'Beta, when are you buying a house?' Expert says don't give in to social pressure; buy only if these conditions are met
AI Summary
Investors should consider the financial implications of homeownership versus renting, as a recent analysis shows that renting a ₹1.5 crore flat for ₹40,000 a month yields only a 2-3% return annually before additional costs. The advice suggests that purchasing a home due to social pressure may not be financially sound, and that funds tied up in property could be more effectively invested elsewhere. Ultimately, the decision to buy should be based on personal goals rather than societal expectations.
A ₹1.5 crore flat rents out for ₹40,000 a month. Sit with that number for a second. It may sound surprising, but that simple calculation raises an important question: does buying a house always make financial sense? While homeownership is often seen as a major life milestone, the numbers don't always support the decision—especially if you're buying only because of social pressure.
Last year a young couple came to me on the verge of buying a house. But they weren't excited. They were tired. Because every now and then, the same question landed at the dinner table: "Beta, when are you buying a house? They didn't want a flat. They wanted the question to stop." – Abhishek Kumar, SEBI-registered Investment Adviser (RIA) and Founder of SahajMoney, writes in a Linkedin post.
“So before we talked EMIs, I asked them to take it easy. Then we ran the boring numbers instead of the guilty ones. The rent of ₹40,000 a month on a ₹1.5 crore flat is roughly 2% to 3% a year, before maintenance and property tax eat into it,” he goes on to add.
So, from a pure investment perspective, that's a difficult case to make.
But the couple reasoned with Kumar, “But the house grows too”
The expert responded, “Yes, the flat appreciates. Nobody's denying that. But that ₹30 lakh downpayment could also grow in a portfolio which they can actually sell a piece of when required for their goals.”
One can't can't sell one bedroom out of house when you have an important goal to meet and is short on cash. Moreover, if even if it grows, interest, maintenance and tax quietly take their cut
“Buying a house isn't the mistake. Buying it because someone made you feel behind would be the mistake. Rent the lifestyle. Own the decision,” Kumar conludes
Sanchari Ghosh is an Assistant Editor at Mint with over 12 years of experience in journalism, specialising in personal finance, DLT & DeFi, geopolitics and foreign policy, with a particular emphasis on how these areas intersect. <br> She writes extensively about how money works in everyday life—helping readers navigate personal finance decisions. <br> As AI reshapes investing behaviour, capital is increasingly flowing into decentralized ecosystems, redefining how assets are managed, traded, and valued. She focuses on explaining how money flows within frameworks like Distributed Ledger Technology (DLT), DeFi protocols, and crypto markets—while also exploring what the future of money could look like in a trustless, programmable financial world. <br> She also focuses on immigration-related issues, simplifying complex topics around visas, passports, overseas financial planning, and the many practical challenges Indians face while moving or living abroad. <br> Alongside personal finance, Sanchari has a strong understanding of international politics, contemporary and historical conflicts, and global state decisions. She closely tracks how geopolitical developments influence economies, markets, and individual financial choices, bringing together finance and global affairs in her reporting. <br> She began her career as a desk editor, which gave her a strong foundation in news writing. Over time, her interest naturally shifted toward personal finance. Before joining Mint in 2020, she worked DNA, The Times of India, Outlook Money, BloombergQuint, and ETMoney. At Mint, she got an opportunity to expand her coverage to include immigration and geopolitical developments while continuing to closely follow personal finance trends and market movements.As a journalist, she is committed to accuracy, intellectual rigour, and fairness. <br> She is an English Major and her work took her across cities including Delhi, Mumbai, and Pune. Living independently from an early age gave her firsthand experience in managing life and money on her own. This practical exposure sparked her strong interest in personal finance. <br> Outside the newsroom, Sanchari is a sports enthusiast who regularly plays lawn tennis and squash. In her younger years, s...
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