Money Saving with Real Estate

Money Saving with Real Estate
  • Opening Intro -

    Money saving with real estate could sound like a dichotomy.

    Developing or owning real estate is money intensive and demands considerable investment in terms of time also.


For a new owner building a house could be uncontrollably expensive without adequate information.

With reliable information and proper resources, constructing a house or developing a property could be money saving. You need to keep yourself updated with latest information on property rates, price of construction materials, borrowing rate of interest in case of financing, registration fees, and taxes. These are the cost components of a new construction.

Even in Mumbai, where real estate price is unusually high, these bits of information could help you significantly in saving money with new property development.

Property (Lot) rates

Land rates constitute almost 60 percent of the total cost of a property. This rate depends on the area; availability of civic amenities like water supply, drainage system, power; closeness to railway station, bus stand, schools and hospitals. Every locality depending on these factors demands a price.

There are certain areas like Nariman Point, which are essentially commercial and others like Prabhadevi that are residential. Luxury apartments Prabhadevi are typical examples of Mumbai accommodation for this city’s residents.

While purchasing vacant plots or completed buildings you should take a correct valuation from land registrar’s office. A land registrar would give you the exact official cost of a plot or a building in any location.

Cost of construction

If land makes up 60 percent of the cost of a real estate, then cost of construction including material and manpower would account for about 32 percent. Innumerable items are needed for construction of a cement structure: sand, cement, iron rods, stone chips, tiles, paint, bathroom fittings, wiring, kitchen fittings and so on.

In a place like Mumbai where 2/3 BHK Prabhadevi luxury apartments could cost crores of rupees, construction materials account for a substantial portion of this cost.

Upcoming residential projects tread a very cautious path so that buyers never feel cheated. Construction materials should always be bought from reliable suppliers for authentic products at a fair price. If materials could be bought from reliable sources at reasonable prices then the money spent could be controlled and overspending avoided.


Financing is closely related to housing and real estate. A large percentage of real estate buying in through third party financing. In addition to commercial banks, there are several companies that finance building constructions and buying. There are various lending programs and they usually extend to a period of up to 25-30 years.

Finance terms can vary and depend on down payment made, and term of repayment. For higher down payments the rate of interest is lower and vice versa. Home loans are usually repayable within 25-30 years.

Under normal circumstances a down payment of 20 percent of the total valuation of your property is required to be paid. The balance 80 percent is payable using an amortized formula (equated monthly installments). Some institutions charge a flat interest rate on finance amount, while others charge adjustable rates.

Housing finance corporations normally provide information through their websites and location offices. Developers often tie up with financiers for benefiting buyers.  2015 guide on ongoing residential projects in Mumbai published by real estate developers is immensely helpful.


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