I have spent most of my life in and around Kandivali (a suburb in Mumbai). My school was here, my friends are still here, and my parents continue to live nearby.
So when I started earning, I did not think about moving closer to office. I just wanted a bit of privacy while staying close to family.
Over the years, I lived in several rented flats in the same area. When I began, a 1BHK would cost around ₹25,000 to ₹27,000 per month. Today, those same flats are being rented out for ₹40,000 to ₹42,000. The flats have not improved. The locality is mostly the same. Flat prices have gone up by only 10 to 15 per cent in the last seven to eight years.
But the cost of renting (from a property owner’s perspective the rental yield) has changed. It used to be around 3 per cent or so. Now it is closer to 4 per cent. So, if the property costs ₹1 crore, the cost of renting used to be ₹3 lacs per year; now it’s Rs 4 lacs per year.
Throughout this period, I kept hearing the same advice, especially online. Rent, stay flexible, and start an SIP. Avoid the EMI burden. You can invest more and live better.
I agreed. I did all of that. I invested regularly. My SIPs and stocks grew reasonably well.
But when my daughter started school, I somehow felt the need to stop moving. I did not want more lease renewals or sudden landlord calls. That is when I decided to buy.
And that is when everything started to feel different.
The Math Made Sense. Until Life Happened Slowly.
I had done the buying vs investing math many times around. It is not that complicated.
The flat I was renting cost me around ₹40,000 each month now. If I wanted to buy it, I would need to pay ₹1.3 crore. That meant putting ₹20 to ₹25 lakh upfront as a down payment, and taking a loan for the rest. The EMI would come to around ₹80,000 per month for the next 25 years.
So the financial advice seemed clear.
Stay on rent. Invest the difference around ₹40,000 every month through SIPs. Over 20 years, that could grow to more than ₹2.5 crore, assuming an annual return of 12 per cent.
That sounded like the smarter choice.
I also knew that a large part of any EMI in the early years goes towards interest. My principal repayment would be slow. From a return perspective, the SIP clearly seemed more efficient.
This was the logic that most people explained to me. And they were not wrong.
Even today, if you open social media, you will find the same comparison. SIP gives freedom. EMI locks you in. Do not rush into real estate.
For a long time, I followed that. But the deeper question was never about just the return. It was about when it starts making sense to stop comparing and start choosing how I want to live.
Not Buying Comes With Some Costs
For a long time, I believed I was avoiding risk by not buying a house. I was saving on interest. I was staying liquid. I was investing more. Typical social-media influenced behaviour.
But over the years (since I bought), I started to notice that not owning a house comes with its own set of costs.
Every 11 months, there was a new lease. With that came paperwork, brokerage, shifting costs, and deposit adjustments. Some landlords returned the deposit late. Some wanted higher rent without much reason. Some wanted to use the flat again for their own family.
I was spending time and energy on things that had nothing to do with money, but they kept affecting my daily life.
There were also the decisions I kept postponing. Should I buy a new cupboard? Will it fit in the next house? Should I get that appliance repaired or just manage for now? Even things like fixing nails on the wall or buying curtains came with second thoughts.
And once my daughter started school, these decisions became even more stressful. I began to think twice before renewing a lease. A change in house meant a change in her routine. That was not something I wanted to deal with often.
All of this showed me that renting was not always low-stress. It came with many small and recurring costs, some financial, some emotional, and many that I had never planned for.
EMIs Reshaped My Financial Thinking
Before I bought the house, I saw EMIs as pressure. A heavy monthly obligation. I assumed it would make me feel restricted. But over time, something different happened.
The EMI became an anchor.
It was large enough to matter, but not large enough to suffocate. And that balance did something interesting – it brought focus.
I stopped chasing too many investments at once. I was no longer distracted by every new fund, stock tip, or opportunity. I knew where a fixed portion of my income was going. That clarity simplified other choices.
There was also a kind of pattern or predictability it introduced. Rent was always changing. Some years it jumped unexpectedly. Some landlords delayed deposits. But the EMI stayed steady (tenure changed as it got affected by RBI’s repo announcements).
That consistency made long-term planning easier.
It also changed how I thought about spending. I did not feel poor. But I felt more deliberate. I thought twice before saying yes to things that were not essential. Not because I could not afford them, but because the house had become a quiet priority.
EMIs are not that bad after all.
Making Sense of It All and How You Can Decide
Looking back now, I realise that this decision was never only about returns.
Yes, SIPs grow. Yes, real estate in my area did not shoot up. Yes, EMIs are a long-term responsibility.
But I was not trying to optimise every rupee, rather, I was trying to remove one source of stress: the yearly house hunt, the rent changes, the shifting.
And to be clear, I bought my first house largely through investments. I had been doing SIPs for years. I had stocks I had held and tracked. So I am not saying investment is a bad idea. It helped me reach that point. However, focusing solely on investment was something I was not entirely on board with. Not for the next ten years at least.
If you are trying to make this decision, these are some questions that helped me:
- Am I looking for flexibility, or do I now value continuity more?
- Will I likely stay in the same city for the next five to ten years?
- Would I rather move often and invest more, or stay grounded and build slower?
- Am I delaying this only because I am unsure or because it actually does not fit my life yet?
There is no perfect model. But at some point, you have to stop running the calculation and start listening to what your life needs.
Disclaimer
Note: This article relies on data from fund reports, index history, and public disclosures. We have used our own assumptions for analysis and illustrations.
The purpose of this article is to share insights, data points, and thought-provoking perspectives on investing. It is not investment advice. If you wish to act on any investment idea, you are strongly advised to consult a qualified advisor. This article is strictly for educational purposes. The views expressed are personal and do not reflect those of my current or past employers.
Parth Parikh has over a decade of experience in finance and research. He currently heads growth and content strategy at Finsire, where he works on investor education initiatives and products like Loan Against Mutual Funds (LAMF) and financial data solutions for banks and fintechs.