Why I Am Not Buying a House (Apartment) Part 3

As I said in the previous part, I don’t have money to buy an apartment. But even if I did would I have bought one? I doubt it. I don’t think I would ever buy an apartment in India because I get claustrophobic in apartment buildings among other things. These other things are taken from my perspective, not “refuting others claims” as in the first part. These include perks and flexibility one gets on renting an apartment as opposed to buying one, that awesome feeling of freedom one gets knowing that you have no EMIs to pay, the absence of headaches of many kinds, and of course, the futility of it all.

Buying an Apartment vs. Renting a House/Apartment

It is no accident that all the arguments above seem to gravitate in favor of renting an apartment instead of buying one (on loan). Putting side the “warm fuzzy feeling” that comes with living in a structure that has your name on the deed (conditions apply), I do not find any financial, material, spiritual or mental benefits that would come out of living in it. In fact, it only complicates things, making you tie yourself up in little knots. You lose your entire life and all the flexibility that comes with it. You will have to work until the end of your life like a bonded slave to pay off the loan. You have to keep yourself tied to employment with little choice of doing anything else thanks to mortgage payments. You have to calculate how you do just about everything including career choices. You can’t easily take up work somewhere far away or send your kids to another school and even if you do, you will just be wasting your life commuting. Apart from the financial benefits it brings, renting offers you infinitely more choices and provides you with lots more flexibility to decide your life, unless you have decided to grow into yourself and just live off your remaining days. But well, not buying an apartment will deprive you of the pleasure of making dramatic statements like “This house is the result of my sweat and blood!” Why would you want more strings attached to you?

Neighbours Pride, Owner’s Envy!

The importance we Indians put on material property is ruining us and our country. Those who acquire apartments and flashy cars (on bank money) early in their career or life are hailed as path-breakers, success stories and heroes, while those who rationally decide not follow the crowd are considered losers. We are a society of sheep who run to do things only because others did it. Examples are B.Tech, MBA, Software Engineers, Apartments, Samsung Galaxy phones. “Damn. All my classmates, friends and colleagues are buying apartments! So I will too!” The odd one who does not is put under immense pressure, making them write blog posts explaining why they are not buying flats. Adding fuel to the peer-pressure fire are the obnoxious “live life according to society norms” “questioners” who argue “Living in your own apartment is a matter of pride!” Yes, it is, when you have built it on your own land. Anyone with a decent income can easily get a home loan and buy an apartment in this country. What is there to be so “proud” about that and about living in a palace in the sky (മാനത്തെ കൊട്ടാരം) paying exorbitant rent to the bank to whom it really belongs? And this “pride” goes to the head of some people who turn into chest-thumping egomaniacs, some of who consider themselves as Gods for living in a “flat”, thinking it to be synonymous with being “upmarket”, “modern” and so on. I could never understand this. Another manifestation of this “Pride” is the  “apartment associations” which seem to exist for the sole purpose for people to show how “important” they are as “house owners” as lords and masters of the Universe. Breaking News: No one gives a damn about you.

The “Investment Mania”

I believe apartments to be “intangible investments” or investment whose value is not decided on their own but on many “market” factors”, the value of the land it stands on being only one of them. Even a grocery shop opening nearby can cause apartment prices to shoot up. But things are getting ridiculous now. In Bangalore, most builders today are focused only on the ultra-premium segment costing 1 crore and upwards for an apartment, located in untenable locations far out beyond even the suburbs. And these houses are valued and sold mainly based on the “Lifestyle” and “show-off” value they offer, filled with fancy trinkets that have no real monetary value. A 3-Bedroom apartment in Rachenahalli, a dusty suburb of Bangalore behind Manyata Tech Park, Nagawara, Hebbal costs close to 75 Lakhs! Remember, this is a place with no running or underground water, sporadic electricity, barely driveable roads, no public transportation or no cinemas or any such conveniences nearby. But the “investment” mania is driving prices up to unrealistic levels. A flat for 4 crore? One can buy land and build a house on it for that money! Even in case the price of land goes down, it is still land and there are still ways to derive returns out of it. But if an apartment loses its value it just becomes a hunk of concrete not worth anything. The entire “apartment mania” feels just like a bubble thriving on hollow pomp and show with no substance and sense. And the bubble is now becoming frightfully inflated and thin.

