With some interesting comments from our readers in the last post, thought I’ll do one more post in this series. This being primarily to identify situations where apartments are better than independent houses purely on an investment basis.

Anyone who has read part 3 & part 4 would know in which direction my views lie. But if I have learned anything in life, it is that there is an exception to every rule and a negative to every positive and vice versa and inside out and forward backward. That’s why the world works and remains interesting to us. To cut short on the philosophy front and getting to the point - not all independent houses are necessarily superior. The ‘location’ matters a tremendous amount.

If you go and buy a villa/bungalow in a village/small town thinking it is a better investment, I am sorry!! You can wait till elephants roost on trees and relatively nothing would have changed on the price front for your villa. Real estate price increases is largely centred around urban centres and will continue to be so. Only exception I know of is Kerala where land prices have increased tremendously even in villages. The reason is unique to it - NRI Keralites are treating the entire state as a retirement home.

One of the good things when you buy an apartment is that you are naturally protected against the foolishness of buying something in a remote corner of the country. The apartment builders who are sinking in their money would have ensured that the location is relatively alright and ripe for future urbanisations. And the degree to which a locality gets urbanised is what will eventually determine the future value of homes in that area. When I say urbanised, I don’t mean noisy-polluted streets; rather that it is an area of job creation so that people will immigrate to it than emigrate from it.

 So, to sum up the investment theme on homes:

If you are an average joe who doesn’t want think too much but want a good investment that is sure to appreciate, shut your eyes and buy an apartment in any of the top Indian cities. You will not regret it.

If you think you are smarter than the average guy and feel that you have what it takes to make indpendent decisions involving relatively large sums of money, buy a villa near a locality that you judge to be ripe for urbanisation. Reward is more if urbanisation happens; but if your judgement is wrong, prices can stay flat for upwards of 10 years..

Probably Related Post(s)

• Independent house vs. apartment - part 4
• Land now being ‘coldsold’ over phones !!
• Best Indian city for Real Estate investments - 2

While I was drafting the second part of the piece on apartments vs. independent houses, I happened to go through the archives of Aavaas, partly to see if there had been any relevant posts about this topic in the past. Well, what do you know, I found two separate posts made by Vivek and Karthik. Both were made last year, so please excuse me for missing them in my first post. Check out what Karthik has to say here and you can read Vivek’s views on the topic here.

So to summarise where we were yesterday, apartments are becoming popular in Indian cities despite the fact that they are not considered the best option in other parts of the world. One major reason for the increasing popularity of apartments is the difficulty of land transactions in India and its associated maintenance later on. Not to speak of the problems in constructing a brand new building in the middle of a major city.

One other aspect which is unique to India, is our extremely poor infrastrucure in terms of roads, power, water, parks, public transportation etc. In other countries where the infrastructure is relatively good, they have everything to gain by living in an independent house; but in India, our poor public infra forces those who can afford it, to live in islands of affluence - represented in today’s townships & apartment complexes.

I have just one problem with townships.  Most of them are too far away from the city. So while they solve all infra problems that are internal, they actually exacerbate the transportation issue!! And about those ads that say townships will have schools within their premises, all I can say is, they don’t have a clue what it takes to build an school. Maybe I’ll write a whole separate post on this side issue later on

All things considered, from a pure live-ability standpoint in the larger Indian cities, apartments score over independent houses for ordinary people (especially non-natives). Please read Vivek & Karthik’s posts also for more on the subject. They talk a lot more about issues like privacy &  security which are critical.

However, from an ownership perspective the ranking is reverse; an independent house being a better asset than an apartment. Will adress that in a later post.

Probably Related Post(s)

• Independent house vs. apartment
• Choosing an apartment or flat in India - Pros and Cons

Introduction

Independent Homes are increasingly becoming a thing of dreams in metros. Flats are the norm and even they cost anywhere between 20 lakhs to 1 crore or more for a 1000 sq.ft 2 bedroom flat in densely populated cities like Chennai.

