3 Ways To Buy Property Before You Cross 30!
With rising incomes and limited tax saving investment options, the young generation is now moving towards investing in real estate. The trend shows that there has been a substantial increase in the number of young home buyers whose average age has dropped from 40s to 30s. This indicates that the young professional is planning early to avoid getting trapped under financial burden later on when his family grows. Early retirement planning ensures a much sweeter retired life. This also gives ample time to those who plan to invest in second property, an upgrade for self use or for investment purpose.
Tarun Rai, a 26-year-old blogger, is all set already to ink a deal for one of the premium properties in the national capital region. He is investing in a 5-BHK property which is priced at Rs 1.2 crore for which he has ready cash for down payment and also, has a loan approval in place.
Surprised? Here's how he managed to put together the hefty down payment and an approved loan for an expensive property:
Been a disciplined investor
Investing in certain savings instruments can be crucial in helping you smartly saving your money for future investments. These include Recurring Deposits (RD), Systematic Investment Planning (SIP), Mutual Funds, Infra Bonds. Rai, who began earning through his blog beginning from his college days, ensured that a fraction of earnings will go as savings. With this practice he was able to accumulate a considerable amount through six years of prudent financial planning. He maintained a 60:40 ratio even when his income increased exponentially after three years, along with investing in various other tax-saving modules.
Maintained the CIBIL score
For a loan approval, Rai made sure he maintained an attractive CIBIL score. For this, he applied for two car loans and repaid them before time. Apart from this, he maintained his credit cards and paid outstanding amount before due dates, not just to avoid penalties but to indicate that he had steady income to support the equated monthly intallments (EMIs), bills, and card transactions.
Invested in affordable properties
Before investing in a property of his choice, Rai invested in several small-ticket-sized properties by reputed developers at a start of his career. He made money through real estate cycle where buying and selling at the right time made him cash rich.
When dealing with private developers, he opted for construction-linked plan in which he was required to pay just the 10 per cent of the property every time. Here, he was the co-applicant in the home loan, while the property was in the name of his mother. He managed to do the part payment of the loan, which brought down the total loan tenure by 10 years. Simultaneously, he chose properties which were close to possession and benefited him immensely when he sold off the property after completion.
Factoring in the point that he is not the sole earning member of the family and only pays part of his income for household expenditure, Rai has an edge over other investors of his age. The path that Rai followed though is unique, it is in no way impossible for others to follow. All that is needed is discipline in followinng a strict budget that ensures dedicated savings.