Buying your dream home is a once in a lifetime task and a very significant decision. People, especially those with nuclear families, find it difficult to make up their minds about whether they should buy a 2 BHK or a 3 BHK. There are a lot of factors to consider before you put your hard-earned money into purchasing a home. We will consider all of those factors here and help you make a prudent choice.
Budget of your dream Home
The first thing to consider before buying your home is the amount of money you are willing to spend. It is a good rule of thumb to not spend more than 5 times your annual income on a house. If the cost of the house whether 3 BHK or 2 BHK, is less than 5 times your annual income, then only you should buy it. Not only the price of a house, but also the size varies from city to city and location to location. A 3BHK in a metropolis like Mumbai may be smaller than a 2 BHK in Gurgaon. So it is better to look for the carpet area of the flat than a classification of 2 BHK or 3 BHK and then assess your budget according to your preferred location.
Size of the Family
The next thing you should consider is the size of the family. Generally, a 2 BHK is enough for a family of three, but if you have your parents staying with you or they visit often, then it is better to look for a 3 BHK. Also, it is better to future-proof your house in case the family expands in size later on. Again, the carpet area is a better metric than the number of rooms in a flat. Some builders claim flats to be 3 BHKs but their carpet area may be less than a 2 BHK flat. So it is better to invest with reputed builders like Omaxe, which along with great carpet areas and various room configurations, has a legacy of 35 years in real estate. The builder offers a variety of product mixes from which to choose and has great 2 BHK and 3 BHK options.
Inflation is a general rise in the price of a basket of goods and commodities. Inflation rates affect real estate prices too as the cost of construction materials like cement and steel also inflates. This will make buying flats costlier as time passes. So it is better to buy your flat when the inflation rates are low or range around 2-3%.
If you are taking out a loan to buy your flat, it is better to get a fixed interest rate than a floating interest rate during times of high and rising inflation. It will save you from the vagaries of fluctuating inflation, though you will pay more when the interest rates in the market go down. Rising inflation is better for borrowers because the amount of money that one pays is less in actual value. And if the inflation rate increases more than the interest rates, then what you are actually paying is less than the principal amount.
We can understand this by a very simple example. Suppose you took out a loan for 100 rupees at a 7% annual interest rate. Then at the end of the year, you will pay a sum of Rs 107. But suppose the inflation rate increases to 14%, so a sum of Rs 114 will have the same value as Rs 100. Since you are paying Rs 107 at the end of the year, you are paying less than the principal amount in actual value.
Loan Amount is another factor that you have to consider before buying a new home. A loan of longer tenure will help you pay monthly instalments that will be relatively smaller, but the cumulative amount that you will have paid at the end of your loan tenure will be larger. So it is better to do a down payment that is substantial but without being a burden in the short term.
Fixed interest rates will also help fight the inflationary market. It is better to find banks or companies that adjust inflation rates over the long term. You should enter the buying market when the inflation rate is low and try to exit when the inflation is higher than the interest rate so that you end up paying a loan that is less in real value. You can exit the market early by intermittently paying small lump sum amounts.
One should keep in mind that the banks will not give you a loan if the EMI is greater than 45 to 50% of your monthly income. So you need to plan the budget of your house accordingly. It is also advisable to keep your credit score above 750 so that you can easily get approval for your loan.
Here is a checklist of certain things associated with the property that you need to look for.
- Location- The location of the property is as important as, if not more than, the size of the property. The location can also be based on the personal choices of the buyer. Some prefer the hustle and bustle of the city, while some prefer peace and natural scenery.
- Reputation of builder- Renowned builders, like Omaxe, will maintain the highest standards as they have a legacy to uphold. A reputed builder will ease your buying concerns and make your choice easier.
- Connectivity- A property which enjoys good connectivity will save your time as well as facilitate ease of movement.
- Amenities- The property should have all the amenities like schools, shopping complexes, and hospitals nearby to ease your living.
A 3 BHK has a better resale value than a 2 BHK if ever you decide to resell your flat. But it also depends on a lot of other factors like locality, connectivity, etc. A well-connected area, replete with all the amenities, will always fetch a better resale value even if it has a smaller carpet area.
Maintenance of a flat is one factor which is oft left out of consideration while buying a flat. Maintenance costs are governed by RERA rules. The builder pays the maintenance charges until the buyer takes possession of the flat. After possession, a written agreement is drawn out stipulating the rules of sharing of maintenance charges. So one carefully needs to go through the clauses in the maintenance contract to avoid any hassle later on.
Maintenance charges include charges like service charge, building maintenance charge, parking charge, non- occupancy charge, etc. A 3 BHK flat will always have a higher maintenance charge than a 2 BHK flat. So you need to calculate the average maintenance charge that you are willing to pay for your flat.
Buyer’s nature and Satisfaction
The nature of the buyer and his satisfaction are important considerations in buying a flat. If you are a minimalist by nature and prefer less furniture space or keeping less stuff in your house, then a 2BHK flat will be enough for you. But if you are a maximalist and want everything king size; be it your furniture or your television, then you need a 3 BHK because you will need more space for your ever-increasing stuff. So it boils down to an individual’s personal preferences, whether he prefers a 2 BHK or a 3 BHK.
Now you are ready!
Once you have weighed all the above factors, then you are ready to make an informed choice between a 2 BHK and a 3 BHK flat which will not only make your flat future-proof but also appreciate in value continuously.