Subra…I bought this house for Rs. 42 lakhs about 8 years ago now it is worth Rs. 80 lakhs…It has almost doubled.
So Subra using your Rule of 72…I have got a 9% return..this is fantastic is it not? In the share market I could not have got this much, right?
I said…not so quick my friend…let us see how much you really paid.
Down payment, registration, interiors (not realisable in case of a sale), society entry charges, brokerage, = Rs. 5 lakhs
INTEREST PAID ON THE BORROWED AMOUNT: 18 LAKHS
Total cost = Rs. 65 lakhs.
Today it is worth Rs. 80 lakhs.
So the return is to be calculated on Rs. 65 lakhs…AND NOT ON Rs. 42 (which is what the broker told you when he showed it to you)
Are the returns good?
Frankly does it matter? you are living in it, right?
Your wife and children are happy with the location, right?
Chill man. Just do not be a victim of Innumeracy.
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