In this edition of the reader story, we have a response to our recent article – Is it better for a young family to rent than to buy a home?
My father retired in 2008 from a PSU in Hyderabad. The company is not part of any govt pension scheme, so all he had was a 30L from his EPF, savings of about 15L, and sale proceeds of 40L from his house in Hyderabad. It was an independent house, and he felt he and my mother didn’t need such a huge house, so they moved to a rented house, paying 8K as rent in 2008 and decided to invest the 85L and live on its interest. At that time, they were getting about 7L per year and their monthly expense, including the rent, were about 35K. Everything was perfect, and they were happy.
Until 2020, I had taken a mediclaim from a private insurance company. I was paying a premium of 9K for a cover of 2L (floater). In 2020, they hiked it to 45K for a 3L cover (saying they don’t offer the 2L option any more) and then in 2021, they hiked it to 85K for a 3L cover, despite NO claims for the last 12 years. Porting was not an option as other companies charged exorbitantly, and no company offered fresh mediclaim to a 72-year-old man. I had no option but to give up paying mediclaim premium, as paying 85K for a 3L cover didn’t make sense.
Fast forward to 2022. My father had a stroke. My parents could no longer live separately, so they had to move to a flat in my building (my flat is too small for my family and theirs). The rent in my building was 35K compared to 15K in their earlier flat.
There were multiple instances when I had told my parents to buy a flat in my building and save rent, but they wanted to live without their own house, saying they would prefer to invest the money and get returns. My father invested about 8K out of the 85 L he had while retiring in equity, and his corpus is now 1Cr in 2025, despite withdrawing money for the last 17 years—that way, they have done well. But now, with a 38K rent and other expenses, including medicine, food, maid, etc, my parents are incurring an expenditure of about 70K per month.
The house owner is increasing the rent at 8% every year, which is exorbitant, but we have no option because they can’t live far away, I can’t move to some remote location where the rent is less, as my husband works here, and this is our own house. That way, they are stuck. The landlord knows this and is holding us to ransom by increasing the rent yearly. My mother has walking issues and needs help with everything. My father has his right side weakened after the stroke, so them are not that mobile. I have to keep them in a flat in my building alone. Buying is not an option as prices are over the roof, and even my father’s entire corpus won’t be enough to buy a house here now.
I would NEVER recommend not buying a house to anyone unless they are young, healthy, and free to move whenever they have a bad landlord. If you have your own house, you have a safe roof over your head and don’t have to live at the mercy of someone else. Having your own house avoids stress.