Which is better in Bangalore – Owning a house through a Bank loan or Staying in a Rented House?

I don’t want to sound overly pessimistic, but I would advise against buying a builder flat in Bangalore. Buying a plot of land is fine, but apartments are one of the biggest scams going on in cities like Bangalore. It is mainly because of the Indian mentality of owning a house as soon as you get some spare cash or increased salary. Let me list out some of the reasons why buying a flat in Bangalore is not worth your investment:

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Sewage Problem: The BBMP rules state that any apartment complex with more than 20 flats should have its own sewage management system. Big builders will sell you flats with sewage systems that don’t really work. When it rains, the sewage water seeps into the car park and common areas. It will be the breeding ground for dengue, malaria, etc and you will be able to do nothing about it. Water Problem: Bangalore’s water problems are well known to most people. Buying any new, fancily advertised property will mean that you do not get Cauvery water which is in very short supply. Water will be provided through bore well which will need to be deepened each year. But even bore well will one day run out of water. At that point of time, the value of these expensive flats will come crashing down.

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Useless Facilities: Major builders sell their apartment complexes with facilities like swimming pool, badminton court, banquet hall, gym, etc. If you are a working professional you will almost never use these facilities because you won’t have time. Your monthly maintenance will be around Rs.8000–9000 for these facilities which you don’t even use. Once you get old, you will have no energy left to use these facilities either. By then, most of these so called facilities would have fallen into disrepair.

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Zero Honesty: My wife and I have looked at around 15 apartments in this city. Not even one builder we met had any honesty in them. Everyone tries to cheat you. The same sales guy who will talk really sweet will not even acknowledge your presence once you have paid the money. One of the biggest scams is ‘Built Up Area vs Carpet Area’. It is funny how even educated people fall for this. I have a laser measurement tool which I carried with me while looking at apartments. The carpet area is almost never as advertised. In some places there was a glaring 40% mismatch between what the builder advertised and what was actually there! But people still go into debt buying these flats. Builder-Banker Nexus: The builders and bankers collaborate with each other to cheat you. I once saw a flat which was for 46 lakhs INR. The bank sales manager called me and offered to take me out for dinner LOL! I didn’t go, but met him at home any ways. After a lot of beating around the bush, he gave me a loan option for 30 years. In that period I would end up paying 89 lakhs INR, almost double the value of the flat along with interest. I laughed on his face and asked him to get out. But still, it is shocking how many educated folks screw up their lives with such debt just for the sake of an ‘own home’.

Most of the apartments in Bangalore are sold at highly inflated prices. This is even more true if the builder is some big name with hoardings and TV ads all over the place. In the rare event that you are getting an apartment for a cheap price which is well within your reach, go for it. But never be foolish and get into debt for 20 or 30 years. Pay rent and live lavishly.

Bangalore Flat, rent on flat, bangalore rental flat Source :- Vikas Rai (A Quora User )

tHe sTory telleR

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5 thoughts on “Which is better in Bangalore – Owning a house through a Bank loan or Staying in a Rented House?

  • August 29, 2017 at 3:01 pm
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    1. Sewage Problem: This problem exists but not in every apartment, like mine which doesn’t have a basement parking but stealth parking , STP should be pushed by owners before they take over the apartment , they are ignorant & full of cash which the builders use it for their advantage.
    2. Water Problem: City was not expected to grow double its size in 10 years, which it did & there is not way to suck the water out of earth so yes water problem exists, Kaveri is going to come in the next 5 years in most areas like right now its connected to places where it was not before 2-3 years. RWH is also mandatory and nobody wants to have it , rain is enough to save water for whole year in BLR.
    3.I have all the above facilities & pay 4000 in maintenance, it will be much lower if my apartment was a high rise, so stop bluffing. Buy a no frill apartment if you do not want any facilities , there are enough of those in the city.
    4.Scam? well this exists around the world, don’t say you just came out of a village & do not do research before buying so does everyone.
    5.This is illogical comparison, you need to understand economics of home buying, study that and rule applies to anywhere not only Bengaluru.

    Talking about inflated prices, visit Gurugram & Mumbai before talking.
    This is a useless blog

    Reply
    • August 31, 2017 at 9:14 am
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      Agreed with you on every point.

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    • September 5, 2017 at 2:34 pm
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      Agree with all your points. With all these issues, why do everyone prefer Bangalore for stay???

      Reply
  • August 29, 2017 at 3:05 pm
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    Its BENGALURU & why haven’t u completed the blog with whats better rented or owned?

    Reply
  • August 30, 2017 at 2:36 pm
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    Sewage water is not a problem everywhere. It depends on apartments and builders. I stay in Sobha Oman Topaz Sarjapur road, which is a 15+ years old apartment and not a single drop will sip into the basement/car park. Many apartments such as the ones from SNN does not even have basement car parking. Enture ground floor is for parking. Same is the case with Rank apartments in Billekahalli and many others. Many builders openly indicate STP in their brochure and you can always inquire the same. So this is not an issue unless you go for a 46 lakh 2 bhk apartment from an unknown builder.

    Rain water harvesting is present in many apartments now. Even a B category builder like Disha (Disha Central Park for example) has rain water harvesting. Again, if you check out 15 apartment I am sure you will come across at least 7 or 8 where rain water harvesting is there.

    Water is big issue yes. Especially in areas such as Harluru which is seeing many very large complex and is resulting in quick depletion of water bed. But the solution to this is spend 10 lakh more and take a home in an area where cauvery connection is present. E.g. Ranka colony road, BTM, Yemalur (prestife kew gardens), etc. etc.

    Maitenance will never go more than 4 or 4.5k unless you stay in a luxury apartment with all facilities but less than 40 or 50 flats. Work out the economics, as the number of flats increase the maintenance will go down even if facilities and extra space increases. Aahika apartment with 69 flats have a maintenance of 4.5k. BSR Guitaaar with around 250 flats has a maintenance of 3 or 3.5k with same facilities. So max it can go is 4.5 or 5 maybe.

    Regarding paying back 89 lakhs. Off course that will happen if take a 30 years loan. I mean who on earth will take a 30 year loan!!!!! Anyways, this is simply called interest which you pay for education loan, car loan and every other thing. You don’t want to pay high interest go for a high down payment with low repayment period (e.g. 35% payment with 10 year repayment).

    Regarding inflated prices, all cities are the same. You will be surprised to know that even in a city like Kolkata where job situation is pathetic has a very high prpoerty price. A decent 3 bhk in a large complex in a decent area will start from 90 lakhs. And something like South City apartments will be easily 1 crore plus. So the situation is same everywhere. You don’t want to pay high price then shift to the outer areas or smaller cities. But please don’t say Bangalore is the only city with high/inflated price.

    Reply

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