Top 10 Home Buying Myths: Busted

Buying a home is perhaps the biggest investment you will be making in your lifetime, but it is shrouded in myths and misconceptions. From having a fixed ‘right age’ of buying a home to loan procedures, our misunderstandings about buying homes are too many. Before investing in a home, it is important to clear any misgivings you may have about it. We debunked the top 10 home buying myths so your home buying experience is hassle-free.

Myth 1: Renting is better than buying

One of the biggest myths surrounding buying a home is that renting a home is better than buying. This generation of youngsters believe buying a home would weigh down their spending capacity. They believe that investments in stocks and bonds can yield better results than real estate. However, real estate purchases are performing asset investments. A home either can generate rental income in the long term or help cut down rent in the short term. Homebuyers can also enjoy long-term capital appreciation. On the other hand, the rent you spend on a dead investment doesn’t generate any returns. Though you may enjoy a small HRA component in your salary, renting isn’t as glamorous as they make it seem. Another factor is the age of the home buyer; as the younger generation grows older they may crave a sense of ‘settlement’ that can only come through homeownership.

Myth 2: RERA covers every project in the country

The Real Estate Regulation and Development Act was introduced in 2016. It brought a form of discipline to the real estate industry in the country with rules for builders and clear guidelines for home buyers. RERA brought home buyers relief as it was a safety net they could rely upon. However, it is a less known fact that RERA applies only for projects that cover 500 square meters and more or 8 units and more. Also, the builder is required to register themselves with RERA provided their project meets the size criteria. The onus to check whether the builder is registered with RERA lies with the home buyer.

Myth 3: Only investments in metro cities are good

Investing in a metro city comes with its advantages. Conveniences, connectivity, proximity to the workplace are all pros of investing in a tier-1 city. However, the cost of doing so lies heavy on the buyer. The appreciation rate of metro cities is also very slow. It is interesting to note that Tier-2 and Tier-3 cities on the other hand have lower prices and a rapid appreciation. People investing in micro markets or emerging markets enjoy the long term benefits of their property’s appreciation.

Myth 4: Buy the largest and costliest property you can afford

Just because you have the spending capacity, or are read eligible for a bigger loan amount, it doesn't mean you have to invest in the biggest and costliest property you find. It would be wise to analyze what your current needs are, and make a buying decision based on that. This is especially true for buyers looking to invest. A cheaper home in a tier-2 city could give you better returns than a large home in a metro city. After all, every property experiences appreciation.

Myth 5: Real estate investments are risky

Almost every type of investment comes with its own set of risks. Be its stocks, bonds, cryptocurrency, or real estate, they all come with their risks. However, real estate is one of the safest investments you could make and the associated risks are much lesser compared to its counterparts. It is a given that before you invest you should thoroughly investigate the builder, the project you are investing in, the deeds and documents, and costs. The risk of construction delay plagues the real estate industry, however, it is a risk that is avoided with reputed builders.

Myth 6: A big downpayment is required to buy a home

Though banks demand that homebuyers make a 20% downpayment for an 80% home loan, times have changed. Personal loans, jewellery loans, and downpayment loans are a reality now that make the 20% impractical downpayment unnecessary. 

Myth 7: Under construction homes are more pocket friendly

Though under construction homes may seem cheaper than ready to move in homes at the outset, the hidden costs of investing in an under-construction home are many. Investing in an under-construction home means paying your rent for a longer duration and the risk of construction delay. There is also the off chance that the builder doesn’t provide all amenities they initially promised to deliver. 

Myth 8: You get the same amenities in all projects in the same locality

The amenities you get during possession are dependent only on the builder you have chosen. Not receiving the promised amenities is a common complaint many new home buyers make. Choose a good and reputed builder so you step into your dream home without any compromises. 

Myth 9: No-EMI-till-possession helps cut costs

Subvention schemes or the no-EMI-till possession schemes may initially seem like they save you money. But, you may only end up spending more at the end of your loan repayment journey. It would be best to weigh the pros and cons of the subvention scheme before you commit.

Myth 10: If the ads look good, the builder should be good

Advertisements and marketing is part of every real estate project. Don’t let the quality of the promotions and offers sway you. Take your time and research the builder well before you make any decisions.

Home buying should be a pleasant and rewarding experience for every buyer. With these myths busted, we hope your journey to your new home is a great one too!