6 Compelling reasons you must invest in a house in your 20s

Here’s why it is wise to buy a house in your 20s

Your 20s are the foundational years of your life. These are the years typically spent getting an education, laying the bricks of your career, discovering yourself, making goals, travelling, and doing a lot more. While you do all of these things, one crucial step is often overlooked yet essential: investing in a home.

Buying a house in your 20s is advice that you would rarely receive. This is because it is always assumed that taking on such a huge responsibility is practically impossible at a young age. However, if you are willing to widen your horizon a little, you will find that there are numerous advantages of investing in real estate early in life. Real estate can offer you a high return on your investment, ownership of a growing asset, financial stability, and the chance to leave behind a legacy for your loved ones, among several other benefits.

If you are still wondering is it wise to buy a house in your 20s, here are six compelling reasons that are bound to give you a push.

1. You can maximize your tax savings

You may see buying a house in your 20s as a major expense. But, in reality, it can lead to significant savings in tax. As you would have experienced by now, the tax cut at the end of the year can be a real blow to your overall income. An income that you are able to earn after spending hours and hours in the office. Would it not be great if there was a way to reduce your tax output and, at the same time, spend money on something worthwhile like a home?

Buying a home with a home loan can lead to significant tax breaks with deductions. You can save up to Rs. 1.5 lakh on the principal amount of your home loan under Section 80 C of the Income Tax Act, 1961. You can also save up to Rs. 2 lakh on the interest payable under Section 24 of the same act. And as a home buyer in your 20s, this would likely be your first home. So, you would also get an additional benefit of up to Rs. 50,000 under Section 80 EE of the Income Tax Act, 1961. All in all, this can be a great way to save your tax output and maximize your savings.

IDFC FIRST Bank offers a home loan with interest rates starting from only 6.5% p.a. The bank also offers a special processing fee of up to Rs. 10,000 plus GST for salaried individuals, and up to Rs. 20,000 plus GST for self-employed people. Please note that this is the maximum fee charged, and the amount may be much lower for lesser loan amounts.

When you combine these benefits with a home loan like the one offered by IDFC FIRST Bank, you can expect nothing but great savings.

2. You get inflation-beating returns

The Indian real estate market is prospering at a fast pace. There has been an increased global interest in India post-COVID-19, as international companies are now shifting their gaze from China to India. The cost of construction is also rising rapidly. All of these factors are likely to contribute to a high return in the future. Historically, real estate prices have shown a consistently high return. Combined with factors like large scale commercial and residential projects in metros, tier 2, and tier 3 cities, investing in real estate in your 20s can be a great way to enjoy high returns in the later years of your life.

3. You can create another source of income

Since you would likely have fewer family responsibilities or dependents at this age, buying a house in your 20s does not necessarily have to be for your personal use. You can also use it to create an additional source of income. A lot of people rent out or put their house on lease for a few years. This helps them develop an additional inflow of funds for themselves. The rental income can be used to pay off the home loan. You can also purchase a house and convert it into a paying guest house. There are many residential projects that have come up near office spaces and colleges in several cities. You can invest in a property in such a locality and rent it out to multiple students or working professionals at a time and earn money. There are various income avenues that can be created from a home, and you can pick a suitable option as per your suitability, purpose, and future goals.

4. You can retire early

Buying a house is a major milestone in your life. A lot of people rely on it for retirement. If you are able to purchase a home in your 20s, you may be able to retire early. A house is a stable investment. It is also perhaps the biggest asset you can ever own. Having a home to your name ensures your financial security. It guarantees your safety and can be instrumental in times of financial emergencies or uncertainties. When you buy a house in your 20s, you feel less burdened and can retire sooner. On the other hand, if you start planning a home purchase in your 40s or 50s, you may have to postpone your retirement until you are able to buy a home and pay off the loan.

5. It is easier to plan a big purchase right now 

Contrary to popular perception, buying a house in your 20s can be a lot simpler. Your expenses are comparatively low during this phase of your life. As you grow older, you would likely get married, have children, have age-related health conditions, ageing parents to look after, etc. All of these factors can contribute to your expenses and make it harder to make a real estate investment. However, your 20s is a fairly carefree period where your responsibilities and liabilities are minimal. Taking on a home loan at this time gives you a more extended repayment period. Moreover, with few other expenditure heads, you can also opt for higher EMIs (Equated Monthly Installments) and settle the loan sooner.

6. You have a financial cushion to rely on

A house can be a viable asset in case of a financial emergency. Regardless of whether you suffer a loss in your business, lose your job, or face a health emergency, you can always liquidate this asset and tackle the situation as needed. Life is unpredictable, and the sooner you build up dependable assets like a home, the more financial protection you would have. Buying a house in your 20s would translate to financial stability and security from the very start.

To sum it up

So, as you can deduce by now, the answer to whether it is wise to buy a house in your 20s is pretty much a solid yes! Buying a home early in life can help you create wealth and leave a legacy behind for your loved ones. The benefits of real estate investments cannot be stressed enough. Moreover, with fastrack home loan balance transfers from reputable banks like IDFC First, the journey to owning your dream home is a lot easier than you expect. All you need to do is visit the IDFC FIRST Bank website, apply for a home loan, enter your mobile number and other details, and the bank will get back to you. The process is quick, seamless, and can be done in a matter of minutes from the comfort of your home or office.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.