Dare to Dream Beyond Apartment Walls

Thinking practically, given the land and property prices in Indian cities, it is no doubt impossible for 90% of our populace to even dream of an independent house built on their own land. So the only way to fulfill that dream and ultimate aim of their life of possessing a house that one “owns” is to buy an apartment. Nothing wrong in that, but as far as I am concerned, owning a house which is in reality only a set of walls beyond which you can’t lay any claim upon, built up on land that you cannot call your own and for which you pay exorbitant rent to banks for the rest of your life all seems a whole lot artificial, hollow and not real. What is a house which you don’t build on your own, without a little garden (no, potted plants on balconies don’t count), rooted firmly on your own land? Apartments come with fixed floor plans and layouts, built up by someone else, which is why I would never be able to identify with an apartment that was built by someone else, owned by some bank and where I would have to live according to someone else’s rules. And for the record, you really can do anything you want in your own standalone house, many things which you cannot do in a rented apartment. Buy a drumkit and practice on it in full volume for instance. And living in one of those complexes with 1500 apartments? You are living in a mini-city! Claustrophobic, if nothing else.

What is the Point?

What is the use of making money when you cannot enjoy the fruits of that money? I wouldn’t consider owning an apartment in Bangalore, Mumbai, Chennai, Hyderabad, Kochi or anywhere else “fruit” of that money. I know many people who after having bought homes in distant suburbs of Bangalore spend four to five hours commuting to their workplace on the other end of the city (Kanakpura/Bannerghatta/Mysore Road to Hebbal, Tumkur Road to JP Nagar/E-City). Heights of irony – You buy a house to enjoy its comforts, but you are unable to do so because you have to spend that time in traffic getting to work so you can pay off the mortgage for the house. So, what is the point? The same thing goes for NRI types who blow all their money building palatial mansions in India and leave them to gather dust while they go back to living in cramped condos on the other side of the shore. More so than that, what is the point in buying a flat and sweating over it every waking moment of your life, forgetting that you bought it to “enjoy” it in the first place? But then again, to each his own. As @smitaprakash says here, “Dreams and hopes are built with sentiment, not bricks.” Sentiment is liked to the land, on to what you built up, and not to something that you bought readymade off the shelf.

I have nothing against people who buy apartments and live in them. Just that I will never want to live in one. I value my peace of mind and money more than showing off and vanity, thank you very much.

Prestige Shantiniketan Apartment COmplex opposite ITPL, Bangalore

Why I am Not Buying a House (Apartment) Part 1 – Leave Me Alone!

Why I Am Not Buying An Apartment Part 2: The Home Loan Trap

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  • Unknown

    Good Write up :) to be honest.. I’m planning to cancel my apartment which i booked yesterday in chennai for 50 lacs … you are right .. peace of mind is important than anything else in this world …

    • shanmugarajan

      Hi, i saw your reply one of the post in vadakkus.com..”Good Write up :) to be honest.. I’m planning to cancel my apartment which i booked yesterday in chennai for 50 lacs … you are right .. peace of mind is important than anything else in this world …”

      do u purchased apartment now? Just let me know your view on buying apartment

  • Gunasekhar

    Your words are so true. I always suggest my friends not to buy apartments on loans. If you have atleast 50% of the cost, then buy it, otherwise be happy to be a tenant with freedom to leave any time you want to and peace of mind. This applies to cars also. Anyone should buy into affordable liabilities; means have some other assets that generate to support the payments and in the worst case to pay off the loans completely by liquifying.

  • I must be in a peculiar situation since I work from home. I did not when I bought my ‘villa’ (actually just a row house that looks like all the other houses in the layout but I get my own 30×50 piece of land for the 1300 something built up area) in the burbs of Bangalore, Hosur (actually another state altogether).

    Probably this ‘work from home’ option changes things a lot. More companies should allow that. It will reduce their costs, reduce the burden on the planet and reduce the burden on us salaried employees.

    • Well, another thing I never understand. Why do people insist that you have to burn fuel, spend time and money to travel to a building 20 km away to “work” when it can be done efficiently from elsewhere? You are lucky :)

  • Midhun Murali

    Makes complete sense and echoes with my thoughts. I already have a huge car loan hanging over my head like the sword of Damocles. I will never spend on a house unless I have at least 80% of the total expenditure is ready with me!

  • RealEstateBubble

    Exactly like my thoughts!!! I have been explaining same to people for a long time! I think it is waste of your time, hard-earned money to buy a “small” flat in “BIG” complex … and yes, I am glad that you mentioned rules of these complexes!!

