I’m confused whether to buy or rent?
I’m a 29 y old female with an inhand of 1.2 Lakh per month. My parents are getting old, we were living in a tier 3 city on rent from past 10 years, dad is mot financially stable. My real brother married and is settled in Pune with wife and kids. He boust a flat and car on EMI and his own financial burdens. My parents will not shift to Pune with him. We have to vacate the rented house and I am planning to buy a house now. The average price of a good 2 bhk in my city is 50 lakhs. Now given my salaried income and my marriage plans this or next year, I am confused. If I buy, I will take a loan, I have savings of nearly 20 Lakhs today, so the down payment and everything i can arrange plus have some kept aside for marriage. Parents will also contribute in marriage. But then if i take the loan, I am afraid that the in laws or to be should not have a problem in case anything happens. I’m confident i will be able to finish off the loan atleast in 5-6 years given I am only going to grow in my career. And I would also have a property in my name in a tier 2 city. But am i making a mistake by buying a house rather than investing and getting better returns years later? But it is also a need an emotional to have a house for my parents where anyway my rent will be saved instead of out of pocket expenses it will be a little more EMI. Please suggest.
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If that house is for your parents to live (and you care about them too much) - then buy. Don't think about it much.
Also marry a guy who would be okay with that.
If that flat is from an asset standpoint - don't buy. You should invest.
House is for parents to live because anyway, I will have to make some arrangement for them to live either on rent so the rent that I will give will be an out-of-pocket expense for me and if I get a house for them today, so the EMI is will start, but at the end of67 or probably 10 years, I will have a property in my name
Expenses change after marriage, and with kids. Make sure emi doesn't take more than 30%of your salary. Pay early with bonus but don't make it more than 30%.
Otherwise rent.
I’m giving my parents a new home, a bigger one.
I’m male and a year younger than you. Believe me, this is the best feeling I’ve ever experienced. I’ve spent a lot on traveling, but the turning point in my life was when I saw my friend lose both of his parents. He had only regrets that he couldn’t do anything special for them.
That’s why I decided—as my parents are getting older—that their dream of owning a bigger house should be fulfilled first. Traveling and preparing for retirement can wait a year or two.
I’ve purchased land, and construction is already halfway complete. It’s a two-story building with 5 bedrooms. I didn’t go for a flat because my parents have always lived in their own house, and they don’t like the concept of flats at all
hopefully, my story will teach you something. you will do without any regrets. its big commitment.
so all the best
also i had purchased my property on mother’s name. and i have signed MOU with papa, bhai and di.
due to obvious reasons🙂
Thank you for the advice. I have a similar story that I really want them to have a house, although my budget would not allow buying a land and building a house on it, but I think a flat in a good location could use good returns later even I am very fond of travelling and I spent a lot in the last two years on travelling When I realise that I could save, I could take a break and invest here instead, so yeah, thank you for the advice and good luck to you.
- If your to be husband is going to have a problem with you supporting your parent, they are not right for you anyways.
- As you already have 20L for down payment, loan sanction amount for a 50L property required will be around 30L, you will not get all of it disbursed because you have to pay a piece of every builder demand from pocket, so assume around 25L loan disbursed at max which is not much. Max per month EMI will be around 20-22K
- As you mentioned, you will obviously grow in your career and even with current inhand you can surely handle your marriage and look at other financial investments As well quite comfortably
With all this, finding right and understanding partner will ease things overall for you
Thank you for the first point loved it. The second point, actually, 20,00,000 are my complete savings as of now, so I am not planning to put everything in downpayment. I am planning to put half around 10 to 12, lakhs in downpayment and the remaining I am saving for marriage. Considering the kharidi Kharch that is going on and the other expenses that I might have to put over and above the buying of the flat, just for an example, Furniture, et cetera, even if it is very personal, still considering inflation and everything expensive today, I would assume an over amount of around 4 to 5 lakhs over and above the purchase value of the flat easily. So the EMI would come to 30 5K per month as per my calculation if I take it for 15 to 20 years, but there are other challenges as well if I plan pregnancy after 34 years or even 23 years then I might have to take a leave, and it will affect my earnings all that so a little tensed about being a woman and how to handle this, but still I am trying to gather courage and buy it
3-4 years *
Don't buy a house (assuming apartment) it only depreciates. You will get a much bigger and better house for rent. They will feel much more proud of living in a big house that caters to their aspirations than a smaller house with the stress they know u are under because of the constant emi payments.
My parents prefer to live in a flat because they are getting old now and they need some social community presence around them a house for rent the only problem. I see is that if I am anyway going to pay rent, it might as well be EMI investments so that within a few hours I have a property in my name and the rent out of pocket expense will not go and win.
