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Land/flat hunt turns quite a challenge

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It appears I can write a book on how to hunt for a property in Bangalore city – something we (my parents and I) have been hunting for the last 2 years – almost. It just got more complicated after all my previous posts on this very topic. I can vouch that Bangalore is definitely in a real estate bubble – how long would it last is not something I can speculate though! Wish I had a crystal ball to gaze at though!

http://www.propertydiscovery.com/newareas.php (Source: Propertydiscovery.com).

https://ecofin.wordpress.com/2007/08/19/land-hunt-in-bangalore-gets-worse/

Every weekend (with the arrival of Friday, its time to dig into the classifieds page on the Times of India and Deccan Herald) we have tuned our routine to hunting for this all elusive thing called an empty piece of land or a land with a house on top of it or just simply – a flat that is affordable.

Think about this for starters. In the last 18 months alone,  we must have personally seen at least 30-50 apartment complexes (large well renowed builders and small-medium builders) with no luck thus far to get that deal of the decade.

Coming to the house front, well, its not too far behind either.

We must have been to at least 3-4 houses every weekend (that goes with the concept of going for land + the house).

In most cases we found either the pricing too steep (1.2 crores and upwards) or the house just not being worth it! I wonder which architects have designed those houses and am even more surprised if those architects are still in business!

Reason being most of those houses are so badly constructed that even a novice architect worth his/her salt would do a job better than what we have seen on some of those houses.

Think about this for some examples. No lighting at all in some houses. Cramped floor plans – they claim they have 3 BHK or 4 BHK but in reality its just a room of size less than the size of a bed – wonder how one can fit in beds into such so called ‘Bed rooms’!

Some of the others we have seen are just terrible architectural show pieces – glam from the outside but pathetic on the inside. If one were to consider the house value over a property in a good neighbourhood is worthless and one chooses to simply demolish that house and reconstruct a new house, be prepared to add another Rs. 20 lacs to your cash outgo – that is the minimum cost of a decent G + 1 floor house – for brand new construction. Some houses we have seen have the pooja room right next to the bathroom! Some of them are shown to us by real estate agents and these chaps are really called “brokers” possibly because they are ‘broke’. Just kidding but am highlighting that though they claim they have done research etc. they don’t even know ABC’s of what that area value property is worth – forget the generic values, they don’t even know the value of the property they are showing at that moment. One chap one fine Sunday evening took us around Jayanagar and JP Nagar hoping to end our elusive search for a decent house. He started with a dingy house belonging to an IT company Manager. The sticker price – Rs. 1.2 crores for a pathetically built 30*40 house duplex with absolutely no lighting! Then he took us to another one in the neighbourhood claiming it would exceed all our expectations but after 3 rounds of the same area, he came to the conclusion that he simply does not know where the house is! We said – ok what next? He said “I have a Rs. 1 crore land in Jayanagar 4th block and its a 50*80 site right next to Coffee day, lets go there. You are the first folks I am showing this land to, the owner handed this to me just today to sell it”! So, off we went.

First off, the land is South facing – for the orthodox ones such as us – this itself was a negative.

There was more negative news. It appears he miscalculated and the actual price being quoted by the owner was actually Rs. 6000 per sq. ft. which works out to be upwards of Rs. 2.4 crores while this agent lied to us or was foolish enough to assume that maths is being reinvented by him! After all – who is AryaBhatta (http://ezinearticles.com/?Aryabhatta,-The-Indian-Mathematician&id=580066, http://en.wikipedia.org/wiki/Aryabhata) compared to him – its just a couple of misplaced zeroes and crores – after all! 🙂 Who is Srinivas Ramanujam (http://en.wikipedia.org/wiki/Srinivasa_Ramanujan) compared to him? He knows better! Sorry, I am being plain sarcastic towards that pathetic real estate broker who I bet – will never be able to sell a single property in his entire life! He was just off the mark by Rs. 1.5 crores. Does he know how much hardwork it takes to net that kind of income? Its probably most people’s lifetime income and he spoke of it quite loosely which I did not appreciate at all.

I was shocked at the callousness of this so called “Broker”. It does not end there.

Ok, off we went to a local bank to meet a cooperative bank Manager. He told us quite unabashedly that its foolishness to go in for a condo or a flat – which is a depreciating asset while we should go in for a house! Surprise surprise – as though we did not know this obvious thing! 🙂

Billions of blue blistering barnacles!

Anyway, he sounded quite positive and said someone had come upto him to sell a house at JP Nagar near the Brigade Millenium and off we went to that place. The road there was like going through a cross country racing circuit for dirt bikes! The house was pathetic too.

This is where we stand.

