When to buy a house: now vs later vs never

Buying a house is often an emotional decision and as I have argued before, it makes no sense to use buy vs rent calculators. In this post, I discuss the pros and cons of buying a house as soon as possible vs later vs never. Regardless of what decision we make (or have made) it is important to list all considerations, spend some time on each item and then decide.

Yamini Sood, VP sales of DSP Blackrock argues that buying a house is more important than investing or building wealth as it is an animal instinct in this fantastic post: Home IS where the holy grail is. read more

FAQ: Real Estate Investment Trusts (REIT’s) and Infrastructure Investment Trusts (InvITs)

Here is a ready reckoner on Real Estate Investment Trusts (REIT’s) and Infrastructure Investment Trusts (InvITs) in the form of an FAQ. This covers key information for the layman and is meant to serve as a basic introduction.

FAQ on Real Estate Investment Trusts (REIT’s)

1: What are REITs? It is a mutual fund that invests in real estate.

2: Where can they invest? Commercial real estate only through a special investment vehicle (a 3rd party firm) or directly. read more

Long Term Capital Gains Computation with base year 2001

Budget 2017 has proposed a slew of benefits related to long-term capital gains. The most important is the shift of the base year to be used for long-term capital gains computation for all asset classes. Here is a summary and illustration of long-term capital gains computation with base year 2001.

1: Change in duration for computation of capital gains

Gains from the sale of immovable property (land or building) after a holding period of 2 years will now qualify for long-term capital gains. Earlier this was three years. read more

Budget 2017: Calculate Revised Return from Your Rental Income

The rent received from a house property is treated as income and taxed as per slab. However, certain deductions are eligible for this taxable amount. Budget 2017  had restricted the amount of deduction one can claim. Here is an illustration and a revised real estate returns calculator.

The taxable income is given by:  rent – (loss from house property)

Loss from house property (old rule)

loss from house property = Rental income – (corporation+water/sewage tax) – (standard deduction) – (interest component of home loan) read more

The trouble with rent vs. buy calculations

‘Should I buy a house/apartment now’ or ‘should I continue to stay in a rented accommodation?’  I am sure you would agree that this is a common dilemma faced by many youngsters.

In fact, although there are several decent ‘rent’ vs. ‘buy’ calculators available, I continue to receive requests to make one.  For a variety of reasons, I am not motivated to make one although from a mathematical point of view it is reasonably interesting. read more