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This post is a slight deviation from the pretty pictures of breathtaking homes you often see here. My day job has been all about investment management and financial education, in general. Both finance and interiors, are close to my heart and that is precisely what this post will be about.
If you are in the market for buying a new house, I’m certain you have seen at least a dozen houses, if not more. There are three criteria that we gave utmost importance when looking for homes two years back (in that order):
- Location: where you work, where you stay, and where your kids go to school is of prime importance in a city like Bangalore, or any metro, as one can spend up to 2-4 hours on the roads each day.
- Budget: before deciding on the budget, do some market research. Visit projects of well-known builders so you can be sure of quality to an extent to ascertain what you get what you get, what for what price, at what location, etc. Budget depends on how much you can afford to spend as per your financial health; even a modest 2 BHK in a good location costs over Rs.80 Lakhs these days in most metros.Budget depends on how much you can afford to spend as per your financial health; even a modest 2 BHK in a good location costs over Rs.80 lakhs these days in most metros. Often, even if you can afford the EMI, it is the monster down payment that discourages many to take the plunge. For instance, a home of 1.8 crores may require making a down payment of anywhere between 21 lakhs to 45 lakhs based on the construction status. The norm is 20 percent which can be a big number based on the total cost of the property. Here is what you can do.
- Plan: you either like a home or you don’t. And believe me, you’ll know the minute you enter one that this is the ONE. The dream home.
A dream home is one that fits in all these three basic criteria. Given human nature, this rarely happens. While you can compromise on location and plan, the budget is one thing you cannot and should not compromise. Here are two simple ways to plan and afford your dream home:
- Make your money work for you: this is the best-kept secret that few know. Make the money lying across your bank accounts work for you. I will tell you a story of how a friend got the interiors of her new home done by making idle money work for her in 6 months. She had just sold her home and received a lump sum. No money was due to the builder for six months when the unit would be handed over. She was worried about not budgeting for interiors when planning and confided in me. I advised her to invest the lump sum in liquid funds and short-term mutual funds like the Birla Sun Life Short Term Opportunities Fund. The returns earned helped her in funding the interiors. The moral is don’t let money sit idle in bank accounts after you have parked enough for contingencies.
- One small step at a time: invest a little every month through SIP in some of the best mutual funds. If you are not sure how much to save every month towards your goal of buying a home, use Sabse Important Plan by Birla Sun Life to plan better and smarter.
No dream is out of reach if planned well. Follow this mantra in 2017 to move into your dream home soon.