Homebuying For Self Use Or Investment? The Rules Of The Game Are Different

Most Indians buy homes not so much for investment, but rather for self-use, which incidentally should not be seen from the prism of investment. So, before you put your money in real estate, ask whether it is better to stay on rent or buy a home for yourself. And should you decide to invest in property, compare it with other options, such as fixed deposits, gold, bonds, and equity

- Shoaib Zaman

Real estate holds a unique allure for Indians, and Bollywood has portrayed this well. Over decades, cinematic narratives have woven tales of families clinging on to their ancestral lands, starry-eyed individuals chasing the elusive dream of homeownership, and the gritty battles waged against unscrupulous builders and land mafias. Films like Do Bigha Zamin, Gharaonda, Khosla Ka Ghosla, Love Per Square Foot, and Gulabo Sitabo are some of the movies that serve as a testament to the enduring relevance of real estate in our collective consciousness.

Whether it’s residential properties, commercial spaces, or land parcels ripe for development, the realm of real estate beckons investors with promises of long-term growth and diversification.

But should you invest in real estate? To answer that question, you would need to answer another one: Are you looking at this asset for self-use or purely for investment? A survey by FICCI-Anarock released in March 2024 found that 64 per cent of the 5,000 parcipants across 14 cities had bought real estate for personal use.

The survey also revealed that real estate is the most favoured asset class for investment, with 57 per cent preferring to invest in it. So, let’s delve deeper into both scenarios—buying for personal use or buying for investment purpose.

End Use

You would need to evaluate if renting a house is a better option than buying one. However, the choice hinges on several personal and financial factors and not mere calculations (see Buy Vs Rent).