This last week I was trying my hand at something that one of my favourite financial guru does... using cash flow model in real estate. Yes none other than Robert kiyosaki.
I have read all of his books and find his methods and systems very interesting .
One of the things he talks about is how he uses his model for buying and selling real estate . How in some time he is able to use the cash flow being generated to pay for the loan directly... making the property pay for itself while the cost of the property continues to increase.
I have been fascinated by this concept and have been trying to see how to make it work in the real estate market in India... I thought I found a way to make use of this last week..
We have a property that I have put on rent and I am paying a higher emi than required thereby reducing the tenure of the loan. I thought that if I could match my rent with the reduced emi but in a higher tenure.. bang I had a great way to make passive income !!
I studied it a lot. Worked on it.. and finally I went to hdfc to discuss the increase in tenure.
I was not successful. I failed for the following reasons
1. In India they don't give loans if you are over 60. So instead of a 20 or 30 yr loan.. they gave me a tenure that ended when I will be 60.. thereby increasing the emi amount!.
2. The emi that I have paid till now.. basically they have taken away all of the interest amount that I would have needed to pay for so many years . .. so if I refinance the loan again.. I would now need to pay a much higher interest . Thereby killing any benefit I may have.
It did not work out as I had planned . I failed.
But as Robert Kiyosaki says without failure one cannot move ahead.
I will learn and try again.
I will succeed soon...
That's simplefinancialsense
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