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Published on 3/7/2018 11:45:12 AM
How a retired banker bought Rs 5 crore flat
S Munjappa is a retired bank employee - a typical middle income pensioner living in Bangalore who retired way back in 2005. He recently bought Rs 5 crore super luxury apartment located within the city by a well-known developer. This investment is over and above the current house that he is living in.

How could this retired bank employee afford such a big investment?

“I did not set out to own Rs 5 crore villament. It just so happened that I had the money and the inclination to go for it,” says Munjappa. “The difference between me and others is that people tend to buy land and then simply wait for it to appreciate. I kept selling existing property and reinvesting in the areas that were comparatively upmarket. Looking back, I feel this is one strategy that gave me rich dividends.”

In 1995, Munjappa was living in a 40x60 property, with his wife and two children and his parents.

“I had got this land in a BDA allotment in 1987, for a sum of Rs 10,000,’’ says Munjappa. “A decade later, the entire residential market scene in Bangalore had changed. There were more private players in the market, as a result greater options. And this is what I slowly leveraged as time passed.”

He sold his 40x60 property and added more from his savings and from the sale of his ancestral property, he bought two sites.

And here is the mathematics:

The 40x60 site where he was then living fetched him a price of Rs 30 lakh in 1997. He reinvested the sum (with more from his pocket) into two 40x60 plots for 16 lakh in HSR layout (both BDA plots) and a 2BHK apartment for 8 lakh in Rajaji Nagar for him and his family to live.

In 2005, he sold one 40x60 plot for 15 lakh each, pocketing a total sum of Rs 30 lakh.

Thus, in 2005, he had one 40x60 plot in HSR layout, the 2BHK apartment in Rajaji Nagar where he was currently living and Rs 30 lakh, which he got from the sale.

By the latter half of 2005, his hunt for a good property to reinvest bore fruit.

“This time, I was looking to buy in an established area, as against a relatively new upcoming area, like HSR Layout where I had been investing till then,” says Munjappa.

He was able to identify a good 40x60 plot near the mini forest area in JP Nagar III phase, which was considered a prime area, even in those days. To the existing Rs 30 lakh, he added his gratuity and PF amount, which he got on retirement and bought the property for Rs 48 lakh.

In mid-2013, Munjappa sold both the HSR Layout property and the JP Nagar III Phase. While the HSR Layout property fetched him Rs 2,40,00,000; the JP Nagar III Phase property fetched him Rs 3.4 crore.

In January 2014, Munjappa invested in a super luxury 3BHK villament and he still has excess funds to invest more.