Buying a house is one of the biggest financial decisions in a person’s life. It is emotional, aspirational, and deeply personal. But it must also be financially sensible. A home is not something you buy on impulse or because everyone else is doing it. It is a long-term commitment that affects your lifestyle, liquidity, and future goals. So how do you decide when the time is right? The first question to ask yourself is simple: Am I going to live in this city for the long term? If your career is stable, your family is rooted in the city, and you do not expect to relocate to another city or abroad, then buying a house makes sense. Real estate works best when you stay in the property for a long time. If you are constantly shifting locations due to career, best to wait and then buy later. The next factor is your family plan. Many people buy a 2 BHK in their late twenties or early thirties and later realise that a 3 BHK would have been a better choice. Families grow, children arrive, parents move in, and priorities evolve. If you have decided to start a family, if you prefer a specific school for your children, or if you want a society that offers enough recreation and amenities, you must think long term. Planning the right size of the house and society is essential. Upgrading later often becomes financially stressful and messy. So buy a house with a long-term perspective. It is important to understand that a house is a poor investment if your intention is only to look at it as an investment. When you calculate the Internal/Intrinsic Rate of Return (IRR) after including maintenance, society charges, property taxes, brokerage, and registration costs, the returns look weak compared to other asset classes. The situation becomes even worse if you buy a property on a loan purely for investment. Buying a house for investment with borrowed money is a financial disaster. Paying interest for fifteen to twenty years on an asset that generates low returns does not create wealth. It creates financial stress and actually gives negative returns after all costs and inflation. However, buying your first house to live in is extremely important. It is not an investment. It is security, stability, and peace of mind. Owning the roof over your head reduces financial stress, gives your family stability, and protects you from rising rents. A home is part emotional comfort and part financial foundation. One financial rule should always be followed. Your home loan EMI must not exceed 30 percent of your monthly income. Anything higher affects your lifestyle and other long-term goals such as your children’s education and your retirement. In summary, buy a house when your life is stable, your family plans are clear, and your finances are strong. A well-timed home purchase is not only a transaction. It is the beginning of a secure future. (The author is a Chartered Accountant and CFA (USA). Financial Advisor. Views personal. He could be reached on 9833133605.)
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