Infra Talk: Is there an age ceiling on investing in property?

It is true that banks are willing to lend to a person only for so long; when a prospective borrower is looking at retirement soon, the concept of giving them a long-term  home loan understandably does not make much sense to them. 

When a person is in his or her 30s, he or she has around 30 years of an active professional life ahead. Naturally, this offers abundant time to develop a large property portfolio. However, even when one is in his or her 40s, they are far from too old to successfully invest in property. There are still as many as 20 years ahead as an income- generating citizen - and even more if one is successfully self-employed or runs a business. 

Generally, it is assumed one must be able to service home loans for 25-30 years to finance one’s property portfolio. 

However, many banks in India have now understood that people can and do work past the conventional ‘retirement age’ of 65 these days. Interestingly, once one has secured a good portfolio of assets, he or she has additional clout and credibility with banks since these properties can act as collateral for fresh loans even at age 50 or above. The time to  experiment with ‘speculative’ investment should be over by this time, as one should justifiably have a healthy aversion to risk by the age of 55. 

However, if one wants to invest for personal use, this is where it gets a lot simpler because there is no ‘ideal’ age for home ownership. If one has been living in rented homes all one’s life, buying a home even at 65 makes perfect sense. 

In the first place, it is the perfect retirement gambit, as it provides freedom from the recurring expense of monthly rent. Secondly, it secures a sound asset which gives unmatched financial security and can be used to raise funds in emergencies. Thirdly, a property is the perfect bequest to leave behind for one’s children. 

However, there is no ‘ideal age’ to buy a home for personal use. The latter fact is especially true if one sees a self-owned home more as an abode and sanctuary of financial freedom and security than an investment instrument.