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February 20, 2006

How to buy an apartment in Bangalore.

Filed under: Opinions — Manish Bansal @ 6:56 am

Even though this post is specific to Bangalore, the general principles should apply everywhere. I have not included everything related to buying an apartment here like location, security etc. Just those things which are not so obvious to new house-hunters.

Size: Do not buy a smaller unit thinking that you can always buy a bigger one later. Banish the thought forever. If you can’t afford a bigger house now, you won’t be able to do so after 5 years either. Property rates are doubling every two years whereas the salary is not. And once you get settled in a house, it is almost impossible to shift.
Looking ahead 10 years, you’d have kids who would need a room of their own. Your parents might come to stay with you. You might acquire a ton of household stuff which you’d have to put somewhere. So buy the biggest house you can afford. Look for one with atleast 3 bedrooms with a total area of about 2000 sqft. It might pinch a little now but will sure come in handy later.

Built-up area: The area of the apartment quoted by the builder is called super built-up area. This is the area for which you are paying the money. This super built-up area includes the area reserved for corridors, playgrounds, gardens and lift etc. The area in which you actually get to live in is called built-up area which is typically 80% of super built-up area. So if you are buying a 2000 sqft apartment, you get only 1600 sqft out of that. Some builders claim to give 85% but that is the limit.

Loan: This is the one thing that causes most anxiety to new homebuyers. There are many things to be taken care of while taking a loan.

  1. Pre-EMI: In a typical payment schedule, the bank releases a part of loan, say 10%, at each stage of construction. By the time you take possession, the bank would have paid the entire loan amount to the builder. If the construction takes 18 months, you have to pay the interest for 18 months on the money the bank has released. As and when the bank releases money, the amount on which you have to pay interest goes up. This interest amount is called Pre-EMI.
    The alternative to Pre-EMI is to ask the bank to release the full loan to the builder in the beginning itself. Then you can start paying full EMIs to the bank instead of paying Pre-EMIs. Even though paying full EMIs sounds bad when you can get away with paying much less Pre-EMIs, it is actually better and will save you as much as 5 lakhs!
    When you pay full money to the builder up-front, you get a discount of 4-5%. This works out to be 1.5-2 lakhs, depending upon the cost of the apartment.
    The Pre-EMIs that you pay do not count towards your loan. I.e. they do not bring your loan down. You are just paying a convenience fee to the bank. Most people go for this option ’cause they can’t pay full EMI and the rent at the same time.
  2. Interest rate: You can go for either fixed or floating rate of interest. Floating rates generally change every quarter but it is up to the bank. Fixed rates are of two types – fixed for a term and fixed for full tenure. The fixed term is typically 3 years after which there is a revision to the rate, depending on the market condition at that time. There are very few banks which offer fixed rate for full tenure. ICICI is one such bank. Some banks like Kotak offer loan with interest rate linked to the Fixed Deposit rate.
    You can change your loan from fixed to floating rate later and vice-versa but banks typically charge 0.5% of outstanding principle amount for this. There is one hidden cost though here. Your interest and principle components for EMI would be calculated again and you might end up paying more.
    As of Feb 2006, the floating rate is 7.75%, three year fixed is 8.25%, and fixed for full tenure is 8.75%.
  3. Pre-closure: Most loans last for about 6-7 years even though they were originally taken for 15-20 years. If you get some extra money and want to close off your loan, banks typically charge you 2% of the remaining loan amount. Some banks do not allow you to do this at all. In ICICI, you don’t have to pay any penalty for this if you leave 12 EMIs.
    Also check if you can pay more than your EMI once in a while. Banks typically allow you to make excess payments once in a quarter or once in 6 months.
  4. Insurance: Banks typically fund up to 85% of the apartment cost. Some banks fund up to 90% if you take loan insurance but 90% is the upper limit. The loan insurance premium is typically 8-10k per year. It covers things like disability, unemployment, death, or loss of property due to fire and theft etc. Unlike life insurance, you won’t get anything back at the end of coverage term. You might be better off taking simple life insurance if you are not concerned about job security etc.
  5. Tax exemption: You get tax benefits on pre-EMI and EMI only in the year in which you are taking possession. See more details here.
  6. Loan disbursement: All the builders have home loan tie-ups with various banks and they also have loan agents who deal with those particular banks. After your loan has been sanctioned, it takes a lot of co-ordination between the builder and the bank to disburse the money. All this becomes much easier if you take the loan through these builder appointed agents.

