Now that people have postponed their foreign trips, they all want to buy a house….

Let us see if you can afford a house:

– can you afford to pay at least 40% of the cost of the house as a down payment?

– can you afford to pay the EMI on just ONE salary while running your household ?

– will you REALLY save any rent that you are currently paying?

– what happens if you buy the house, and at the same time your wife gets pregnant and is advised bed rest?

– what happens if one of you quit a job voluntarily and one of you lose your job involuntarily?

– remember if you take a 25 year loan, how quickly will you really repay?

– how prepared are you for a loss of job coupled with a fall in property prices?

– do you know at what inflexion point of the housing boom you are buying a house?

– are you buying a house to live in or hoping that the property prices will double in 3 years time as it has happened for your friend?

– using immediate past data to predict immediate future data is a HUMAN disease, and you are human.

– if real estate prices were a NEVER coming down spiral, the BFSI would have convinced you that YOU should NEVER buy but PERMANENTLY stay in a rented house, they would own the house.

– do you have a parent who can step in and take the burden – or are they financially dependent on you?

– is your spouse supporting you with a whole heart or are you PUSHING your agenda on an unwilling wife?

– if things go wrong will your spouse stand by you or bug you with ‘I told yous’

– are you buying as a scoring point, because somebody with who you compete has bought, or you really need a house?

– is it an ego problem that you cannot stay in a Rented house any longer?

– have you asked your boss about your appraisal and also your spouse’s boss’s view on her appraisal and job prospects in general?

– are you over paid? be blunt. If you are and you lose your job…you may not find a new job easily…

– what happens if you are transferred to a different location? can u afford rental there as well as here and the EMI?

Soch lo….lots a thinking questions…you would have paid a fee if you had come to meet me with your queries….

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  1. Dear Subra Sir,

    By fulfilling all the above conditions, 90% of people cannot buy a house and you always will be staying in a rented house.

  2. Subra,

    I am ruing the fact that you did not give numbered-bullets. That would have enabled me to point out the bullets which are
    – gems which must be heeded before going for a house hunt.
    – irrelevant to buying a house.
    – Repetition of the same point again,again and then again.

    You also left out a couple of questions:
    – Are you okay being forced to vacate your house in a month’s notice as per landlord’s real/whimsical need (and NO this is not a vain-ego problem but real emotional and physical discomfort)?
    – Do you realize that the rent may increase year on year, but the EMI will be a function of interest-rate only?

  3. Buying a house do not mean you will go for any price and make your life hell.
    its same for equity:
    what happens when market goes to slowdown for 5 to 10 year or there is a war and everyone running for their lives,even war between different countries can cost you billions and your investment becomes 10% of what you have now and there are very few jobs in market also , how you will manage your daily expenses, investment and EMI’s , medical bills etc.
    life is about challenges and taking risk , nobody wants to face such a situation but one needs to prepare their best.

  4. Subra sir , one more addition -are you buying or getting bullied by in laws , parents ….. constant advice -In my case this is the unwanted advice I always received , well I have read some where but forget the source , but it sticks to me

    ” if every joker on street start telling you about a not to be missed opportunity , its better to run if you are in or show door politely to the advice giver”

    i really dont get this bullet -BFSI one -if you want to throw somelight on it

  5. nice thoughts…
    we debated a lot before putting our savings into buying a house & were happy to treat it as an expense. my parents live there now & perhaps one day we’ll move in & take over…
    someone told me the value of house has doubled in 3-4 yrs, but i still can’t view it as an asset (unless i can sell & buy something similar and still not lose in the transaction).

  6. subra,
    Once again a great article!!
    I agree with u on all points except the first one.
    Is it really possible to pay 40% ??
    As people who have 2 lakhs look out for 20Lakh property…n one who has 12 lakhs looks out for a 6o Lakh property…
    the amount of cash in hand raises ur expectations n always make u aim higher..
    Offlate I have never seen a saadhu settling down for 20Lakh property with 8 Lakh cash!!!

  7. Hi Subra

    I could see THIS Article comming…quite some time we have not read this from your side and were missing this TOPIC. I am great Fan and Implementore of Buying VS RENTING Inputs you have given to us REGULAR READERS.Expecting lot of Inputs as usual from Readers ….Most Defending BUYING At any cost. Interesting to visit feedback section

  8. @dhivya
    as in most cases of cities , the cash:cheque payment to be made 40:60. the cash is to be arranged by self, so 40% is real figure.

  9. Relevant article in right time for me. Recently we have finalized a decent home (90% complete) and we can pay full cash for it. However we are worried that it would wipe out all of our savings so far. I am a NRI and intend to return only after 10 yrs. We are not comfortable in renting either.

    Why are we buying. The city that we wanted to buy is going through recession and the rates are quite reasonable compared to any other big city in India. The house that we finalized exactly meets our criteria that we want to own in future possibly in retirement. Such type of projects are rare (ideal home) and have not seen any new launches meeting this criteria in the last 2 years. Definitely not sure about price and new launches of this type in future.

    Going through too much of analysis weighting pros and cons. Also lot of debate with family and friends. It is taking toll on me to let go such a masterpiece which is there anyway in our wishlist.

  10. @krish
    in 10 years a lot can change. dont commit now. a non-use house is an expense which will give u nothing as return. instead invest the money.

    After the birth of my daughter i bought her a house with 40% cash down and for the remaining 60% took an overdraft loan account of which 50% i paid within a year from debt proceeds. In 3 years the loan is over. Overdraft account is still open, as an insurance for emergency needs.
    People/colleague make fun of me for not buying a bigger house when was eligible for a much bigger loan, cant explain.
    Emi scares me.

  11. Yes I want to buy house property in all the metro cities of India and also among them is the dream place where I wanted to buy from my Childhood days , Luck By Chance Yesterday itself I visited my dream place.

    But I confessing few things taht I am an Unemployed with savings less than Rs.10,000.

  12. dear “nitin bourai”

    buying a house is not same as buying an equity,, what you said is correct but a guy with a networth of 20Lacs would never buy equities worth 40 Lacs !!! but he will surely buy a house costing 40 Lcas..!!!

  13. The heading should be never buy a house and live your life in constant fear of all the possibilities that could happen but seldom happens. What you do not understand that not taking a risk is the biggest risk

  14. Good Article, makes lots of sense.

    I bought a flat within my limits and all the things which are listed happened to me, single income, dependent parents. Took a call and against all advice sold it. Now happy again.

    What I feel, that people who have purchased a flat already are now biggest proponent of this hype.

    1. EMI does not increase- what you say of change in tenure /EMI when ever there is a change in interest rate.
    2. Not Taking Risk: Is taking risk for 9% of annualised return is worth? better to take it in equity where the rewards are more.

    We are merely puppets in reality market today. You point below takes the cake:

    if real estate prices were a NEVER coming down spiral, the BFSI would have convinced you that YOU should NEVER buy but PERMANENTLY stay in a rented house, they would own the house.

    Best of regards,

  15. Buying a house is a big decision and needs a lot of research in terms of interest rate, property details, lender shortlisting etc., Its like a dream come true and then you feel everything should be perfect and thing should go smoothly. Make you sure you do a preliminary check such as credit score which is one of the important parameter where your eligibility is considered. To know more you can also visit

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