    One of my friend bought a flat of 60 lacs in Sarjapur and when he was moving in with his stuff he was asked to pay 500 Rs. as NOC and Lift Usage Charges mandatory!!!

  • Liza

    If you are against buying an apartment..what about buying a house or land?

    • I am totally in favor of buying a house or land!

    • I am totally for and want to buy a house on my own land. But I don’t think I will ever be able to.

  • jai

    Man, What a great read, All the three installments, For a long time I was waiting for such articles on Real estate, Your are really a champion, God bless, It will save lot of people to get in this trap.

  • gp

    It is perfectly OK to live on rent when availability is good, but the situation is pathetic in Noida (NCR). It is very difficult to find a decent flat on rent and cost(rent) increasing rapidly each year, your landlord kicks you out because someone else, is offering much more rent…It is really difficult to keep moving specially when you have whole family with school going kids…so buying even if at a bit high price, makes sense to get rid of all this trouble. But yes, if rental availability is good and reasonable rent, then definitely it makes sense to live on rent instead of buying on 80% loan.

  • mjb_11

    Hi, I need your suggestion.

    I bought a flat in an apartment built on 600 sq. yard land. There are 5 floors and 2 flats in each floor. Undivided Land share is 60 sq. yard. If I would rent in the same area, I have to pay 15K as rent. I save 5K on interest as part of tax deduction. My EMI is 40K, so I am paying 20K extra to become owner of the house after 20 years loan tenure. My rationale to buy the flat is as follows. I get 60 Sq. yard Land share, I have to pay 20K extra which is roughly 20% of my salary. Do you think my thinking is correct? Actually I have been getting night mares after booking this apartment. I have already registered the flat on my name last month. In fact I am planning to cancel the registration and put my flat on sale. Please respond with your comments. I didn’t go for a big multi storied apartment because I thought I will get 60 Sq. yard land share any day. Currently the land value is 35K per sq. yard, construction cost is approximately 1300 per sft. I am paying approximately 10 Lakh extra to the builder to own the house. Do you think my reasoning is correct?

  • sujay

    so so true and this why middle class remains a middle class forever.. I am a businessmen and I have no loans personal or business.. I started my life working as engineer, asst Manager, Manager and started my own business so I came in hard way, today I have three cars one Ford, one Suzuki and a Mercedes Benz all taken on cash payment without any loan the reason is simple I am not following the common trends and not doing things just because everyone else is doing it .. I still live in rented house while most of my classmates are living in apartments paying huge EMI’s.. I used my common sense and took 40×60 land very much away from Bangalore city and I am saving money to building a beautiful house with two floors and a private swimming pool on second floor.. off course I will do it without taking any stupid home loans

    • Always an Engineer

      when you first said Manager then said “i came in hard way”, I started laughing.

      I think incompetent engineers become manager because they don’t have the potential to become good engineer.

      • wayjay

        And I though he was selling one of them, crystals or some beaded necklace for success

  • sujay

    I remember someone telling me this ” Apartments are nothing but dignified slums” I know its so true !!

  • Pradeep

    Awesome article! Enjoyed it a lot! And very similar to my sentiments but I have’nt written such a great blog on that :) Appreciate your effort in writing this beautiful piece of work!

  • DN

    Thats one point of view. Here is my observation: Every person I know (without exception) who was very negative and skeptical about living in an aparment (as against a house) said it was a wise move after “experiencing” the comfort, convinience and peace of living in a well-maintained complex. Even if renting it out, the power of many has clear advantages over an individual house in today’s world.

  • Ashok B

    Hey hey i got the solution…..thanks for awesome article….i can sleep well now….

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  • Husni

    Nice article. Well thought and composed :)

    I am feeling happy to see some like minded people here. I bought my first car last month by paying all in cash. It’s an awesome feeling!! Like you said, my colleagues who recently graduated got sedans on loan and started feeling pinch of EMIs :) Whole concept of getting everything on mostly loan is a ugly monster whom people love to embrace.

    Thanks again..

  • Santhosh Gopal

    Very good article, Thanks man, with confused mind, decided to buy a apartment in vijayanagar for 50lakh. Infact I had given all the necessary document for home loan processing with 2 banks(thinking atleast one will succeeded) after reading this article, I have cancelled the loan.

