Everyone dreams of owning a home. But low salary or higher cost of the house doesn’t let everyone to realise this dream. At times, homebuyers also get into bad deals due to lack of financial awareness. This makes investing in real estate time-consuming and risky, forcing many to postpone their dream of becoming homeowners.
However, Akash Ravichandran, a Data Scientist at Ford Motors, not only fulfilled his dream of owning a house at the age of 25 but he did it on purpose to earn rental income. Akash graduated from school in 2014 and got his engineering degree in 2018. After that, he started working at Ford Motors as a Data Scientist.
In an interview with The 1% News, Akash shares how he managed to become a homeowner at the age of 25. Edited excerpts
How much did you pay for the house? Did you also take home loan?
The total value of my property is Rs 74,37,000 (Inclusive of Stamp Duty and Registration Charges). Here’s the breakdown of his house purchase:
- Stamp Duty (7% of 67,00,000): Rs R4,69,000/-
- Registration Charges (4% of 67,00,000): Rs 2,68,000/-
- Down Payment: 13,40,000/-
- Loan Amount: Rs 53,60,000/-
- EMI: 53,500/month
- Interest Rate: 6.7% (initially), now because of repo rate increase, it is 9.2%
- Repayment Duration: 15 years
How do you use the rental income?
I also get some rental yield from the house, which is majorly invested back into equities and debt instruments.
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When and how did you start planning and saving for your house?
It was my dream to buy a house of my own and I thought I just needed a good salary. After I started earning, I realised that I must know about personal finance to plan for my goals. Even my dad, who runs a small business, was not much aware of how to manage money for different goals.
I searched online for good sources and I found Sharan Hegde’s Instagram page – Finance with Sharan. His videos helped me understand difficult finance topics. When the masterclass came, I signed up for it and at the end when he spoke about The 1% Club, I joined it. I watched his finance modules again and again to understand things better and I eventually started saving more.
What was the strategy you followed to save for house purchase?
My asset allocation was pretty simple back then. I was investing majorly for tax saving purposes, mostly in ELSS Funds. Also, only when I reached an annual salary range of Rs 15 LPA, I was confident enough to invest in real estate to get fixed monthly returns. During the Corona Time, there was not much expense that I incurred. So I was able to save up some more money during that period.
What would you suggest to youngsters like you who also dream to own their own house?
I would suggest them to start their investments as early as possible. They should also maintain a discipline to save as much money as possible. Further, they should make good use of earning opportunities coming their way to accumulate money for home buying.
Disclaimer: The above content is based on the information provided by Akash. The 1% News doesn’t independently verify non-public data reported by interviewees.
