A Mumbai homeowner’s dilemma over upgrading from a compact 1RK to a 1BHK or 2BHK has sparked a discussion on Reddit, with users examining the financial implications of selling the existing property versus retaining it as a rental asset.
The homeowner currently owns a 270 sq ft 1RK in Mumbai’s western suburbs, located close to a Metro station. With two new homes in the same project expected to receive possession within six months, the buyer is assessing whether to move into a larger 2BHK or purchase a 1BHK while keeping the existing property as an investment.
Two Financial Scenarios
Under the first option, the buyer is considering a 610 sq ft 2BHK priced at Rs 1.50 crore, while selling the existing 1RK for Rs 65 lakh. The calculation shared on Reddit includes a Rs 75 lakh down payment and a Rs 10 lakh loan, resulting in an estimated Rs 24,000 monthly EMI for four years. This option would mean giving up potential rental income from the 1RK.
The second alternative involves purchasing a 445 sq ft 1BHK for Rs 1.10 crore while retaining the current home. The buyer would again contribute Rs 75 lakh upfront but borrow Rs 35 lakh, translating into an estimated Rs 34,500 EMI over 15 years.
The existing 1RK could then be rented out, with the homeowner estimating net monthly rental income of around Rs 18,000 after maintenance, taxes and brokerage expenses.
The Reddit user said the comparison was being made strictly from an investment and financial perspective, excluding lifestyle requirements and space preferences. Users were asked to consider the effect of each option on overall wealth over five, 10 and 15 years.
What Reddit Users Suggested
Responses offered varied strategies, including retaining the 1RK for rental income, purchasing the 2BHK and renting out an additional room, or choosing the 1BHK while holding the existing property.
Real estate consultant Ashish Patel also highlighted redevelopment as another possibility.
“If the 1 RK apartment is in an old building and the building is expected to undergo redevelopment, the homeowner should consider purchasing extra area above the area offered under redevelopment. The homeowner and the developer who will redevelop the building are both in a win-win situation here. Because the homeowner gets a discount from the developer, and the developer also gets initial cash flow for redevelopment,” said Ashish Patel, a real estate consultant from Mumbai’s western suburbs.
Source: Hindustan Times
