5 Questions To Ask Yourself If You Are Planning To Be A Young Home Owner

There are a growing number of home buyers who are young, and a few start off just as soon as they enter the job market. Higher starting salaries, increasing awareness, savings and investment are motivating a large number of young people to go for investments in property in India.

If you are one of them hunting for homes to buy as opposed to pub hopping, there are some means to prepare yourself. Before going in for a commitment as long and serious as a real estate investment, here are some of the questions you should ask yourself:

1. Why are you buying?

The human resource departments of many companies encourage their employees to go ahead and take home loans. A few others go as far as giving bonuses for those who do. This is a way of savings tax for them. If this is a motivator for you as a young professional, do not go ahead and make an investment just because of this encouragement. Though tax breaks are a good enough incentive, the reasons for a real estate investments should be much stronger. A few of them are needed for a home, for mitigating rental stress and also because of genuine interest in long-term and big ticket investments.  

2. Do you have time to spare?

A real estate investment would mean two things. One of them is spending months or even a year on location and apartment hunting. If you are a busy professional, be ready to spare every weekend patiently for this. If you regularly travel out of town and it is tough to find time, real estate investment may not be for you. You cannot make these decisions in a hurry and without searching enough. After buying a home too, you need to spend considerable time maintaining it.  

3. Are you financially strong?

You might have a very well-paying job but ask yourself how strong is your company and the sector that you work in. Real estate is a long term investment. Your job should be strong enough to keep you going for many years.

4. How good are your savings?

Do you have enough savings to make a good amount as an upfront payment? If you are putting very less money as equity, the debt you could pick up might come at a very high interest rate. It might be wiser to wait a few years, save enough and make the investment. A few others tend to borrow equity money from family and friends. Ensure that you have one such option so that the EMI does not end up eating away half your salary.

5. Do you have a mentor?

If you are new to the market, there is the chance that real estate agents, brokers and builders will play hardball with you. It would be a good idea to follow the footsteps of an older and experienced family member or a close friend with similar profile as yours to guide you through it. You will be able to get good knowledge on locations to invest, the returns and also good references to decent brokers and agents.

(The writer has been working as a business journalist for the last nine years, and has covered beats across banking, pharma, healthcare, telecom, technology, power, infrastructure, shipping and commodities)