Oh by the way, a hot update. We just chanced upon an ad given by the Brigade group on the Brigade Petunia. I promptly called the executive as the area was Jayanagar/BSK and whoa! The price quoted was just Rs. 6100 per sq. ft. therefore, the flat was worth only Rs. 2.5 crores!

There is one more hot update just out of the closet. We came across Brigade Palm Springs near JP Nagar 7th phase near the Brigade Millenium (we had crossed that road yesterday) and its a good locality. The sticker price here is about Rs. 3750 per sq. ft. and flats are available for about 1600-1850 sq. ft. All in all – the sticker price would be about Rs. 75 lacs including all frills (regn. stamp, duty etc.) Some of my folks are sold on this, some arn’t – its a tough job convincing everyone. Lets see how this goes.

Update: 12th October 2007

As it turned out, the Brigade Palm springs floor plan wasn’t great – the entrance leads one to a dining! So, we are back looking at our other options very closely. Meanwhile, we also did two property hunts over the weekdays at JPNagar (main road) for a sticker price of Rs. 1.7 crores (for a 40*60) and at Girinagar (near BSK III stage) for a 30*40 2 storeyed house for Rs. 75 lacs).

My friends did tell me about magicbricks.com and some other property portals. I am currently researching those to see if they are any better. Brokers are smart. Most ads’ posted there are by them and not by genuine sellers. These guys pocket 2% commission on such sales.

Last year, this is what had happened:

We went property hunting again to another place on 31st Dec 2006 that a better quality real estate agent showed us at Bannerghatta road (next to IIM Bangalore and 1/2 km from Honeywell).
 
Cost of property: Rs. 2 crores (As quoted by our estate agent – we did our independent research from other independent sources to verify if the cost of property indeed in that area is that amount and it appears it is about Rs. 2500- Rs. 3000 per sq. ft that works out to be Rs. 1.4 crores to Rs. 2 crores depending on exact location in/around B’ghatta road.
 
The size of property is 83 x 93 = about 7719 sq. ft. in all.
 
The agent had a good investment idea and it sounded good on paper but tough to meet in practice.
 
He planned to charge a 2% commission on the entire deal and wished to strike a liaison with a developer who would build 40 flats there in that site and then his idea was that we get to split the flats as 20-20 (20 with developer and 20 flats with us). Furthermore, the agent’s logic was that each of us investors gets to keep 4 flats each. Out of this, we retain one, sell one and give the other two for rent at Rs. 30K per month on each. This sounded far fetched since the going rental prices then (Dec 2006) for flats right on B’ghatta road was only about Rs. 8K per month (max.). Still, the agent’s logic was that we earned money on that investment as a whole provided we are able to gather that kind of huge money.
 
We tried to rope in 5 parties but it never worked out. We were not sure if that would have worked out since for some of us to get a bank loan for Rs. 40 – 50 lacs – it wasn’t going to be easy going as with my previous experiences at a Palace Orchard property I had seen earlier in 2006 (April 2006) and a ACS Vasundhara building at BSK II Stage).

Whatever happens, it appears we are learning valuable lessons from our due diligence stage in various property deals – I have learnt from the last so many broken down deals so I am not going to give up just as yet!

Do share your experiences too!

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Written by Naveen Athresh

October 1, 2007 at 2:13 pm

5 Responses

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  1. Hi, my name is Nagendran from Singapore. Your 2007 article was very interesting. I hope you have found something good by now. I am just starting my hunt for a good, big sized apartment for our eventual return to India. Locality is same as yours- Jayanager, JP nagar, Banerghetta road etc. Any ideas, tips etc based on current market. Any good projects you know of? Specifically any feedback on Brigade Petunia which has been recommended by an agent.
    Thanks,
    Nagendran

    Nagendan

    March 5, 2009 at 2:41 pm

  2. Hi

    Any updates on Brigade Palmsprings?

    Thanks!

    JMS

    April 7, 2009 at 2:55 pm

  3. how is palmsprings and elita. i need to take decisions. any pointers will be of immense help. u can reach me directly thru email. thanks.

    rakhee

    April 13, 2009 at 2:53 pm

    • I live in Elita on rent and am also hunting for own apartment. I would like to say “Stay away from Elita” . It’s such a shoddy construction and inferior fittings.

      Tobby

      December 10, 2009 at 4:20 pm

      • Hi

        I agree. Elita is shoddy. Not sure of Brigade Palmsprings (it is too pricy though) Am also hunting for apartments in and around B’ghatta road, J P Nagar. By the way, I have a 2160 sqft plot (36*60) on Bannerghatta Road, very close to main road, near reliance mart/Mantri paradise junction. I want to dispose this off and buy an apartment. Pls suggest some good ones. My bud is around 60L and need a 3BHK.

        H S Rajashree

        September 20, 2010 at 2:35 pm


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