Two years ago Abhishek Raman, a software professional informed his father about his decision to buy a home. To some, the decision came as a surprise since Raman is single and a young working professional. Despite all the apprehensions, Raman felt he was ready to invest in a home. He opted for a completed project and moved in with his family last year. In the last decade or so, the steady rise of disposable Incomes have enabled young investors Iike Raman to set foot in the realty market.
REAPING THE BENEFITS OF A HOME LOAN
Investing in real estate in your younger years is advantageous as there are fewer strings attached to the home loan process too. “One of the main reasons I decided to invest in property early on was the age factor. The older you are, the harder it is to procure a loạn, the EMIs tend to be on the higher side too. Also the big expenses should be sorted out early In life,” says Raman.
Gopal Kavallreddi the co-founder of a realty firm says, “Until a few years ago, the decision to purchase a house would normally be taken around the age of 40, with the understanding that the buyer could own the house close to the time of retirement. But now, with rising disposable Incomes and a desire for better living, more and more home buyers (especially in their mid-20s) are opting to buy flats with Interest rates almost at a 10-year low, the government is pushing for affordable housing and encouraging people to avail of tax benefits.
This is perhaps the best time for salaried people (with Incomes In the range of Rs 15 to 30 lakh per annum) to invest in an apartment.” On a cautious note, Kavallreddi feels that it is imperative that the home-buying decision should be taken only after evaluating certain parameters like cost-to-rent vs cost-to-buy in each location. The monthly EMI payment should not exceed 10 percent of your monthly net Income; Impending financial commitments in the near to mid-term future like marriage or kids, size of the house ability to service the home loan (unforeseen situations of job loss or disability)
ESTABLISHING FINANCIAL SECURITY
According to realtor Chitty Babu, investing in real estate in your younger years instils financial security and financial discipline early on, as one gets into the habit of saving and spending cautiously. “Home ownership features high on the priority list of millennials and they are not ready to compromise on quality. If you are a first-time homebuyer. It’s always Important to ensure that you don’t overshoot your budget; otherwise, the loan can become a lifetime burden. Also, If you plan to Invest in a property It is always good to start saving for the down payment six to seven years in advance.
Ensure that your credit history is clean as well. Once you are through with your financial obligations it’s Important to know your rights as a homebuyer. Thanks to the government, various policy regulations like the RERA and GST will bring in more transparency and ensure the timely completion and hassle-free handover of real estate projects.