Let me start with a story: A friend of mine had always dreamt of buying a house, something he can call his own. He was living on rent in a house close to his office without giving it much thought. After tasting success in his career, he bought a house and now has to travel 40 km daily to reach his office from home. This affected his productivity and now he has to choose between getting a new job or a new house.
Can you imagine his mental and physical stress? I am afraid that this is the exact situation many Indians are facing now.
While renting is the way to go, some of us are brave hearts and buy our own houses. It may look like you are making a great stride towards investment, but how does it impact your career?
Buying a House and Impacts on Your Career
Let us find out how buying a home in India today impacts your career :
Limited Job options
Most people in India have careers on the go. You can have a job in Kolkata today and in Bangalore tomorrow and completely relocate to Mumbai the following year. Now if you buy a house in Kolkata, you will be stuck there for a long time, and this will eventually not let you take up job promotions in different cities in the country.
Chances are you have worked hard to land that dream job in Mumbai, but you will have to let it go because of your house. In the event you are already established and know that you will be based in the same city for a long time, it makes sense to buy a house but otherwise, a non-established and relatively inexperienced person buying a house in the city where their stay is unpredictable; it is not a risk worth taking.
There is always an advantage when you rent as opposed to buying a house. Anytime your career takes you elsewhere, you can just shift anytime you want. But if you’re a homeowner, you have to wait to rent out the property or sell the property before moving on. That is an additional headache on top of relocating to a completely new city and job.
If you have taken a home loan, there would be an additional burden of paying the rent with Home Loan EMI. Though you can give your house on rent but rental yields are only 2%-3% while interest rates are much higher on the home loan.
You will always think twice before relocating if your finances are already burdened with EMIs. That takes us to another point-
Also Read: 8 Types of people who never win at money
The financial burden on career
For a young person just starting out in a career, what should be the most important priority in their lives? It is savings and investing! If those savings and investments are all spent on buying a house in a city where housing is already sky-high, and there is no guarantee of a stable job, then they are doomed. When you buy a house in India, you have to be mindful of so many things.
Whether is the registration, stamp duty, brokerage costs along with bank fees and cooperative society formation, the initial investment while choosing a house can give anyone the cold feet. To add to this, think of the maintenance and interior costs!
These are the main financial decisions that involve buying a house, and all of these depend heavily on a steady income from a stable career. When at a nascent stage, why put so much pressure on your career?
Down payment and Investments
A lot of people consider buying a house as a good investment. But with the ever-growing market, can we really predict the appreciation and depreciation rates these days? Think of the many ways you can use the down payment you put in that tiny apartment in Delhi and be richer for it. Invest it in stocks, mutual funds or put it in savings and you can actually help your career and get an additional income rather than blowing it off completely on one particular area.
We all know the primary tenet of investing is to diversify your earnings in a way that your money is distributed into steady investments over the long term period. If you put all you money on personal property, your finances can sink it in no time!
The most significant advantage of this move is the fact that no matter what happens, there is no negative impact on your career. Even if you relocate or change jobs or become an entrepreneur yourself, investments will give you interest, and you will continue gaining from the same.
We Indians are quite emotional, and when it comes to our home, we always have a special place in our hearts for it. We do so many pujas and ‘havans’ to make sure our homes are safe from the evil eye. Most of us associate owning a home to security, safety and a sign that we have made it big in our lives. It is something we can call our own and gives us a sense of belonging. It is safe to say that having a fixed place can make one too comfortable. You might not chase excellent job opportunities that take your career one step further to success after establishing your roots in a home. This kills the drive to have a thriving career.
There is also the flipside of the coin where your career might have come to a standstill, and you might need to move for better chances but leaving a house you have invested so much money and time in has adverse psychological effects. There is no happiness in uprooting yourself from a place you are so connected with. Therefore there is conflict within and the dissonance is felt in your career.
Buying a house is a life-changing decision, and we must take it knowing the consequences full well so don’t be like my friend! Consider our future goals and what vision you have for a financially secure life before jumping the bandwagon and buying the first beautiful house you see!
A house is where we eventually settle at the end of the day, and it affects our mindset when it comes to having a productive and efficient career too. We must never forget that the ‘Makaan’ is only stable when there is enough ‘Roti’ and ‘Kapda’ to complement it, and for that, you need to maintain a career that is always on the rise!