sathish kumar
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Is buying a flat really a gain as it appears ?
Q: Is buying a flat really a gain as it appears ? Look at the below example, Total cost of flat = 40 L (1000 sq.ft * 4000 rs) Home Loan taken = 30 L , EMI per month = 30K Period = 20 years Invest from our hand = 10 L , TOTAL BUY AMOUNT = 40 L Now I want to sell the house after 5 years, Now total cost of flat = 55 L (1000 sq.ft * 5500 rs) TOTAL SOLD AMOUNT = 55 L PROFIT = 55 - 40 = 15 L But during these 5 years EMI paid = 60 months*30K = 18L 15 L as interest and 3 L principal amount. PROFIT - LOAN INTEREST = 15- 15 = 0 FINALLY THERE IS NO PROFIT MADE IN 5 YEARS FOR THE PROPERTY BOUGHT. Am I missing anything here?

Latest Answer: hi satish..You are missing profit from Rent, Income Tax benefits and inflation too.

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