The Tenent is Leaving

It’s Sunday evening and I’m back home to my parents home for a few days. With the rapidly increasing corona cases in India, it looks like the country might have to go into another lockdown. And if it does, the economy is going to tank further. This time it might push a lot more people further into poverty. It would not be ideal.

How does this affect me? Since I switched jobs, if things aren’t doing well with the company, I’m pretty sure I’d be the first target to be laid off. Back in 2020, when our company trimmed down the newest hires were the first to go.

On top of it the tenant has given us a notice that they are leaving. They stuck to the contract for six months. They wanted to leave earlier but the contract had a lock in period of six months. Now, this doesn’t affect me as I’m not really dependent on the rental amount. In fact, the rental amount is used to overpay the monthly EMI to quickly clear off the housing loan. It’s recommended to not pay off the housing loan as it’s the lowest interest rate loan one can get. To me, it gives me mental peace knowing that I can clear off the loan quicker. Besides, when I made the purchase I didn’t purchase it for the income but for asset appreciation in the next couple of years. Income is an added bonus.

I’ve informed the property manager / agent to look for new tenants. However, it seems difficult given the current situation. If another lockdown is given, there’s a high likelihood that the apartment would be empty for a few months yet again. Back when I made the purchase, the apartment was empty for quite a few months since we entered the second lockdown and some construction that I wanted to make do before giving it out for rent were delays significantly.

Since it’s been some time I’ve updated on my Mortgage, here’s how I’m doing –

Mortgage Remaining68901016855275

After a year of paying off the loan it still feels like there hasn’t been any change in the outstanding amount. At all. What sorcery is this?

Recently a relative purchased a second home where he mentioned that he plans to pay off the 20 year loan in 7 years! Such a great plan. Since we were in middle of discussing some other important topic, I didn’t get to prod them more. I plan to correct it though. I’ve read of strategies such as increasing your EMI by 5% every year as and when you get raises. That sounds plausible. But are there any other more such strategies? 5% increase sounds too low to me.

Share how you’re planning on paying off your home loan quicker.

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