Importance of evaluating your home “TCO” (Total Cost Of Ownership) – a critical qualification criteria for Mountain Property Investment 

Raj & Divya – a couple in their late twenties from Bangalore, engineers by qualification and at junior management levels in Technology led start-ups, came to Nainital for a WFH stint of six months in the spring of 2021.

The decision was primarily driven by their love for the hills & the fact that both had roots in Haryana & U.P. respectively, having frequented Uttarakhand quite often.

Renting a long term room in a homestay, while the weekdays were work driven the weekends were for rides to neighboring spots on a rented bike. During one of the weekends, they planned an over-nighter to visit the Mukteshwar temple and scenic spots around.

The drive from Nainital to Mukteshwar is about an hour and a half of seamless views – lush green meadows, sunlight kissed mountain peaks, Orchards laden with pears, plums & apricots, clouds, mist & light drizzle intersecting in patches – and takes on thru. Small hill towns of Bhowali, Ramgarh, Satbunga.

The couple was mesmerized with the beauty of the terrain, the play of colors was out of a picture book and the tranquility captivated them. 

Stopping at small quaint cafes in fruit orchards for “kulhad Chai” & Maggi, plucking and tasting the delicious peaches, plums and chatting with the locals, they had time on hand and made the wise decision to take it slow, absorbing the “kumaon” magic. 

Not at all surprising, for the terrain and culture of Kumaon is breathtaking and the clock does start ticking slowly here for those winding through these curvarious roads, self adjusting to the calmness and the unhurried pace around.

Like many of us who witness this hypnotizing “DevBhoomi aura” as I call it, Raj & Divya also decided during this road trip that they wanted to own a piece of this heaven.

And here hangs their tale:

• Both had agreed to try and finalize a plot during their remaining workation which was approximately Three months.
• In 2021 the repetitive pandemic waves were ongoing and real-estate all around was on a low, here in the mountains, transactions are as it is few and limited, those too had trickled down in the spring of 2021 due to the onslaught of the deadly second wave and travel at a standstill.
• Being visitors and new to the real-estate dynamics of this belt, they shifted their home-stay from Nainital to Satbunga, in order to be more near-ground and devote time to their research and understanding through locals and the few available brokers/agents.
• At an early stage of their careers and also aware of their priorities, the couple discussed amongst themselves and arrived at a budget of spending max.5-6 lakhs for acquiring 1.25 Nalli land (300 sq.yards) the permissible limit. They planned to acquire and keep the land and slowly construct their small cottage over the years with a target of having a mountain vacation and rental income home by their mid thirties.
• They identified the plot at a bit of a remote but upcoming mountain location, negotiated and closed the deal within their budget, around mid of 2021.
• The same was registered and mutated in their name prior to their returning home to Bangalore in Oct 2021.

Both Raj & Divya were extremely happy, having successfully acquired their piece of “Devbhoomi” and this was a topic of conversation at almost all their social get togethers, for the next few months. Friends claiming, they were awestruck by their love and commitment to one day settle in their mountain home.

In April 2022, as the third wave of the pandemic was on a downward trend but WFH still very much in-force, particularly in their industry verticals, both of them traveled back to Kumaon for two – three months, to start design & estimation of their cottage, in order to plan for the timelines and funds.

The couple reached out to me through reading about Realeye at www.therealeye.com through my blog published in the “Kumaon Realty Forum”, an online group of investors & advisors.

I met Raj & Divya in June 2022 in Mukteshwar, where I am based, for an introduction and need/problem assessment.

Their Problem Statement:

• They had taken three home building contractors to their site separately, for design and estimation.
• Were surprised & perplexed to receive the first estimates which were twice the expected per square feet rate they had envisaged.
• On probing the contractors further they had received various reasons for the high cost of construction but had gathered it was majorly due to the landscape of the mountain they had bought their plot on.

Both husband & wife were dismayed and told me they were thinking of aborting their dream home project, when they came across Realeye, read about our qualification & validation consulting service and also read of somewhat a similar case study in one of my blogs.

Sir, can you advise us please – was their one line ask.

Advice I definitely can, however what it will be will depend once I assess your site, was my straight reply to them.

I requested them to meet me with all the papers of their land including the maps and contouring. 

We met at their site at the appointed time the next day –

Well, the positive things first:

• It had a great view of the mountain ranges
• It had a continuous background sound of a natural steam flowing downhill, somewhere close by to that mountain slope

And a slope it was indeed – steep, top to down, a (-70/80.° gradient) fall in the valley.

What were your key considerations while selecting this land for your cottage, though I was by then aware of the answer, I still wanted to reaffirm it with them, while standing onsite.

“View, surroundings and the budget we had set” matched my anticipated reply.

So, if the cost of land was the consideration while making the selection and not the “the total cost of ownership TCO” of your cottage (which by the way is what you acquired the land for) what’s the concern now ?

A long silence, as they looked at each other nodding their heads side by side –

“Sir, we get the point you are driving here. We did take an approximate idea of the per square feet cost of construction here from a couple of local sources when we were budgeting initially.”

But you didn’t adopt an integrated “identification & Qualification” approach to plan and validate the “overall cost of land and your constructed cottage” – TCO, at the land selection stage ~ a common but costly error.

You saw around and set a budget for your land which is less than half the going market rate around this area – but had you taken the following factors vis. Subsequently constructing your cottage on this land, you could have evaluated this option holistically and practically viz. The budgetary efficiencies:

• Approach road to your mountain slope is still “katcha”, some 1.5 – 2 kms from the metalled road – what will be the delta logistics cost increase in cost of transport to and from site.
• I observe you don’t have the contour mapping of the hillside and your plot ~ if the same is studied in advance the plan to design the structure seamlessly with the mountain contours can be developed, which would have given you a fair idea on any challenges you might face in either quality and/or costs.
• There are a few other assessment and qualification criterias I suggest my clients on while doing a land selection.

However, the best advice now that I can give both of you is that I can refer you to a local architect who does eco-friendly structures to evaluate doing an unconventional metal, fly ash & wood design for your cottage, post studying the contour mapping and the gradient/plate/soil-rock mix.

Also, you should also evaluate the social and infrastructure development of your surroundings viz. The prospect of you staying here frequently, say 5-10 years from now – you certainly will require basic convenience and infrastructure around you, more-so in the extreme seasons here, unless of course you are fine with the concept and logistics of a forest retreat.

As I write this blog mid 2023, I am aware both Raj & Divya have finalized the design for their small cottage and are planning to start construction next year – the alternative design and construction approach suggested seems to have worked. 

However, I cannot comment on the overall landed cost of their cottage – wish we could have met before they identified and selected the plot – ‘Their tale would not be hanging’ that I would have ensured!