The World is full of overbearing and nosy people who believe they exist for the sole reason of poking into others' affairs and to enforce the standards of what they believe are the "accepted norms" of "society" on how to lead one's life. Their primary weapon of choice is irritatingly repeated questions, like "What do you want to do in life?", "When are you getting married?", "When are you having your first kid?" and lately in these days of constipated Globalization, "Why aren't you buying an apartment??" Tired of answering the aforesaid question, I here present my side of the argument why I think dishing out insane amounts on a concrete box in the sky and then toiling away the rest of my life to pay for it is not really all that cool. I attempt to do so by refuting the claims people make in favor of buying a flat in their attempt to try to convince me otherwise. (of course, none of these applies to the people who have extra cash lying around to splurge on flats. My arguments are strictly from a "monthly-salary-EMI-paying point of view)
"You own the Apartment! You OWN it!"
No you don't. Nobody really "owns" an "apartment", simply because there is no real thing as an apartment. It is an illusion, only as real as a confirmed Tatkal ticket booked on IRCTC. When you say you own an apartment, just check what you really own. Some walls? A ceiling? The floor? Take away the building around an apartment and what you get is just a concrete box suspended in the air, the real value of which is only as much as that of the materials used to build it. It is not, in many cases, backed by "real" tangible assets like land and if anything is just a bubble. And legally, the real owners of your apartment will be the bank. They also own you, your wife, your children, your life, your soul, your dog, everything. So would you want to pay rent to the bank at inflated rates or would you want to pay a lesser amount your landlord? You will have to keep yourself bound to that shitty job you hate for the rest of your life to make sure your owners do not tighten the leash on you. Profound:
"What you pay as rent you can pay as EMI!"
No you can't. To think that EMI=Rent or EMI will only be marginally higher than rent is the biggest misconception uninformed people have about purchasing an apartment. Cut and raw, the EMI you pay will be many times of what you pay as rent. For example, if you are paying rent of Rs.15000 per month for a 3 BHK in a reasonably priced area, your monthly expense on EMI+maintenance for a comparable "owned" house will be around Rs.45,000 per month! That is Rs.30,000 more going out of your pocket without giving any comparable (monetary) gains! Proclaiming that it is your "own" (which it is not) will not do any good because you can't pay the Home Loan by scratching something off your apartment walls no? It is an expense like owning a car. And your apartment value is really just a bubble because it is an intangible asset, completely dependent on market forces and having no real value on its own. (For my non-Indian readers, Home Loan/EMI = Mortgage/Payments)
"You will have much more amenities and live a better life!"
"With all amenities!" is a staple slogan apartment builders use to peddle their wares. "Oh look, a swimming pool, lifts, multi-gym and club house! Awesome! Now let us totally not use them and pay for these." Not only do you have to shell out per square foot for these goodies but you have to pay maintenance through your nose as well. All for these stuff you mostly will never use! I have always wondered why people buy all this stuff that they never intend to use. Living in an apartment complex also gives you a chance to be part of a community or the "Association", a group of people whose main objective is to perpetually squabble and shout at each other to satisfy their egos. You will also be burdened with a laundry list of rules which tell you what you should and should not do, which only will lead to more fighting. People might consider all this "modern", but living in a concrete jungle with a bundle of cosmetic add-ons under the guise of some perceived lifestyle show-off is not really my idea of a "better life". And of course, you will have to pay EMIs for 20-25 years! TWENTY FIVE YEARS! Boss, that is half of your entire lifetime! Do you intend to waste your entire adult life by pointlessly working to pay off the bank?? I don't.
"You will have your finances in order!"
In fact it is the other way around. Financially your life will take a turn for the worse when you buy an apartment. Simply put, where will you have money to spend after paying more than two-thirds of your salary as EMI every month? Buying an apartment will in no way increase your standard of life or save you money, it will only make you spend more and hence lower it! In addition to the EMI and maintenance, any work you do on your apartment from fixing a leaking pipe to repainting, has to come out of your pocket. And after booking an apartment until it is finished you will have to pay rent and EMI. And of course, many builders will not stick to the payment plan provided to you in the beginning so you will always end up paying more. After all this spending, where will you have money left to pay for the good stuff?
"You can do whatever you want! No one will question you!"
What are you planning to do? Blow it up? Mostly, you can do anything you would want to do with a rented place as well, save installing fancy modular kitchens and Jacuzzis, and if you could afford those you wouldn't be reading this blog anyway. And whatever you want to do in a rented place comes for free as the landlord will pay for it! But I guess people say that they will have the "freedom" to use the apartment as they want. Wrong. They are still bound by numerous clauses and rules of the association and so on. Many house owners don't really care what you do in your apartment as long as you pay your rent and don't damage the place. And if anyone means "No one can ask me to vacate my house", try missing a couple of EMI payments. And in most cases, you will have no say in how your building is constructed, what are the materials that are used and what the floor plans are.
"An Apartment is an Investment"
The latest fad among people looking for an "alternative source of income" is to buy apartments for "investment" in dusty suburbs at inflated prices which get inflated thanks to people looking to buy apartments for investment, meaning to sell them off for profit later on. Perfectly good business plan, considering the belief that real estate prices will always keep going up. This is the same what they said about the Japanese real estate market until 1992 and the American real estate market until 2007 which when went bust took down the entire World Economy with it. There can be only so much demand and so much buyers and so much they will be willing to pay as long as they are able to pay. The Indian real estate market has all the trappings of a bubble, propped up by artificially inflated pricing by vested interests and corruption. The entire thing is precariously stacked up to each other like Dominoes, a slight upset in one factor can cause everything to come crashing down. Lives will be ruined. I am in no mood to sacrifice mine.
"Show Them that you have arrived in Life!"
"Whom?" Your neighbour? Your boss? Colleagues? Friends? Relatives? The grocery shop owner? That chick who refused to marry you because you weren't rich enough? And what will you achieve by "showing them"? The people who tell you this show precisely their mindset. They live to "show" others, on pretenses and pomp, Which I don't. I don't care a Neutrino's posterior about what others "think" about me. And more than that, I don't believe a person's success in life can be evaluated looking at the quantity of concrete one has acquired in the air. And not to think that any of those whom you want to "show" will actually give a damn. The "Everyone is doing it so I am also doing it" crowd also fall under this category.
The Other Side of My Opinions
"Hey, you self-righteous moron, so you think all those who bought apartments are fools? You are the only wise old man around here, huh?" - You might feel like shouting this at me after reading this. Of course, lakhs of people have bought apartments and are living contented and happily in them. Many must consider this to be the biggest achievement of their life. Then there are many who have made neat piles of money buying and re-selling "investment" apartments. Good for all of them. These points above were just my feelings about why I am not buying an apartment in Bangalore, Kochi or anywhere else.
Of course, the biggest reason why I am not buying a house has to do with the financial part of it, that I don't have the money nor do I want to fall into the Home Loan trap. More about that in the next part.