  • Shivakumar

    Hi Thanks for sharing this. It is a good article. But such things its tough to explain in family as family wants to have own flat/house like others.
    I am one of the person against buying apartments or houses in Bangalore where land or apartment costs are increasing without any reason. And also its hard to get such apartment where there is no(100%) violation in their construction and for such apartments govt/banks are ready to give approval/loan.

  • TJ

    Property prices are atleast double of what they should be in Bangalore ..sometimes 3 times ..not worth it. The high price is there , but the value is not there, so not worth it :(

  • TJ

    Renting is also not easy in Bangalore. Its your worst nightmare.

    The landlords are crooks and will take a 10 month deposit without interest and will give you a hard time giving it back.

    Every year they will increase the rent by 10 % & throw you out if you reject or refuse. You are at their mercy as opposed to the bank’s mercy when renting, pretty much the same thing.

    There are water issues , electricity issues , security issues etc when you are renting from these arrogant & obnoxious land lords, who think they are God.

    Good luck finding a decent & reasonable rent place in Bangalore with a kind hearted & sympathetic land lord, who has manners & respect, almost impossible to find :(

  • paulzac

    what an insightful write up Vadakkus. Echoes exactly my apprehensions on this damned aspiration that all Indians seem to be increasingly trapped in! Everywhere I look around, including my own family, I find know- it- all proponents of buying flats. You can’t escape-its either an emotional (eg.’nothing like owning your own house’ or financial justifications. Why is it so hard for people to realize the absolute joy of living on your own terms without this ridiculous pressure hanging over your head, its almost like people don’t want to accept the fact the life might actually be better off living on rent.(assuming you’re not a mogul). Really hope that articles like this have some impact! good job man…

  • raghu

    It is nice article. we should not buy apartments by taking huge loans.

  • prabhu

    Investment wise, apartment is like a stock. Since we don’t have the means to buy the whole company, we buy a piece of it ie stock.
    With Apartment, since we cannot afford to buy the whole land, we are buying a piece of it ie undivided share.
    No matter what you have, apartment or an individual house, the undivided share per unit will be similar… about 350 sqft for a 2bhk….
    All you need to look at is the price of an unit (apartment or one floor of an individual house when max floors are built) / undivided share of the unit…. with this you can get a rough idea of how costly or cheap an apartment or a floor of individual house is.

  • Tenant

    I don’t buy any of this argument. I would love to hear some marwari’s take on this.

  • A great article. Buying flat is good only when the price is right. and one such is hard to find nowadays

  • x2austin

    Presents his point of view very well, but a little biased. Think of it this way. EMI is a hedge against inflation-it never increases. While it may be 2-3 times your rent today, in 10 years the rent will be the same as your EMI, and in 20 years, maybe double the EMI. Also, after 20 years, you will still be paying rent, whereas if you had bought, the apartment would be yours. The location would also be probably more desirable, given the city’s(Bangalore’s) rate of growth. Hope this makes sense.

    • Shankar Narayanan.

      Good point. But after 10 or 20 years, your salary would have also risen up to the level that you can pay that rent. And also what do you get by owning that apartment. By 20 years, it will become old and ugly with little or no water and tying you up in knots not allowing to look out for jobs elsewhere etc etc and also you would have paid 3 to 4 times of your home loan principal.

    • Oeuvre Ville

      friends…people are paying 7500/-per month as maintenance in bangalore in apartment near my house. and that is apart from the rent. which is 25000/- 2bhk and 32000/-3bhk.

      now comes villa maintenance.. the drama starts with rs. 500—1000–1500 and ends with 5000/- per month.

      gross!! first you buy a villa or flat for 45 lacs to more than 2 crores ..going on rates..mim no max. these days. then life long they are paying maintenance. for wat? when i asked a lady who owns villa in kadugudi she was boasting about it….oh..society giving me maintenance for the villa. what maintenance..? she said…24 hrs.? i said wat 24 hrs.? she said was funny—watering plants in front of house…repairs…like plumbing and cleaning the street clean and surrounding areas…and guys this is other than ebil and waterbill. so WHOEVER SAYS THAT BUYING A FLAT AND VILLA BETTER THAN RENTING ..IS IGNORING THE GREEDY POCKETS OF BUILDERS AND ASSOCIATION WHO ARE GOOD FOR NOTHING. YOUR TORTURE TO PAY WILL NEVER END EVEN AFTER OWNING A VILLA AND FLAT. INDIVIDUAL HOUSE YOU WILL HAVE REPAIR WHEN YOU FIND IT GENUINE AND NEEDED BUT IN VILLA AND FLATS..ITS YOUR DAILY DUTY.

