Becoming a home owner is a dream most of us nurture. You want to turn this dream into a reality as early as you can. This is the reason why the number of young buyers in urban India has seen a remarkable increase in the past two decades. But, is it really worth the burden of a home loan? Are you mentally prepared for such a large-scale investment?

Here are certain things to consider before you invest in property:

Renting can help you save the down payment 

For the majority of the salaried home buyers, a bank loan is the sole funding channel. The loan tenure varies from 20-30 years, depending upon the monthly instalment. For instance, if your loan amount is Rs 50 lakh at an interest of 10.5 per cent for next 20 years, your monthly outflow will be Rs 50,000 approximately. Moreover, one needs to consider that a part of the property value has to be paid as down payment which is not funded by banks.

This makes it a very important point to understand that buying property at an early age requires a lot of commitment when it comes to finances and wealth management. It is better to save in initial years, and making the investment only when you are financially strong, and you don’t have other monetary commitments (car loan, personal loan, etc.) to fulfil. 

Renting helps you to be ‘liability-free’

With corporate culture seeping in the Indian economy, the workforce is continuously on the move, sometimes changing cities and most of the times, jobs. In fact, initial years of work experience might involve quick job changes for which you might need to travel to the different city. At such instances, renting is always a better option, unlike real estate investment which will be a liability rather than an asset as there will be no one to take care of your property in your absence.

Better investment avenues than real estate

It would be better for early starters to invest in short investment cycles to save huge sum over a period of time. The returns are decent and can be easily converted to liquid money whenever needed, unlike real estate investments. One should enter real estate market only when there is enough room for the investor to pay off monthly instalments as well as make other investments to be used in a crises situation.