in-bangalore-real-estate_24.html
You pretty much covered all the options and have been spot on. I have worked in blore and went through buying a plot and an apartment and given my experience i would like to add a point here. You seemed to have preferred Option#5 to Option#6 which i would not agree. I went by Option#6 with a reputed builder (Prestige). I biggest disadvantage is the undeterministic timelines. Even if the builder promises 3 years, it might be 5 years in reality and with the floating interest rates, it would be a double whammy if RBI plays the devil. Another issue is that the final delivery could be different than the spec provided pre-construction (It hapenned in our case). The layout of the complex might not be as rosy as it has been sold to you. Option#5 is "You buy what you see" and you buy it immediately in a deterministic manner. I am sure with US experience we understand the importance of determinism, even though it comes at 10-20% premium.
ReplyDelete@Raj - Thanks for your comment. I guess you meant "You seemed to have preferred Option#6 to Option#5". Agree with you some extent that Option #5 is deterministic and you can afford to do it, could avoid the headache of getting the house built (or dealing with builders).
ReplyDeleteHowever, having seen the mess BBMP has created in Bangalore, with option #5, you don't know what you are getting into, especially constructed houses (versus an apartment). It is a real mess as far as ownership of land is concerned, thanks to BBMP. You never know what claims will come up and the paper work system is plain bad. If R2I is a definite target, pre-planning of option #6 can save you some money and you will have something ready to move in on R2I.