With plans to retire in India after having lived in the UAE for three decades, Indian expat Vincilla Miranda was keen to create a source of income. So Miranda constructed a nature-centric rental vacation home or a guesthouse in her hometown in the southern part of India. Here’s how she went about tackling the associated expenses, all from her savings built over the years.
Dubai: Like many Indian expats in the UAE planning a source of retirement income back home, Dubai-based resident Vincilla Miranda bought over an acre of land in the Indian state of Karnataka (Udupi) a little over a decade ago, eyeing it as an ideal spot to eventually build her future retirement home.
At that time, she had paid approximately Dh54,000 (INR1.1 million) to buy the plot of land, funding Dh20,000 from her savings and borrowing Dh34,000 (INR700,000) from her father. About three years later, in 2011, she repaid her father and started saving for the construction of her retirement home.
How savings were built ground up
When Miranda moved to the UAE in 1991 just after her graduation, her first job fetched a monthly salary of Dh1,500. Her salary increased steadily as her experience grew in the oil and gas industry. Through the years, after taking care of living expenses and her son’s education, Miranda built up her savings. Over the last decade, she has been able to save almost 40 to 45 per cent of her monthly salary.
“I managed to save a significant portion of money when I transferred to the US to oversee a project from 2011-2013. Plus, whenever I moved from one job to another, I saved the end-of-service money as my retirement fund. That’s why I didn’t have to take a loan to buy the plot nor for the construction work.”
Laying the groundwork for the guesthouse
More recently in 2018 on one of her trips to India, Miranda noticed a demand for quaint getaways among young people living in cities such as Mangalore and Bengaluru. She thought it made perfect business sense to construct a guesthouse on her strategically located riverside plot and use the remaining space to build her retirement home. But this also meant an additional chunk of expenses.
“Since the plot is situated by the riverside, building a guesthouse on it required levelling, foundation and fencing work and that alone cost me approximately Dh148,000 (INR3 million). But even with a substantial part of my life’s savings to build the guesthouse, it would create a sustainable source of income when I eventually retire.”
That was only the beginning, as the main building construction work was yet to start.
Factoring in more expenses
“I had to spend roughly Dh272,000 (INR5.5 million) on the construction of the three-room guesthouse built like studio apartments, electrical works and getting the required government approvals. An additional Dh74,000 (INR1.5 million) went into interior design, landscaping, electronics, CCTV and solar panel installation, utility room fittings, internet connection and a few other sundry expenses. And I spent a little over Dh2,300 (INR48,000) to create a search engine optimised website to advertise the spot.”
In order to oversee the construction and associated interior works, Miranda travelled to India at least once every month pre-pandemic spending anywhere between Dh1,500-2,500 on airfare. “By doing this, I managed to get the entire construction work done in roughly one year. I also managed to significantly save on costs by sourcing furniture, furnishings and interior decoration items locally. We have installed solar panels to save on energy consumption and electricity bills. Since I commissioned the construction and interior design work to local professionals from the community, the cost of execution was reasonable.”
Pandemic-driven financial setback
Miranda had plans to inaugurate the guesthouse towards the end of 2019, but a family emergency pushed the opening to early 2020. Thereafter the pandemic further delayed the opening by almost a year until end of December 2020.
“Since we were to open in December 2019, I had employed caretakers at a monthly salary of Dh750 (INR15,000). Although the guesthouse’s opening was delayed by almost a year due to the pandemic, what was paid to the caretakers (Dh9,000 in total) was made up given that I could save at least Dh18,000 at not being able to travel to India.”
Accounting for ongoing expenses
Post-opening, Miranda now has to account for ongoing operating expenses to run the guesthouse that included a manager’s salary of Dh500 (INR10,000) to her sister who overlooks the operation, and Dh300-500 (INR6,000-10,000) on social media marketing.
Although due to the ongoing pandemic the initial months were slow, reservations have picked up pace over the past couple of months, Miranda revealed. Rented at Dh175 (INR3,500) per room per night, the guesthouse has now started making profits for her investment.
“Even after offering a discount for long-term booking, we have earned approximately Dh20,000 (INR405,000) that will cover a large part of our ongoing monthly expenses. We are also receiving enquiries to host small gatherings at the guesthouse.
“Especially since the pandemic, I have realised that surrounded by nature and water bodies, the piece of land serves as a good staycation spot for people from fast-paced cities in India. This has encouraged me to further invest in the adjacent property and convert it into another guesthouse. This will require an additional investment of over Dh222,000 (INR45,00,000) and I am already creating a financial plan to start the project.”