Every individual dreams of buying or building a house rather than living a rented one. Real estate is a good investment and it is believed that the sooner you invest, the higher will be your profits from the property.
When should you invest in a home depends on various factors like income, risk appetite and priorities.
The Age Factor
Your age will determine how much time you have to repay the loan. Home loan repayments can stretch to many years based on the amount borrowed and your remaining earnings years.
For example if you are 30, you have 30 more income generating years ahead of you, giving you abundant time to make an investment on a house. If you are successfully self-employed, you can buy a home even if you are over 40. Income generation is not restricted to the traditional 60 years.
Suppose you are over 50 or 60 years old, and already have a home, it need not stop you from buying another for investment purposes. In fact your credit score will be higher and it will be easier to avail a loan with existing property as collateral.
Also, your risk appetite will be lower for speculative investments like equity shares. This makes your investment in property an ideal decision. Your understanding of the market will also improve to make a strategic investment.
The right age for buying a house for yourself
Shelter is one of the basic needs in human life. Now the right age to buy one that you can call your own, depends on personal circumstances.
For example, you might have an inherited house property and you do not feel the need to purchase a different one. Similarly you can choose to live in a rented house throughout your working years if you have a job that involves regular location transfers. You can probably choose to buy a house just for retirement.
There is no "one size fits all." There is no ideal age that will meet everyone's requirements.
Some factors to consider
- Home loans have tax benefits that you should consider if you plan on taking one quite early in your life, like when you are 25.
- Long term home loans are easier to get.
- If you have to move out to a different location, you can rent out your house for an extra source of income.
- After 30 is considered ideal as you will have had sufficient savings, a more stable career and changes of you getting a good home loan deal is higher.
- If married, you can plan your home investment jointly with your spouse.
- If you plan on buying a house after 40, you may not even need a home loan or a smaller loan based on your income compared to the age bracket of 25-30 years. Also, many of your personal financial responsibilities will also be sorted by then, making it less burdensome.
- Take your retirement life in consideration before investing in a property. If want to move out of the city in your retirement years, planning for the same early on is advisable.