Jan 4th 2013 was the day Tina and I became owners of our own homes for the first time. I was 30 years and a few months old when I wrote the last check to the bank. I felt it was the greatest achievement in financial terms for us so far. When the opportunity arose two years back, it presented to me a chance to put a tick next to one of my financial goals at that time - A home to call our own with no debts outstanding. I saw it more as a place to live, an insurance for any loss of employment in the US, and as a necessary asset. We tightened our purse string and focused most of our fiscal energies on paying off the loan as fast as we could. With interest rates at 11.75%, I had few reasons to draw out the loan. I saw every cent paid in interest as an additional cost. This is in contrast with the mindset in the US, where borrowed money is so cheap, that mortgages are seen as leveraged financial instruments.
The house we bought is not new, the construction is almost 20 years old. However, since the facade is of stone, the external appearance is not all that sensitive to age. The other thing going for the property is that it is inside a 540 unit enclave sealed off from the neighboring Kammanhalli. It is very green with tree covered roads, a green patch near the water tower and no thoroughfare allowed essentially making it orders of magnitude greener and quieter than the surrounding areas. The other reason we bought the place was because of the enclosed 1300 sq feet of terrace space. This affords tremendous opportunity to make a nice outdoor living space, and a lot of people with units like ours have done exactly that. This kind of outdoor seating is simply impossible to find in apartment living almost anywhere in India.
Comparing the retail environment of the neighboring areas from 5 years ago, I find that there has been an amazing and very visible transformation. The kind of brands that have opened shop are moving towards the mid-to-high range. This has also improved the desirability of the neighborhood. I am told that the house now sells at 33% more than what I paid for it, which in two years in fairly staggering.
I discourage myself from seeing the buy as a investment, but more as a needed asset, but at the same time I do hope things will continue well for JVV over the next few years.
Paying off the house has also led to a strange dilemma. I have now no financial strategy and very little other liquid assets. I will have to learn a lot more about other asset classes and form a new strategy for the next 2-3 years. So far I guess, I will spread any savings into FDs / index funds-ETFs / with some gold exposure. Wish us luck!
The house we bought is not new, the construction is almost 20 years old. However, since the facade is of stone, the external appearance is not all that sensitive to age. The other thing going for the property is that it is inside a 540 unit enclave sealed off from the neighboring Kammanhalli. It is very green with tree covered roads, a green patch near the water tower and no thoroughfare allowed essentially making it orders of magnitude greener and quieter than the surrounding areas. The other reason we bought the place was because of the enclosed 1300 sq feet of terrace space. This affords tremendous opportunity to make a nice outdoor living space, and a lot of people with units like ours have done exactly that. This kind of outdoor seating is simply impossible to find in apartment living almost anywhere in India.
Comparing the retail environment of the neighboring areas from 5 years ago, I find that there has been an amazing and very visible transformation. The kind of brands that have opened shop are moving towards the mid-to-high range. This has also improved the desirability of the neighborhood. I am told that the house now sells at 33% more than what I paid for it, which in two years in fairly staggering.
I discourage myself from seeing the buy as a investment, but more as a needed asset, but at the same time I do hope things will continue well for JVV over the next few years.
Paying off the house has also led to a strange dilemma. I have now no financial strategy and very little other liquid assets. I will have to learn a lot more about other asset classes and form a new strategy for the next 2-3 years. So far I guess, I will spread any savings into FDs / index funds-ETFs / with some gold exposure. Wish us luck!
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