Why Did Real Estate Investments Work for My Parents and Why It Won’t for Me

Home buyers today are saddled with big loans and lifestyle compromises

In a time so long ago that none of us remember, probably because we were still chewing on our toys and crying for someone to feed us, our parents bought homes or built one. Families would buy multiple houses just because they had money to invest and because real estate investments were considered the best place for money to grow.

Here’s why real estate investments worked for the older generation…

The phase above, was the real estate boom between 1988 and 1994, when people saw the value of their go up by 10 times followed by a dip, but picked right back up between 2002 and 2012.

That was awesome. What’s the scene like, today?

Today’s scenario is quite different. With the constant appreciating prices of housing over the years creating a down-payment corpus, cost of getting a loan, and then returns being lukewarm (to put it mildly), many now prefer to rent a home rather than sinking in a sea of debt.

Why would you, when you could rent a house worth 1.90 crores for just Rs.33,000 a month? You save a ton of money, and you have the option of moving out to a new location without being restricted to one property or place.

So, What else can you invest in?

While real estate was probably a great investment back in the day, today’s statistics will tell you otherwise. The market is seeing a lot more sellers than buyers of houses because most people are putting their money where they see real returns — Equity mutual fund portofolios or in inflation beating better than FD products. You can also invest in goal-based investment portfolios for any specific financial / lifestyle goals you might have. They might be a yearly vacation or Kid’s education or a car upgrade! It is really that simple.

Does this mean you should never bother buying a home?

Not necessarily! This situation probably will change, because history has shown us that every market goes up and down in phases, but while it is the best time to rent… you can probably put off that buy decision. It might be best to look at investing somewhere that will bring you better gains, and may even aid your future dream home.

Originally published at www.upwardly.in on December 1, 2017.