Cost: Like there is an ex-showroom price for cars, apartments have an ex-builder price (I just made up that term). A typical price of, say, 2000/- per sqft quoted by the builder does not include charges for Water supply, Electricity, Car parking, Service tax, VAT, Registration, and legal expenses etc. You won’t get any wardrobes or kitchen shelves either. Add 30% of the base cost for these things (total cost now = 2600/-). The builder should be able to tell you exactly how much would these things cost. Your loan eligibility is calculated on the sum total of all the above costs.

Premiums: Some builders, or rather all of them, ask for a premium for corner units or upper floors. In other cities, lower level floors cost more than the higher ones but in Bangalore it’s the other way around. This premium rate is typically 20/- to 50/- per sqft per floor. There is no problem in paying it except that it is not shown in any of the documents. Your house would still be registered at a rate of 2000/- only. See if your builder can waive it off or reduce it; most do.

Amenities: All the apartment complexes are advertised to have a club house, swimming pool, gym, garden, and playground etc. It would be a shame to call that pit a swimming pool but the point here is that you are made to pay for these things. If you are going to buy a house in one of these projects, there is nothing you can do to avoid paying for them. But what you can do is to buy a house in a much smaller apartment complex. These complexes typically have only 12-20 units and don’t have any of the above “luxuries”. You can see these kind of complexes everywhere in residential areas like Koramangala. The prices are about same as big complexes but then you get to live in the city and in a much better locality.

Salespeople: Do NOT trust the marketing executives who take you to the site and give you a tour. They would promise anything just to sell you the damn apartment. Always call up the customer care department and verify it with them. Better still, go to their office and have a look at the papers yourself.

When to buy: This one is simple. Buy it as soon as possible. Buy it now. Don’t worry about leaving Bangalore and going back to your hometown. you can always sell it later. And at a profit too. The best time to buy an apartment is during the pre-launch offer. These offers run for about 2 months and the rates are up to 200/- per sqft lower. As soon as the builder gets the plans approved from the govt authorities (and the project is officially launched), the rates shoot up (and keep on shooting up). The number of units on offer during pre-launch is very less though.
Another thing to note is that builders do not release (put up for sale) all the units once they launch the project. They keep some units for selling them later at a higher price.

Links:

  1. BDA Sites – A highly useful and relevant discussion group on MSN. Do not trust everything you read there though.
  2. Official website of BDA
  3. Official website of BMRDA
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February 16, 2006

How to make your blog popular?

Filed under: Opinions — Manish Bansal @ 1:53 pm

65% of new blogs created are abandoned within a month of the first post. And less than 20% of the blogs are updated regularly, if at all. One of the reason people abandon their blog is low number of hits. How can you motivate yourself to write when no one other than you is going to read it? Another common reason is lack of time or work pressure. Some people quit because they don’t see any point in blogging once the novelty wears off. Well, assuming that you have decided to go ahead and keep at it, here are some points to help you along.

  1. Know why you blog: Some people blog ’cause they just want to rant and get the load off their chest. Some blog to create a repository of their knowledge which they can refer to later. Some write about their experiences from which others can hopefully learn and avoid making those same mistakes. For some it’s a weapon to fight boredom. So before you start blogging, know your type. I started blogging to learn new things. I have to do a lot of research before I can post “How to” type of posts.
  2. Write from the heart: People come to your blog to read about a real person. They want to get to know the raw you, not some stuff PR laundered stuff. Be direct and write in first person. People want to see your emotional core, the person they would see if all the gurads were down.
  3. Be original: Give others a reason to come to your blog. Make their time and effort worthwhile. Don’t just link to others’ posts and don’t say what has been said thousand times before. If you don’t have anything to say, keep quiet.
  4. Give and take: If you want others to come to your blog, you have to go to their blog! And let them know that you’d been there. Best way to do that is to leave a comment. Don’t just say ‘nice blog’ etc. Write something creative so that other person feels like checking out your blog. Leaving a good comment can make any blogger’s day.
  5. It takes time: You are not going to become Robert Scoble in a day. Be patient. It takes time and a lot of it. Just keep writing. It took me about 6 months before my site was the first hit on Google for my name.
  6. Be consistent: I like blogs which get updated regularly. You don’t have to bang out a post everyday but maintain a consistent frequency. Strive for atleast 2-3 posts a week. See #3.

Popular or not, writing a blog is its own reward. Atleast you can tell yourself that till you start getting a million hits a day.

February 13, 2006

Why I don’t like speed reading.

Filed under: Opinions — Manish Bansal @ 2:08 pm

Speed reading is a method of reading wherein you can achieve really high reading speeds using techniques like word assimilation, skimming, removing subvocalization and controlling eye movement etc. Some people even claim to achieve reading speed of 1000 words per minutes, with 100% comprehension!

