What is the price of a 20 year old resale apartment in Valmiki Nagar, Tiruvanmiyur, Will old apartments appreciate

Q: I am planning to buy a 20 year old apartment in Seaward Road, Valmiki Nagar, Tiruvanmiyur, Chennai. This is a 4 BHK 2600 Square Feet Dupleix penthouse apartment with an unregistered 350 sft open terrace garden with enjoyment rights. The seller is quoting Rs 9200 / sft for the 2600 sft. The apartment is located close to the beach but does not have a beach / sea view. The UDS (land area) is 1650 square feet.

The apartment complex is run down but the apartment on sale is in good condition with modest interiors. Prevailing prices for new apartments for similar type of apartments with better facilities are around Rs 12000 / sft.

I would like to seek opinion and feedback from experts on the following

1. Is Rs 9000 / sft a good rate to buy a spacious dupleix penthouse as described above in that locality
2. Would there be a market for 20+ year old apartments 5 yrs from now in that locality
3. What could be potential prices for an 20+ year old apartment, 5 years from now in Seaward Road, Tiruvanmiyur that is renovated but lacks the modern bells & whistles

Shall appreciate hearing back from experts on my queries

Krishnan PS, Apartment Resident

13th November 2014

Buying property in Thiruvanmiyur, Chennai

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thiruvanmiyur

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Replies (3)

Hope you got your apartment, please let me know if you have got the apartment, did you face any issue. According to me going for a resale is intelligent choice that too for a 20+ years should be the best choice. My brother had got a 24 yr old apartment recently in saidapet location in a pretty calm area similar to valmiki nagar it was around 7300Rs /sqft. Worth the money. I hope you can negotiate a bit. But it depends if it is an apartment or a independent house. Mine was an apartment. 3 things has to be kept in mind. The current land value of that area, owners documents, lending Bank. SBI should be the best one to choose, they do all the legal checks for past 30 years, if lucky u would get to have even 50 years of documents. Choose your seller wisely, judge if they dont have any discrepancies to sell it. its better to talk with them every week to understand their need and thinking. Hope you had a great deal and happy about what you got. Please let me know your exp if u really got it!

Srikanth,

22nd March 2017

Comment

Thank you all for your feedback, all very valid and very much appreciated. More info below

This apartment wd be for personal use large / growing family reqts. Room sizes are 250 sft and it is not meant to be an investment.
The apartment block is in reasonably good shape but requires renovation, painting, etc
This 20 year old apt with 2600 sft super built up area offers 2100 sft carpet area. To get 2100 sft carpet area in new apt I need to buy a 3000 sft apt costing me Rs 4+ crores in this locality with a much lower UDS as against the pre-negotiation rate of Rs 2.4 Crores for the old apartment. I am happy to forgo new apt features

Do members feel that

1. A re-sale 20 year apartment is a good viable option from an
Potential future valuations Though I do not intend to sell it, but my biggest concern is re-sale interest and valuations
Is Rs 9200 / sft a good price, or what would be a fair price
2. I should not buy this apartment

Appreciate suggestions

Krishnan PS, Apartment Resident

14th November 2014

Comment

Hi Mr Krishnan,
As i told you before , it is not advisable not to buy any property more than 10 years old. Even now a days those who are buying for self use or investment they are not preferring more than 5 years old. Main problem is you have to check technically & legally too.

Venu Gopal, Chennai

28th November 2014

Hi ,
In my point of view, by spending same money if you can buy a fresh one, then why buying resale property i.e 20 years old. It is not like Thiruvanmiyur is running out of best fresh project @of 9200/sq-ft.
So i will suggest that search for some fresh project in that budget. Visit the site , discuss with 2-3 builders & then make your decision.

Pavan kumar, Chennai

28th November 2014

Hi Mr Krishnan,

There are certain challenges that a buyer of a resale flat may face. This could include lack of proper chain of documentation, especially in cases where the property has changed hands more than a couple of times in the past. If the property is over 18-20 years old, it is possible that it was never formally registered in the first place. Registering it at the current point in time would put the onus of paying the stamp duty in arrears on the buyer.

Venu Gopal, Chennai

14th November 2014

Comment

@ Mr Krishnan,

Yes I agreed with Mr Venu. The primary advantage of going in for a resale flat would lie in buying a home in a strategic location where no new supply is coming in. If one has personal cash resources at one's disposal and is not reliant on a home loan, buying a home in a project that is 20 years or more in age can be a good investment bet if the residential property is in a strategic, high demand location with low or no new supply.

Pavan kumar, Chennai

14th November 2014

Hi Guys,

Buying a resale property has always proven to be advantageous from choosing a strategic location to acquiring finer properties at better prices. Although a resale apartment may be old, it is a good investment option owing to the low availability or supply of new properties in the area. Therefore, if the owner chooses to redevelop the property, it is likely to fetch him greater appreciation.

VKumar, Chennai

14th November 2014

Thank you Mr Venu Gopal, payment of stamp duty arrears is a very good point that I had not thought about. Very useful indeed. Krishnan

Krishnan PS, Apartment Resident

14th November 2014

Hi Mr Krishnan,

It is advisable that the buyer seeks technical expertise to evaluate the property before approaching the bank, as the bank would safeguard its interests by evaluating the property at a lower rate considering the depreciating property value in future. This makes the buyer eligible for a lower loan amount irrespective of a higher income, since the bank caps the loan amount around 80 percent of the concluded valuation.

Sujan Mitra,

14th November 2014

Sir,

Why are you going for 20years old apartment ? It is advisable to check the age of the house before buying. The apartment should not be more than 1-5 years old, at the maximum of 10 years. Any building older than this limit is not worth spending your money.

Kalki K,

14th November 2014