On Teachers’ Day, we appreciate and acknowledge the role teachers have played in our lives and look up to them for inspiration even when it comes to taking financial decisions later in life. HT.com spoke to a few teachers who started off by renting a property first and finally invested in one after they had built a corpus to make a substantial down payment for a home loan.
Here are some real estate investment learnings from teachers that you may want to consider.
According to 29-year-old Prathik Desai, who is a part-time faculty member at a university in Bengaluru, one must save up for a decade first before finally investing in a property. There is no ‘one shoe fits all answer. It depends on one’s list of priorities,’ he says.
“As a professor, owning a home is a distant dream unless you have a PHD degree or a well established job in a private university. In the absence of these factors, one must save up for over a decade first,” he said.
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Desai, who is also a chartered accountant by qualification, plans to build his dream home in a quiet Tier II city or on the outskirts of Bengaluru within a six-year timeframe. His plan is inclusive of financial contribution from his partner.
He currently rents a 2BHK in Kasturi Nagar neighbourhood of East Bengaluru against a monthly rental fee of ₹18,000. Terms of his 11-month lease agreement included a security deposit of ₹50,000 and a rent escalation clause of 10% upon renewal.
Desai believes the popular question on renting versus owning a home does not have a “one shoe fits all” answer. It depends on one’s list of priorities, besides clarity on factors such as choice of city of residence in the long term, end-use versus investment income and so on. Furthermore, it is not easy to measure benefits such as availability of loan against the property as collateral in the event of an emergency, he pointed out.
Lessons from Mumbai
For 42-year-old Divya Narang, a professor with a college in Mumbai, most teachers who come from other states to take up teaching assignments in Mumbai rent an apartment first. “Once they are settled on the personal, professional and financial fronts, do they think of owning a house in a city like Mumbai, perhaps the most expensive city to own a piece of real estate,” she said.
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Narang has been residing in Mumbai for the last 13 years but it was only six years back that she and her husband decided to invest in a property. “The ultimate goal I guess for every Indian is to own a house rather than stay on rent,” she adds.
Start early, says a Delhi-based teacher
Like others, Sunil Guliya, a Delhi-based Physics teacher, decided to buy an apartment after nine years of settling in his profession. “I made a down payment of 50% and took the same amount as a home loan. My advice to others is to get on to the investment bandwagon as soon as you get a job. Plan for a house early as your chances of getting a higher home loan amount are better,” he said.
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Check for the location. “The school where I teach is a stone’s throw away from my apartment. I didn’t want to spend hours commuting and hence I chose a property that was close to my workplace,” he adds.
With inputs from Shakshi Jain in Bengaluru and Mehul Thakkar in Mumbai