I am not a slow reader but, hell, who can resist 1000 wpm reading speeds? So I tried this speed reading thing but couldn’t really see any real gains. My brain would hurt and I was not able to sleep at night after a speed reading session.

Here is why this thing doesn’t work. What we call reading is actually made up of two parts – words in-take + processing. What speed reading gives you is a really high speed of word in-take. It doesn’t make the processing of those words any faster. It’s like connecting a huge data pipe to a 486 processor. The processor works at its own pace while the data sits there waiting to be processed. And that buffer storage space is limited. As long as the old data is there, you can’t do any more reading.

Speed reading doesn’t work for kinds of reading anyway. You can’t read physics faster and you don’t want to read novels faster. Kind of a lose-lose situation.

So you can either read slowly and process the data at the same time or cram in huge chunks of data into your buffer and let the brain do its thing at its own pace. I prefer the former method, atleast for the joy of reading that it gives me.

May 12, 2005

Why iTunes worked and why Yahoo music would work too!

Filed under: Audio,Opinions — Manish Bansal @ 11:27 am

Yahoo annoucnes it’s music store.

Way back in 1998, when I started collecting digital music, I used to use Windows Explorer to organize my music and Winamp to play it. It was not the best of setups but I didn’t know any better; Until i got an iBook.

The organization scheme used by iTunes completely blew me away. I actually spent 3 days cleaning up all my ID3 tags just so that I could use iTunes. It was that good. Just type a few letters and the song is there. No more mucking around with folders here and there and remembering where you put what. When iTunes for Windows was released, I made it my default player. Even though Winamp 5 has it’s own media library which works similarly, it’s no match for iTunes’ interface.

Now, iTunes for windows is a 20 MB download but I didn’t mind in the least. I just had to have it. The fact that I could buy songs through it was last thing on my mind. And that’s exactly why iTunes music store is such a success and so would be Yahoo music. If you want to buy songs from any online music store, you need a special software, which is different for each store! Imagine Amazon.com and BN.com each asking you to download 20 MB big software just so that you could buy books from them! Whereas you can buy books online using just your browser, you can’t buy music that way. No special software, no music. So how do you get people to download your special software? You do it the Apple way.

You make it so damn good that they start using it for their personal use, without any obligation to buy any stuff from you. The keyword here is “good”. I didn’t download iTunes to buy music. I downloaded it to organize the music that I already had. And that’s where Real and other stores fail. Their software is designed to make it easy for you to buy music, not to organize your existing collection. You can, of course, use it for that purpose but it is torturous to use. And this is where Yahoo gets it right (as did Apple). Infact, their music player is almost a copy of iTunes but with certain new features. It can play and encode OGG and FLAC, in addition to AAC and MP3. It has a UNIX-style shell. It supports open XSPF playlist format. How much more geeky can you get? It lets you share music through Yahoo Messanger and burn CDs. It even supports iPod for non-DRM files.

Being a beta release, it is missing a few things like an Equalizer and is quite slow to load. The best thing that I personally like about Yahoo music engine is that it supports FLAC format (playing and encoding) right out of the box. Since I rip all my CDs in FLAC and iTunes does not support it, I an switching over to YME. But I’ll keep Winamp around just in case and, of course, my trusty foobar2000.

Update 1:
I just ripped a few CDs using YME to FLAC format and the tags it fetched for those songs were the best I had ever seen. All the fields (song title, singer, album etc) were nicely formatted, with proper cases. I tried the ripping the same CDs in EAC and the freedb tags just made me cringe. All CAPS, wrong titles, and incomplete information. I guess YME fetches the tags from its own database instead of freedb. Well, one more reason to use YME.

Update 2:
I am really disappointed at the pace at which YME is being developed. There is still no equalizer, there are hardly any plugins, and there are some weird bugs in it. It cannot “see” an audio CD unless I login as Administrator. iTunes can read the same CDs just fine with a normal user account. It also shows Nero CD burning plugin as a removable device!

The weirdness does not end here. Turns out that YME uses Windows Media Player (or a part of it) in the background to play music. I think it is limited to just protected WMA files but I am not sure. The problem is that it even uses the graphic equalizer settings of Windows Media Player! So if you are not happy with the sound, YME help pages recommend to turn graphic equalizer off in WMP. How much more un-intuitive can you get?

Update 3:
Even though there is no built-in equalizer for YME, you can still use the equalizer on your soundcard. Some on-board soundcards (mostly found in corporate PCs) may not have one but otherwise every decent soundcard should have it. My Creative Soundblaster has a really good 10-band equalizer. And the nice thing about using soundcard EQ is that it is not limited to a particular player. It would work the same whether you use Winamp or Yahoo Music Engine.

