Smart Investment Tips for Young Property Buyers

ARE YOU TOO YOUNG FOR MAKING INVESTMENT IN PROPERTY?

Seeing one's nameplate on the door is an individual's ultimate dream. However, there are several factors that determine the time to go for the big buy. One of them is the age factor. While it is an important criterion for the bank and financial institution, to determine your home loan duration it is also very important to calculate your saving for the initial down payment amongst other things.

WHAT YOUNGSTERS NEED TO CONSIDER

Planning the budget for a home is of paramount importance for a first-time buyer.

1) For the first time, home purchase set aside a budget that is affordable and in-line with your career growth and pay scale.

2) Ensure that you have the saving of up to 20-25 percent of the value of the house, prior to purchase, while the rest could be from a home loan.

3) Maintain sufficient balance in your saving, for emergencies and other investments like marriage, family, vacations, further education, vehicle etc.

While most banks provide loans of up to 85 percent of the property value, youngsters need to first check the EMI that they would be comfortable paying each month.

THE PROS.

Some of the advantages of buying a home at an early age are:

1) It allows youngsters to invest in their future, as it provides them with an asset that can be sold when they are ready to move on.

2) Youngsters tend to learn better spending habits. It changes the young buyer's decision-making process, as they learn how to save and spend money in the most effective and efficient manner.

3) As home buyers get tax credits, youngsters can use it for lowering their tax liability.

4) Owning a property can provide a steady source of income for a young person and also offer him/her insurance against any setback.

THE CONS.

However, exposure to property investment too early in life comes with some inherent risk like:

1) Young investors may not be able to relocate in the interest of a career if they are tied down to one location due to property investment.

2) There is also the temptation to overshoot budgets, resulting in steep EMIs.

3) Social pressures lead to overshooting of budgets, resulting in steep EMIs that leave too little for other needs of a young couple.

You can click here for HOME EMI LOAN CALCULATOR

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