Real estate has been booming in India for over the last two decades. What triggered this boom? The overall economic upturn of course, which led to increased wages and earnings in general, and a multifold salary increase for the middle and top management in India. Buying real estate has always been a priority in India and higher earnings translated into sale of residential property at an unprecedented scale. Proliferation of housing loan companies, apart from banks, also helped the cause of real estate. Working couples who are earning good salaries have also been looking at real estate as an investment, especially with the government offering income tax rebate on repayment of housing loan.
On the other hand a large number of working people have been relocating every 2-3 years, thanks to frequent job changes, a recent but accepted trend in the corporate world. This trend has meant ever increasing number of house renters. Do these renters aspire to become home buyers? Is buying a home only about availability of financial resources? Actually, there is more to it. Let’s look at 8 top reasons why home renters should become home buyers.
#1 Rental living is not inexpensive:
Most home renters actually complain about ever rising house rents, as also security deposits and brokerage, which may be payable every 11 months. They are aware that house rent is an avoidable expense and not an investment. Paying rent for several years adds up to quite a large sum of money which can be saved by opting to buy a home.
#2 Availability of home loan:
Offering home loans have become a key activity for almost all banks, both public and private, apart from that of several NBFCs. In fact for some NBFCs, such as LIC Housing Finance, Dewan Housing, Indiabulls Housing and several more, providing home loans is the primary business. Almost all residential projects, big or small, have an arrangement with a few home loan providers to offer loans to home buyers. Loan amount is able to take care of 80% of the total cost of a home, and can be repaid over a period of 15 years. Provision of income tax rebate on home loan principal, makes the proposition further attractive.
#3 Appreciation in value:
Why is home buying called an investment in the first place? Simply because it provides a regular rental income if not self occupied, or saves us the expense on rent. Secondly, a house property appreciates in value which is on an average 10% to 20% per annum. Of course there are exceptions wherein people have doubled and tripled their property investments in a few years, and a few have made lower than 10% as well. But, decline in a property’s value over a medium to long period has been unheard of in India. So, as an investment too, buying a home makes good sense.
#4 A Gypsy’s life:
A majority of renters are asked to vacate the house every 11 months, as a majority of home owners traditionally like to play safe and avoid even perceived risks. This starts another round of house hunting, which gets frustrating when they don’t find any accommodation to their liking. Besides, moving the entire household so often becomes stressful for the whole family, especially the home maker.
#5 A neighborhood not agreeable:
Even as you accept your fate, and go through yet another round of relocating your entire family; you may end up in a new locality and a neighborhood that is not of your liking. This may happen simply because of non-availability of rental accommodation at that time. The new locality may be farther from your work place or your child’s school, may not be well connected, or it may lack a market for even essential shopping.
#6 Lacking desired amenities:
Even if you manage to find an accommodation in a locality of your choice, or in a new housing complex or a specific building that your family gets to reside-in may lack amenities that you have been used to. For instance, a swimming pool or simple amenities like a park or children’s play area may not be available. Many home renters complain about not finding a closed garage or even an open marked space for their car, due to which they have no option but to park their vehicle out on the street.
#7 An inadequate interior:
A rental accommodation, more often than not, is either unfurnished or has just bare minimum furniture. In fact, rented houses rarely have adequate wood work in the form of built in cupboards in bedrooms or cabinets in the kitchen. A home maker invariably gets stressed with such paucity of storage space. It is not easy to purchase additional furniture, for it may not fit into another house, which you may move into the next time. Even if you wish to fix air conditioning at your own expense, the home owner may be reluctant to allow it.
#8 You remain an outsider:
A home renter is never considered as a part of the community, for everyone knows their stay is short. Friendships with permanent residents could thus be superficial and transitory. You are not able to contribute to the housing society since you can’t be a part of its management committee, being a home renter and not owner. This situation may result in emotionally stressing your entire family over the years.
There are several good reasons for home renters to become home buyers. The decision to become a home buyer is obviously not just financial. Owning a home and doing up the interiors to match up your taste is undeniably exciting and is sure to be deeply satisfying. In fact, it gives the whole family a sense of belonging in the community and improves quality of life. So all home renters out there, go look for a home and take the plunge sooner than later. That’s the greatest gift you could give to your family.