We all dream of purchasing our own home, but is there a particular age that is perfect to invest in a property? Experts believe the right age to invest in a property is between the ages of 30 and 35. However, this doesn’t mean younger people cannot invest in property. Buying at an early age is good too. No matter what the age of the buyer is; a property will always remain as an asset for the family. With average salaries going up, it is no wonder that more individuals are better able to afford home loans.
However, experts consider the 30-35 age group better equipped to purchase a property. This is because; at that age most individuals would have saved up to 30 to 40 percent for the home loan down payment. Also, since in your 30’s you have at least a minimum of 6-8 years work experience, you will be better equipped to handle regular EMIs.
Here are some pointers for 20-something home buyers. These pointers will hold good for property buyers between the ages of 30 and 40 as well.
- Have an emergency fund that covers 8-10 months of your monthly expenses that also includes your home loan EMIs. The emergency fund is very useful as it provides a shield during periods of job loss. Planning for an emergency fund also ensures that you will not dig into your savings during periods of financial stress.
- Consider having a Life cover (term plan) insurance. If you are unmarried, your Life cover should cover at least 125 percent of the total home loan. For those of you who are married the insurance plan should cover 200 percent of the home loan availed.
- Do not prepay the loan before the completion of 5 years. Home loans offer great tax benefits and if you prepay your home loan within 5 years you will lose those benefits.
- Your EMI should not be more than 30 percent of your current drawing salary.
- Try to save an amount equivalent to your EMI by investing in financial assets. These investments should be made for at least 5 to 6 years. Once you save enough, you can use this amount to pre-close your EMI.
So what happens if you are a 40-something property buyer? Most experts consider this age of property purchase, the later stage. However, buying at this stage has its own advantages. At 40, most buyers would have planned and saved a good amount towards buying a property. This amount might cover a huge percentage of the property cost or even the entire property cost, freeing the buyer from opting for a home loan. This can be done if you start planning in your 20’s and 30’s. However, investing in a property at the later stage could impact your retirement plans.
With every age group, the most important aspect is planning. Good planning can help you achieve your goals no matter what age group you fall into.
Our advice? No matter what your age is, if you plan on purchasing a property, plan ahead. This will help you achieve this goal effortlessly.