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There can be two reasons why your loan application was rejected it may be that your credit record is not good. You need to find out if this is the case. CIBIL gives reports on payment these days. Alternatively,your income may be deemed as insufficient to pay the loan EMI in view of your other expenses and payment. You need to talk to the bank on this issue to know the answer.

I want to buy a second home for investment and let it out on rent. This way I will create an asset and also earn some income. Is my thinking correct?

Sabeen Rizvi,Lucknow

Investing in a second home needs to be done judiciously. Buy a property only if you think it is at a good bargain price and if the prospects for appreciation are bright in view of the development in the vicinity. Rental income on residential properties is only about 3 to 4 per cent on the gross level; so this alone cannot possibly be a reason to acquire a property.

My friend is insisting that I buy a commercial property a shop. Is it a good investment?

Srikant Phadke,Mumbai

Commercial property can be a good investment but location is crucial. Normally commercial properties offer a higher rental potential as compared to residential properties. But,if you are taking a loan to purchase the property,the loan rate will be higher than a home loan.

I want to sell a commercial property that I bought at a price of Rs 4 lakh in September 2000 for Rs 25 lakh now. What should I do to save tax?

Sanjeev Rai,Pune

If you sell your commercial property and want to save tax,you will need to buy a residential property worth Rs 25 lakhs Buying a commercial property will not help.

The expert is Suresh Sadagopan CFP,Ladder7 Financial Advisories