Think buying a house is a smarter investment than renting? Bengaluru CA warns of a costly real estate trap

Buying a house is often treated as one of the safest financial decisions, especially when property prices keep rising. But Bengaluru-based CA Meenal Goel believes a rising home price alone does not make a property a good investment. Before taking on a long-term home loan, buyers need to consider how long they will stay, whether the EMI fits their income and whether they actually need another property. Her advice challenges the common belief that owning a house is always financially smarter than renting.

Will you actually live in the house?

According to Meenal Goel, the first question buyers should ask is whether they genuinely plan to live in the property for 15 to 20 years. If there is a possibility of moving to another city or neighbourhood within a few years, renting could offer considerably more flexibility. Buying a home comes with a long-term financial commitment, while renting can make it easier to relocate when career, family or lifestyle circumstances change.

Can you comfortably afford the EMI?

A dream home can quickly become a financial burden if its EMI starts controlling the rest of your lifestyle. Goel suggested keeping the home loan EMI below 30% of household income as a thumb rule. The idea is to ensure that homeownership does not leave too little money for everyday expenses, savings, investments, travel or other financial priorities. A house, she believes, should fit into your lifestyle rather than dictate it.

Do you really need a second house?

For existing homeowners, Goel recommends asking another important question before purchasing a second property: is another house actually necessary? If the second property is being purchased purely as an investment, she suggested considering land instead. The decision, however, should depend on the numbers and the investment objective rather than the assumption that every additional property will automatically create wealth.

Rising property prices do not tell the whole story

Goel pointed out that a house does not become a good investment simply because its price increases. A property that is not being used as a home can also involve recurring costs. Owners may have to account for maintenance, taxes and paperwork while a significant amount of capital remains tied up in the property. This can make the headline property appreciation look different from the actual financial return after accounting for the costs of ownership.

Invest only when the numbers work

For Goel, the strongest utility of a house comes when the owner actually lives in it. If someone is buying primarily for investment, the decision needs to be evaluated differently. Her broader advice is to separate the emotional appeal of homeownership from the financial calculation. Instead of assuming that buying is always better than renting, prospective buyers should examine their expected duration of stay, EMI affordability and existing property ownership before committing a large portion of their capital.

As Goel puts it, the priority should be to buy a house to live in and invest in real estate only when the numbers make sense.