Saturday, February 9, 2008

A home within your budget

A home within your budget
Vidyalaxmi, TNN

You may have to live with higher residential prices. After all, in a country where citizens are increasingly flocking to big cities for job opportunities, is there any other way that property prices could go? But then if you are a smart buyer, who is willing to see through the dust, there are opportunities galore to buy that dream house. And yes, that too at an affordable cost.

There is light at the end of the tunnel for home buyers. Old houses in the same locality are available at much cheaper market rates than the newly-constructed ones. So should you toy with the idea of buying an old house? Raj Kumar of Jones Lang Lasalle Meghraj says: “That depends on one’s level of need, one’s paying ability and the condition of the house. While a new house is always a better investment, there are certainly occasional good deals available in older units, too. Units in projects by reputed builders often do have sufficient resale value, especially if they are in good locations. If the unit is in a location that meets the buyer’s need, all necessary conveniences are available in the vicinity and if it is in good condition, buying it makes sense”.

More space

The biggest advantage of going for an old house is that of getting more carpet area. This is primarily because of the low-loading factor in old constructions. Today, most of the residential constructions come with amenities such as clubhouse, gymnasium, swimming pool and all these spaces get loaded into the overall property rates. So, for instance, a new residential house might be a 1,000 sq ft home, giving only 750 square feet of carpet area (33% loading). In case of an old house, you could get probably get 800-850 sq ft.

Spruce up old homes

“Newly-built houses are usually designed keeping in mind the requirements of the existing generation. Be it more attached bathrooms with bedrooms or service area for maid servants, you name it and they have it. In contrast, older houses mostly have provision for only one bathroom, says Dharmesh Thadani, a Mumbai-based interior decorator. Even the modern kitchens are well-equipped with additional plug points and right electrical fittings. But then the big question is to ask about the incremental cost to redo the old house with such state of the art electrical fittings. But....

There are some things though, which can’t be done even if you wish for it. Take for instance, the elevators which some of the old house might not have. This could be an area of concern, especially if there are elderly members in your family. Also, one might have to forego the commonly available amenities. “The new constructions usually have large housing complexes with common facilities such as swimming pool, recreation club/gym, etc. They also have appropriate provisions like a lawn or a park for the children to play in the compound itself, adds Mr Thadani.

Renovation costs and lower resale value

An old house comes at a lesser cost. But one has to discount the renovation cost before zeroing in on one. Used homes tend to deteriorate in overall condition and often require extensive repairs and refurbishing. They have far less resale value than new units, and no home loans are available on them after they have reached a certain age. This further reduces their marketability. They may have flawed titles and pre-existing litigation issues, since the transparency in property deals is only a recently emerging phenomenon in India, says Mr Kumar.

In the end, the choice of whether to go for an old or a new house is an individual decision. Some might want the best amenities and are also willing to pay for it. But if you feel that affordability is pinching you, old homes — (of course, those that have been constructed not more than 10 years ago) could be a good consideration. After all, you get it at a discounted rate — not to mention more space to boot.

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