      YOU SWIM OR NOT YOU HAV TO PAY FOR SWIMMING POOL

      EITHER YOU ARE ARTHRITIS PATIENTS BUT YOU HAVE TO PAY FOR GYM..

      YOU ARE STAYING ON GROUND FLOOR BUT YOU HAVE TO PAY FOR LIFT OR ELEVATOR..EVEN FOR SUDDEN REPAIRS.

      HA HA HA HA…SOUNDS FUNNY BUT TORTURE.

      NOW COMES SECURITY…

      WHAT THE HELL…SORRY FOR THE WORDS..BUT I WENT TO VISIT ONE OF MY FRIEND STAYING IN SHRIRAM SANSKRITY ..SOCIETY..OH GOD..3 TIMES I HAD TO FILL REGISTER WHLE GOING AND SAME WHILE COMING..SO I FELT LIKE I WENTTO MEET SOMEONE IN HOSTEL AND FELT LIKE NEVER VISTING AGAIN.

      WAT A FREEDOM .

      I FELT LIKE GATED PRISON NOT GATED SECURED COMMUNITY AS COMPOUND WALLS ARE NOT SO HIGH ENGH TO STOP …ANY ANTI SOCIAL ELEMENTS IF THEY TRY. SO WAT IS POINT OF PUTTING LEAN WEAK AND THIN UNHEALTHY LOOKING SECURITY GUARDS?

  • Ashok M

    Dont discourage people from taking some risk and saving something in life. Housing loans are the wisest loan one can have – lower interest rate than other kinds of loans; so significant part of EMI will go to principal than interest. Investment on a housing property will be a forced saving- which is otherwise very hard to make!! Its better to buy when you can, than repenting after 10 years – oh I should have purchased the house instead of renting all these years!.

    • Jay way

      Do you own an apartment ? Or looking to buy one near future?

    • whayjay

      Where is your apartment located?

    • manju

      I agree with Ashok M. I got into IT (MNC product development, no onsite opportunity) at the right time ie just before 2000. Around 2003, I and my colleagues saw the property prices going up monthly by 50/- …we dismissed it as a speculation. We were pretty confident that NRIs after staying abroad would not prefer to stay in an apartment surrounding a slum…within a months time one of my colleage bought an high rise apartments for around 12 lacs in 2003. Within a year’s time another colleage could not bare the heat of price rise and bought at 18 lacs. So I thought two of my colleages had fallen into the trap. Others like me who did not enter the market predicted that the rally would end soon and we could buy the properties at realistic prices… I waited for 7 long years …. 2009 recession hit … but nothing changed much…Some NRIs who retuned to india started staying in places surrounded by slums (in the slum to be precise) … I realised that no matter what, the real estate market will always be out of reach of a common man. And finally I had to buy at 40lac. Nearly three times that of my first colleage…far away from the city. Now with additional responsibilities at work, home and uncertainity of job due to higher salary, the things looked worser. My two colleages pre paid their loans and were happy leaving in the own house. I was just to begin my EMI life. Note that the investment I made never caught up the real estate. So I ended up owning more loans. Now after 5 years,.. my investemt has doubled on paper. I still wonder who are these people who are ready to buy my apartment at 80lacs. … I don’t know when this speculation is going to end….when will the prices be realistic.

  • ravi

    Investments are the means of hedging inflation. Remember, Money is not wealth, but is what it can buy.
    A middle class indian has limited ways of storing his hard earned money:
    1)Bury the money in the ground
    2)Banks
    3)Metals like gold
    4)Property
    5)Stocks
    Ultimately money is just a means of exchange(barter). Historical is been shown that you can barter what ever you want with Gold, Stock, Land.

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  • Manohar Bhat

    Read all 3 parts which stated minute details but missed to consider the environmental change in these years in Bengaluru which is near to death. Thanks for eye opening of some sensible people.

  • We can’t even buy a tyre for my scooter.. so forget it..

  • I had similar thoughts your article gave me more clarity. Thanks! Unrealistic prices for four wall concrete that too in suburbs I personally feel it is madness to buy unless you have surplus of cash. At old age you need a house but your saved money and investments would be higher than what you end up in paying EMI’s now better at that stage get out of the city buy or construct a nice house of your dreams and live peacefully. I feel villages are better than polluted metro cities where life sucks.

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  • Mritunjai Rai

    nice article.

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