Buying a home is certainly a big decision for you. It could be the biggest and the most critical move of your life and its outcome can impact your and your family’s life in a direct way. However, there is no escape.
If you want to secure your family’s future, you should buy a home sooner than later. It may sound like a grandmother’s advice but it holds ground irrespective of how modern we become. Owning a home provides you stability. You can’t stay in a rental home forever how cheap or good it may be.
Although a large number of people appreciate this fact and want to buy home, they are caught by some issues that delay their decision and even discourage them. Let’s discuss the common pitfalls people generally face in their home buying journey.
Price of their dream home
Of course, the very first hurdle comes in the form of pricing. Buying a home requires millions. Thanks to availability of home finance, it is not an issue for people who have good credit scores and stable income. Despite that paying large home loan instalments could give you sleepless nights.
Most people defer their decision after thinking about all this. But just revisit this conundrum. If you do not want to take big liability on your shoulders, why not to go for the one which you can manage? Why not to buy a smaller 800-sq ft home, instead of 1,500-sq 3BHK?
It is actually a trap. We think of buying our dream home in one shot. That is not possible for most of us (unless you hit some gold mine or become an overnight success). In foreign countries, people go with something called ‘starter homes’. These are the homes that give them a home owning experience, save the amount of rent they could have spent, and enable them to grow their net worth through appreciation in capital values.
Now let’s calculate. If you are staying in a home at a monthly rent of Rs 15,000. In a year, you would spend at least Rs 1.80 lakh plus some expenses towards maintenance, wear and tear. Let’s take Rs 2 lakh a year.
If you think that saving for another 5 years can get you a residential property of your dream, by the end of 5 years, you will be down by Rs 10 lakh. The same property you had set your mind on would cost even higher. What will you gain?
On the other hand, if you enter the property market by taking a modest property, you would save all the rent and get in a position to get some capital gains. After some years, you can sell your home, accumulate more capital and fulfill your dream. Doesn’t that make more sense?
You may think that selling a old property is not an easy thing. Not really. There is a latent demand for ready to move in properties at established localities. If you are flexible, you can price your property your property a notch down, if need be, and get going.