Two Bedroom Flats:

A two bedroom flat essentially has a minuscule kitchen, a decently spacious hall/drawing room, two bedrooms (of which one is supposed to be a master bedroom and the other is much smaller), a common toilet/bath and an attached bathroom. So if you wanted to build a dream house where you dreamed of having a separate library or perhaps a movie theatre or even a home gym for that matter, very little can be done about it. Or, is that really the case?

Three Bed Room Flats:

Buying a three bedroom flat is the instant solution we think of. The third bedroom can be converted into any of the above specified rooms. Or you can use it as a store room. (Sometimes the third bathroom is converted into a store room.) However, even this is not the best of solutions. What if I wanted a library and a movie theatre? Well, yes it is a luxury in homes, but if you can afford it, then there is nothing wrong with it.

Two Bedroom Houses x2:

In my opinion, if you always had a dream house I mind and want a house where you can plan and put things the way you want, you should go for 2 two bedroom flats put together. Don’t mistake Two Bedroom Flats x2 idea with a four bedroom house. (If ever builders build it in the first place.) Because, in this case, not only will you have 4 bedrooms,  but also two halls, two kitchens , four toilets and maybe up to 4 balconies.

So if you are, say a family of four, then you can utilize the space as outlined below:

• Two bedrooms retained as such. Choose the two largest bedrooms with attached bathrooms for bedrooms.

• One of the smaller bedrooms changed into a Library with space enough for book racks to hold all your books and maybe a table or two. One, say for writing and maybe one for your computer too. You can also have a chest of drawers to keep your important documents.

• The other small bedroom can be changed into a Guest bedroom if you expect guests once in a while. (You can always use it as and when you please.)

• One of the halls can be converted into that theatre I was talking about. So, naturally you put all your sound equipment, TV…etc here. If it’s bigger than you want it to be, maybe you can accommodate the home gym in too.

• Use the other hall as a Drawing room where you can entertain guests. This will also have the attached dining room.

• One of the kitchens is used as a kitchen itself. (Close to the dining hall)

• The other kitchen can be either converted into a Store Room or a Pooja room for the religious.

Some Figures I thought up:

01- Doors face to face

This is not very desirable as you will have to cross the corridor every time you want to move form one room to another. If the Homes are L shaped as shown in Fig, then it’s probably alright.

02- Adjacent houses

This is a nice idea as long as they share a common wall which can be broken (or not built in the first place) to make way for the common door.

03- Down and Above

Well, this might seem like fiction, but I have seen houses like this. (I mean within apartments. Otherwise, it’s pretty commonplace) What you do is you buy houses on one floor and one above or below it. Then have a staircase running from one house to another.

*-You will have to excuse the amateurish figures. I am not an architect. I hope the figures are good enough to get the ideas across.

Some Photographs of staircases are shown below

 (source: here )

 (source: here)

 (source: here )

A Sprial Staircase saves a lot of space, but is more difficult to take. A normal staircase on the other hand takes a lot more floor space (on both floors), but at least it’s safer. With a bit of planning, you could store things under the staircase.

A Few More Tips:

• With a bit more planning, you can make the kitchen bigger or customize things the way you want.
• I you can purchase 2 Two Bedroom Houses for less than 40 lakhs and can afford the same, in a decent residential area, it’s a steal.
• Also, in case you are going to rent the house, too many structural changes won’t do. (At least if you are expecting to put two tenants in.)
• If you are planning to have 2 flats, then it’s probably a good idea to talk to the builders well in advance. You don’t want to be modifying stuff after it has been built.
• There is no harm in having two doors and door numbers. (If it’s legally allowed) But whether it is necessary, only you can decide.

I did see a house of this sort in Coimbatore some 6 years back and I was amazed at how wonderful it was. It cost some 20 lakhs back then.

If any of our readers do have 2 x two bedroom  houses as mentioned above, please do let us know of your experience.

