As a real estate broker, I get asked this question at every social gathering. So I decided to write a small blog to educate my network. A person needs to answer few basic questions to themselves.

  • Do you already own a home already?
  • How much down payment have you saved?
  • Are you OK to move on rent once every few years?
  • Do you want to raise a family?
  • Are you OK paying someone else’s mortgage?

If you already own a happy home in Mumbai and not looking to expand your property portfolio, then buying a second home does not make sense. If you do not own a home, then are you OK to move every few years from one home to another? Most bachelors and spinsters are OK to move. They live for years together in suitcases and are not bothered with it. Nuclear families do not wish to move often. They have their child’s education to be worried about. Families do not like to uproot themselves from one home to another.

Buying an Apartment in Mumbai is an Expensive Affair

Do you have at least 25% of the down payment as well as additional 15% miscellaneous expenses in hand to put in for purchase of your property? Do you have enough to pay the EMI? Are you OK to pay EMI’s if you lose your job or suffer a loss in your business? If yes then buying would make sense. Otherwise renting is a better and cheaper option.

Prefer to Rent a Flat in Mumbai?

Rental policies keep on changing. New rules come and old rules are washed away. Owners are skeptical to give their expensive properties to people. The owner can vacate you anytime by giving a notice. Renters do not have any say in the society matters of the property. They have to compromise regularly as per the whims of the society or the property owner. You have to deal with all this when you are renting.

You are paying someone else’s mortgage when you are renting a flat rather than paying your own. After years of paying rent you realize that you have spent Lacs paying your Landlords EMI, when you could have paid yours. If you are willing to accept this harsh truth then there is no harm in renting whether you have the initial corpus or not.

Rather invest in financial instruments!

The other argument is getting better returns over time in other financial avenues instead of real estate. Keep in mind financial instruments have risks and are subject to market fluctuations. This is the disclaimer in all forms and paperwork you sign. You are also betting on your principal. You can lose that also. Yes you can also make a lot of more money if you bet right. But, what about your personal home. It is not an investment. It is a home! A home has infinite value when you are living in it. You can’t put a figure to it when you are raising a family and making memories.