Update 4: (Feb 13, 2005)
A new version of YME is out. Still no luck with CDs. Still no equalizer. It is now taking 77 MB of memory even if I am not playing anything! It does have some new features but nothing of interest to me (I do not buy songs from them). Disappointment again.

August 13, 2004

Our world as a MMOG

Filed under: Opinions — Manish Bansal @ 1:00 pm

Have you ever felt like there is someone who controls this world, someone who punishes us when we do bad things and rewards us for doing good? Someone who keeps score; someone who gives us subtle clues when we are lost; someone who watches over us. Have you been hit by too many coincidences? Well, you are not alone.

If you have ever played The Sims, you’d be familiar with the theme. Here is an excerpt taken from Electronic Art’s website –

“Your Sims now have purpose in life. Do they aspire to a life of fame, fortune, family, knowledge, or romance? It’s up to you to decide if they will be a lover or a loser, a prince or a pauper, a fool or a mastermind, and many other choices. Give them what they want and they’ll lead a long, successful existence; indulge their fears and risk ruining their lives. It’s all in your hands.”

Notice the last line of the excerpt – It’s all in your hands!! You, the player, control what happens in your sim’s world. You can make them miserable or you can make them happy. You can bring floods and famine; you can make them sick. You can make them fight and kill each other. Isn’t that what’s going on right now in this world, the real world? All the wars, the floods, the hunger……..

People who kill someone in rage often wonder, later, what took over them. They would never have done those things in their full senses. Your mind is only as much free as the “player” allows it to be. Notice how some people don’t have any purpose in life. Or take for example homeless people or drug addicts or estranged youth. They are the way they are either because their “player” has abandoned the game or he has gone for a long break.

Computer viruses are getting more and more sophisticated day by day; and so are our diseases. We have come from simple cold to AIDS today and no one knows what else is to come yet. It takes sometime for the antivirus developers to catch up with new viruses and that’s why there is no cure for AIDS yet. “Those guys” haven’t yet updated their antivirus software.

In computer programming, a class is a blueprint for many objects. i.e. all the objects will have some of their properties inherited from that base class and some properties of their own. Now think of our DNA, also called “the molecules of Heredity”. Most of the DNA code is identical between any two humans but there are enough differences to make each one of us unique.

There are many more things that can be explained by looking at our world as a Massively Multiplayer Online Game. We play sims, someone plays us and someone plays who is playing us. Universe inside a universe inside a universe. These ideas seem far-fetched but who knows! Whatever the “reality” is, I hope the server doesn’t crash. Remember dinosaurs?

April 20, 2004

Reading with a Purpose!!!

Filed under: Opinions — Manish Bansal @ 12:31 pm

“Some books are to be tasted, others to be swallowed, and
some few to be chewed and digested”.

– Francis Bacon, sixteenth-century English philosopher

Turning the pages of a magazine while sitting in a dentist’s clinic is very different from pouring over the details of your new web-based
transaction system in your office. Even though what you are doing in both the cases is going through some text or images, there is a big difference in “why” are you doing so. Or in other words, your purpose of reading is not the same when you read different things. You read a magazine in a dentist’s clinic to kill time. But you read a technical specifications document to really understand how the damn application works. And herein lies the secret to effective reading.

Let’s get back to reading a magazine in a dentist’s clinic. The moment you pick up the magazine, you know in the back of your mind that this is just for killing time. You know that none of this stuff is worth remembering. And when your turn comes, you just drop the magazine and go off. You had a clear purpose before your started reading that magazine. Now the trick is to apply the same rule to all the reading that you do.

So, before you start reading anything, ask yourself –

  1. Why I am reading it? Is it for killing time? Is it for really
    learning something?

  2. How will I be using this stuff? Will it make me do things
    differently? Will it make me plan better? Will it get me a girlfriend?

  3. How important is this stuff to me? Is it worth remembering? If so, for how long? Is it just good for gossiping or has it got some real value?

  4. What level of detail I want? Do I want just the big picture? Can I read just a section to get what I want? Or should I read the whole book?

It takes less than a minute to establish a purpose but it can save you hundreds of hours. Hours that were spent reading ‘Boing Boing’, just because you felt you had to read that. Reading without having a purpose is like traveling without knowing where you are going. It might seem like fun but it won’t get you anywhere. Add to that the tools at our disposal to flood us with information and you have the ultimate time-wasting machine.

Every time you read something, think of its purpose. Note it down. Then think of what made you start reading it in the first place. Compare the two. You’re guaranteed to be surprised.

So next time you start reading a popular blog, ask yourself!!

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