Probably Related Post(s)

• Some Kitchen design tips - Thanks Bryan
• Apron - A recommended kitchen accessory
• Careeba Comfort - Bath tub from Parryware

Price of houses is a topic that is on most of our minds, at least with those of us who have begun to earn our living. It is the one area where we will end up spending the largest fraction of our hard earned income. Indeed the thought whether it really deserves that much expense may not cross our minds; or if it does, it is quickly brushed aside by the overwhelming evidence we see around us, in that our friends and colleagues are buying houses at similar or even higher rates.

In this post and a few following posts, we will attempt to look at housing industry in general  in India, across the world, the prominent trends that are in place, the pitfalls to watch out for, how to value houses etc. Attempt will be to analyse dispassionately, with a blind eye on prevailing rates and their seeming permanence. It should be a learning journey for us as well as you.

For starters, let us look at how much monetary value we should place on a house. From a fundamental perspective, the value of a house will never exceed the income you could generate from it. In other words, what is the total rental income that a house can give over its lifetime? Get that figure and adjust it for inflation in rupee value and you should have your house valued pretty neatly.

The trouble of course arises in being able to forecast accurately the rental rates in future. In fast growing urban areas, rents can double in a few short years; while in small towns the growth in rates could be almost non-existent. You will realize that this is very similar to how we value stocks of companies in the share market. And similar to that, houses should also have Price to Earnings ratio if you ask me.

With our dear Sensex now trading at above 20 PE, what are our houses trading at? Any ideas?

Probably Related Post(s)

• House prices finally on the way down?
• Property valuation - Price vs. Value

Thought it will be interesting to cover the house being constructed in Mumbai’s Altamount Road by the world’s richest man – Mukesh Ambani. Yep, he’s officially the richest now with the skyrocketing share prices of RIL.

The house (called Antilla) is being valued at Rupees 4000 crores and will be 173 metres tall. Normally that is the equivalent of a 60 storeyed tower, but in this case each floor is more than twice the height of a normal floor, with the result that the building will only have 27 floors when completed. Given the prevailing state of skyscrapers in Mumbai, this building will be more than twice as tall as the earlier tallest buiilding. The view from the top will be breathtaking, no doubt.

Some other absurd facts about this ‘house’..

1. 3 helipads on top. Mumbai corporation has not given permission for making this operational yet.
2. Hanging gardens within the structure
3. Swimming pool within the structure
4. A two storey Health centre
5. Parking space for 168 cars (6 floors). I initially thought that meant there will be a mini office in the building but apparently that is not the case. All these cars will belong to Mukesh Ambani! Just in case you are interested, he drives a 5 crore Maybach now.
6. A floor exclusively for servicing these automobiles within the building.
7. A floor for Home theatre – sitting capacity of 50

Most absurd of all, the house will have a staff of 600 (sic) to do the maintenance activities. That gives a ratio of 1:100 for people living in the house and those who are paid to take care of it. The six lucky (?) ones are the man himself, his wife, his 3 children and his mother Kokilaben. The family will be moving in from their old home ‘Sea Wind’ which was a 14 floor building at Cuffe Parade.

In fairness, Mukesh bought the property in 2002. So he has not spent anywhere close to the $1 billion people are now valuing the property at. And it is not just him, plenty of other rich tycoons have indulged in their residences. Two people who immediately come to mind are Mittal & Gates.

UK-based steel tycoon Lakshmi Mittal (he is still an Indian citizen though) bought the most expensive house in London last year, paying £60m for a place in Kensington Palace Gardens.Microsoft founder Bill Gates had his house built as technology showpiece several years back. The house is reputed to have cost upwards of $100 million. I will write about this particular property sometime in the future. It is much more interesting than the Ambani house, because Gates tried to implement many new, yet to be proven technologies in his blueprint.

Probably Related Post(s)

• Antilla - Ambani Home: Some Pictures
• Rashtrapati Bhavan - Most expensive home in India
• Elecrama 2008 - Upcoming Exhibition | Mumbai