When I was 25, I bought the house that I grew up in from my parents. It was probably the scariest thing I ever did. I remember the loan officer looking quite amused because I read every.single.word in the loan agreement before I even signed a single page. He said that he had never seen a customer do that in his entire career. Little did he know that I was scared shitless that I would be signing my life away with this purchase.
I bought it partly to reduce the burden of paying two mortgages on my parents (they already moved to a new place at that time), and also because I thought I was ready to settle down and start a family. It was also because I didn't know any other reliable method to invest what little money I had. I still don't.
Turns out, Life had other plans for me. The long-term relationship I was in had died, while I was stuck with a house I bought for a life that I didn't even have. Hmmm.
It isn't easy owning a property on a single income, particularly when your income is just a bag of peanuts. My hometown had and still has lower than the national salary average, so I didn't make much at that time. Being an impressionable young adult, I did feel envious of friends who could go shopping and travelling while I had to set aside a third of my income for my mortgage installments.
Fast forward to five years later, the same group of friends I had envied before are now complaining about how they can't afford houses these days.
Do I feel smug? Slightly. I am, after all, just a human being.
But I do want to be grateful that I had the opportunity to purchase a house that I could afford, albeit barely, and that the opportunity proved to be a wise decision. I was fortunate that my parents didn't care much about profits when they sold the house to me. I was also unbelievably lucky that the bank approved my home loan, despite me being young and unmarried.
The area where my house is located is booming now, with new roads and townships built nearby, and if I were to sell it today, I could probably net a little profit. My house is my nest egg, for times when I need a lot of money (e.g. start a business or continue my studies). I wouldn't recommend selling your house to finance your wedding though. A wedding is not an investment. Your marriage is.
Most people think of properties as a way to invest, but not many realise that owning a property will cost you more than just paying off the loan installments. You'll need to pay local property tax every year, and you also need to pay to maintain the house in a good condition. Electrical wirings have to be checked and/or replaced every ten years, for example. But it is worth it, especially if you can double or even triple your initial investment in just a few years' time.
Interest rates are low right now compared to five years before, at least in my bank. My loan has 4.75% interest (BLR was 6.75% at the time of the purchase) while these days, most banks offer 4.2% (current BLR is 6.6%).
So if you're asking my opinion about the right time to buy, the time is NOW.
The Geek Goddess
P/S: Please consult your financial consultants or institutions before investing in anything. This post only serves as an opinion piece and cannot be used to support your decision to invest. I will not be held liable for any losses you may incur after reading this blog.
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