Is Your Dream Home a Financial Nightmare? Advisor Reveals Where Not to Buy Property in India
In cities like Mumbai, Delhi NCR, Gurugram, Noida, and Pune, renting a 3 BHK can be more financially sensible than buying. Real estate advisor Lovish Anand explains why.
Real EstateProperty InvestmentRental YieldsHomeownershipFinancial AdviceReal Estate MumbaiJun 17, 2025
“Your dream home could be your worst investment depending on the city,” Anand warns, citing a study by 1 Finance that compares EMIs, stamp duty, maintenance, rent, deposits, and opportunity cost.
In cities like Mumbai, Delhi NCR, Gurugram, Noida, and Pune—especially for 3 BHKs—renting makes far more financial sense. Property prices are high, rental yields are low (often below 2%), and it can take over 30 years before ownership beats renting in terms of cost.
“That’s not an investment,” Anand writes. “That’s a slow bleed.”
Meanwhile, cities like Bengaluru, Hyderabad, Thane, Kolkata, and Chennai flip the script. With rental yields over 4% and property prices more reasonable, homeowners in these markets can break even in just 3–8 years—particularly for 2 BHK units.
The study recommends buying in cities or segments with higher rental yields and shorter breakeven periods. Renting is advised in high-cost, low-yield areas where the math just doesn’t add up for buyers.
The bottom line: location matters more than ever. In Anand’s words, “the numbers don’t lie”—and in 2025, owning a home isn’t always the smarter move.
For those considering property investments, it’s crucial to weigh the financial implications carefully. High property prices and low rental yields in certain areas can turn what seems like a dream home into a financial burden. Conversely, in cities with better yields and more reasonable prices, buying can be a sound investment that pays off in a shorter time frame.
Anand’s insights provide a valuable guide for anyone navigating the complex landscape of real estate in India. Whether you’re a first-time buyer or a seasoned investor, understanding the financial dynamics of different markets can help you make informed decisions and avoid costly mistakes.
Frequently Asked Questions
What factors does Lovish Anand consider when advising on property investments?
Lovish Anand considers factors such as EMIs, stamp duty, maintenance, rent, deposits, and opportunity cost to determine the financial viability of property investments in different cities.
Why is renting more financially sensible in cities like Mumbai and Delhi NCR?
Renting is more financially sensible in cities like Mumbai and Delhi NCR because property prices are high, rental yields are low, and it can take over 30 years before ownership becomes more cost-effective than renting.
Which cities are recommended for property investments according to the study?
Cities like Bengaluru, Hyderabad, Thane, Kolkata, and Chennai are recommended for property investments due to higher rental yields and more reasonable property prices, allowing homeowners to break even in 3–8 years.
What is the breakeven period for property investments in high-yield cities?
The breakeven period for property investments in high-yield cities, such as Bengaluru and Hyderabad, is typically between 3 and 8 years, making them more financially viable for homeowners.
How can understanding rental yields help in making better property investment decisions?
Understanding rental yields helps in making better property investment decisions by providing insights into the potential return on investment. High rental yields indicate a better financial return, making the property more attractive for investment.
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