In vain*
First of all, you're doing great. Most people don't have the financial discipline or the responsible nature that you do.
Find a guy who values those qualities, and supports you for who you are. Otherwise, he's not worth it.
Oh yeah, go ahead and buy that house since it's for your parents to live in. You won't regret it.
Thank you. It’s really difficult to find a guy who support in something like this because if I find a guy who himself does not have a house in a big city and is planning to buy one so he would definitely want me to contribute to that and I doubt that I will be able to take care of both things simultaneously, but let’s hope for the best.
Buy. If you're saying the house will cost 50-60 L, buy as you have down payment. Your income will increase eventually and you'll be able to pay off more.
Go the long route, look for 3bhk (speaking from experience of a friend who bought house before marriage) if you are to ever live with spouse and parents, 3bhk will have a breather plus it'll be worth something.
Another tip: since you will be able to pay off sooner, look into overdraft home loans. Why? You can park the marriage money and savings you have in the OD and that saves a LOT of interest. That money is available liquid for you to use anytime just like SB. The Interest saved will be 8.5%< which if you invest otherwise in MFs will be equivalent of earning ~13% if you deduct tax on the short term gains.
So investment in MFs is worth only which it gives you more than 15% which honestly is moving towards the higher risk profile.
Also, hang in there. You're on the right track, and the decision will fall in place well 🙂
Thank you for the advice. I have a few questions. So currently, I will be looking for a 2BHK because that will suffice since it will be only my parents who will be living in the house. I will move to another city eventually after marriage. Secondly, can you elaborate a little more on on this overdraft home loan facility. I have not heard about this.
I suggest not to burn hard earned savings.
And no credits/loans/emi
My opinion:
If I reach a corpus say 1.5.cr which is very difficult/doable will solve some financial challenges. Only then whatever is surplus I will burn to do things that I sacrificed in the journey.
P.S There are pros living in rented places, one of the biggest ones is you don’t need to worry earthquake or any natural calamity. Think I build a solid house spending all my savings then Mother Nature decides to bring it down. I can’t go back in time or build another one.
But if I wait to build a corpus, I think I would be losing out on the 1015 years that my parents can live peacefully in a house of their own or my own regarding natural calamity that can happen to anybody be rented, house or a house that has been bought. I’m not really worried about that factor because the city I live in, it is not earthquake or natural calamity prone as such thankfully, but the thing that I am mostly concerned about is whether I should buy now and get a property in my name after years or build a corpus and get more returns after years, but again the confusion lies that I will have a house in my name and being an Indian middle class person. A house in your name is a big thing.
I wish there was a downvote button
Hey , I am a female (I thought it was relevant) and did something similar this year. Just keep a few things in mind
- I bought a house for my parents but I kept my and my father’s name both. It gives a sense of security I guess . Loan application is in my name
- Always consider extra cost while buying a house. Registration, TDS , interiors they will be big amount that you need to account for. Since I got married before buying the house, a huge chunk of my savings were gone . So I bought a flat which was under construction, it will be ready in 2 years and will give me time to save money
- Take the max possible tenure on the loan. You can close it earlier when you get more cash in hand but higher tenure will mean lesser emi so lesser burden
- Banks give an insurance option also with loan, take that because then god forbid if anything bad happens like lay off or something banks will pardon 6 months of emi .
- If you are worried about future husband objecting cause you both may also have to buy a home in future. I don’t think that will happen in next 5-6 years that will be enough for you to repay this loan. Worst case this loan stretches then let him be the primary applicant on the loan and you can be the secondary that way his credit score will be checked and not yours.
While I love the fact that I did something for my parents it does cast a scare, like I can’t leave my job and do a startup but I guess that’s a decent price to pay for their comfort
If I were you, I'd just buy 50 lakhs isn't a big amount if you're getting 1.2 after taxes and have 20L savings. Also your husband or in-laws shouldn't have a problem from financial pov with buying the house, your total asset - liability still stays the same only no matter if you buy the house or not. If they can't understand even this much no point in running after them explaining. About the wedding, you can make a decision to do a modest wedding with any other savings you and your parents might have left.
Makes sense yes. Thank you
I’ll suggest don’t buy. If you care about your parent you could always pay their rent if your brother is not interested.
Buying could cause problem in future.
If you are buying buy in your name. And just let your parent live there.
Yes, I am going to buy it in my name, and my parents will live in it, and they could also go to my brother’s house in some years if they want to, but that is not the plan for the next 510 years at least, so I think that would be a good investment
You can always invest in city where you are settling after marriage. If you have an existing home loan that time then your loan eligibility will decrease drastically.
If I would have been in your position, I would have taken a nice, cozy rented place for my parents.