At a recent gathering of property developers, I was stunned at the changed standards of what is required for a comfortable home in India. Apparently, those days in the mid-seventies and the eighties, when all we looked for was solid construction without costly frills and a nice, central location preferably close to the homes we grew up in during our childhood and youth are old-fashioned standards.
These days, to make the cut, a home must be set in a ‘gated community’, have security and a clubhouse, swimming pool (never mind that there has to be a desalination pump to get over chronic water shortage) a walking track even if your home is next to the beach and a guest house in the grounds to accommodate visiting family because apparently people opt for smaller living spaces and simply put up visitors in hotels and in the aforementioned guest houses.
It is a major cultural shift in a country where it was earlier considered an insult to not turn your life topsy turvy even for a friend’s relatives who happen to be visiting your ‘hood and would doss down with you for a fortnight without much discomfort to themselves.
Unfortunately, the upscaling of property features back home also comes at the wrong end of the cultural and sociological zone for many of us. In Bahrain, many NRIs in my generation are seriously wondering which place to call home after retiring because clearly, their children have settled far from home or in different countries and have very different ideas about how to live their lives and where to settle. So is it really worth it to lock a considerable part of your savings into a property investment that you probably cannot touch for 15 years?
Look around your friends’ circle. How many of your friends move on to live in their former childhood home? You and I just want more mod-cons that we grew up with. My question is: If your children, like you, don’t want to inherit your property or are settled away from home (even in another state or district in your home country), what happens after your time? Will they really have the patience to dismantle your real estate bequest and get best value for it?
Why own when you can rent? That is the question. Renting often carries a lower monthly cost than owning a home. When you add up your mortgage, property taxes and insurance. One of the major benefits of renting versus owning is that renters don’t have to pay property taxes. With newly built homes getting larger and larger, property taxes can be a significant financial burden.
A Velumani, the millionaire owner of Thyrocare, the world’s largest diagnostic centre and pathology lab in India, talks often of his “Aha!” moment when he was negotiating a property purchase. He says he realised he would be just as comfortable in a rented home and have more money to invest in his fledgling business “because investing in a home would mean I would be working to pay my EMI and not to expand my business.”
In cases where expats are considering a home purchase, they are now looking seriously at buying a home in Bahrain to retire in. The government’s recent announcement that the investment limit for a permanent residency in Bahrain has been brought down to BD50,000 from BD100,000 is welcome news and the kingdom, with its cosmopolitan harmony and geographic centred-ness has the potential to become a retirement haven.