By Arosh John, Founder, John Real Estate (MahaRERA Reg. No. A51700001835) | Editor-in-Chief, Thane Real Estate News (TREN)
Thane–MMR | January 2026
This is not a problem for end-users. A self-occupied home can still justify itself through life utility—stability, location, schooling, and routine. The maths still matters, but the “return” is partly emotional and practical.
This is an investor’s problem.
You bought expecting compounding. Instead, you got a flat chart. And on top of that, you’ve been paying an 8% home loan—month after month—while the asset refuses to behave like an investment.
So the question is not emotional. It is commercial:
If the property hasn’t appreciated in 5–7 years, and a loan is still running, are you holding an asset—or funding a mistake?
The First Truth: Time Doesn’t Heal Weak Investments
Many investors treat real estate like a moral project: “Hold long enough and it will reward you.”
That belief is comforting—and often expensive.
In leveraged real estate, time only helps if one of two things happens:
- The property begins to appreciate meaningfully, or
- The property carries itself through rent, so you can wait without bleeding.
If neither is true, holding is not patience. It is inertia.
The Second Truth: With A Loan, You Are Running Negative Carry Unless The Rent Is Strong
An investment property with a loan is a spread trade:
- Your cost of capital is the loan rate (here, ~8%).
- Your return must come from:
- Price appreciation, and/or
- Net rent (after vacancy, maintenance, and repairs), and/or
- Equity build-up via principal repayment.
If the property stays flat and the rent is average, the investor quietly funds the gap every month. That gap is the real pain—not just the flat price.
Get The Loan Math Correct: This Is How Home Loans Actually Work
Most Mumbai/Thane home loans are monthly reducing balance loans:
- Interest is calculated monthly on the outstanding principal:
Monthly interest = Outstanding principal × (8% ÷ 12) - The EMI stays broadly fixed (unless the rate resets).
- Early EMIs are interest-heavy. Principal repayment accelerates later.
So for the first 5–7 years, even disciplined EMI payments can feel like running on a treadmill. That is not imagination. That is amortisation.
The 8% Example: Clean Numbers
Loan: ₹80,00,000
Tenure: 20 years
Rate: 8% p.a.
EMI: ≈ ₹66,915/month
After 7 years (84 months):
- Total paid: ≈ ₹56.21 lakh
- Principal repaid: ≈ ₹15.23 lakh
- Interest paid: ≈ ₹40.98 lakh
- Outstanding principal: ≈ ₹64.78 lakh
Now read that again like an investor.
If the property value is still around your purchase price after 7 years, you did build equity—yes. But you paid roughly ₹41 lakh in interest for the privilege of waiting.
That is why “no appreciation + loan running” is not a small issue. It is a structural one.
Stop Looking Backwards: Decide Based On Forward Return
The worst mistake investors make is anchoring to the past:
“I have already paid so much, so I should hold.”
That is sunk-cost thinking. Markets don’t reward sunk costs. They reward forward returns.
Your decision should be based on this single question:
From today, over the next 3–5 years, is this property likely to outperform your realistic alternatives—after costs and friction?
If the answer is no, holding longer rarely fixes it. It usually delays the inevitable—at a monthly price.
The 4-Number Exit Test: A Professional Way To Decide
Before you decide “hold vs sell,” calculate four numbers correctly.
1) Realisable Sale Price
Not what portals show. Not what your neighbour claims. What similar units in the same project are actually closing at.
2) Total Exit Cost
Brokerage, legal, loan foreclosure/admin charges, minor repairs/painting, dues, and the cost of transition.
3) Net Equity You Will Actually Walk Away With
Sale price minus:
- outstanding loan
- exit costs
- any pending dues
This is your “released capital.”
4) Redeployment Return On That Capital
This is the decisive number.
Ask: If I free up this equity, can I redeploy it into something that compounds faster—with greater visibility and less friction?
Sometimes the best redeployment is the simplest: reducing debt. A part-prepayment gives a return roughly equal to your loan rate—a clean 8% equivalent in saved interest, with zero market risk.
When Holding Is Rational For An Investor
Hold only if at least one of these is clearly true (not “maybe” true):
1) Cash Flow Can Become Near-Neutral
If net rent (after vacancy and all outgoings) meaningfully offsets the interest burden, time becomes your friend again.
2) You Have A Credible Catalyst—Not A Vibe
A catalyst is something that changes buyer behaviour within a believable timeframe:
- measurable connectivity improvement
- visible commercial absorption
- redevelopment trajectory
- supply constraint in the micro-market
If you cannot name the catalyst and timeline, you don’t have a thesis. You have hope.
3) You Can Materially Reduce Your Cost Of Capital
Refinance, rate reset, or meaningful part-prepayment. Sometimes the correct move is not selling the asset. It is fixing the loan.
When You Should Exit: Investment-Only Decision
Exit becomes the professional decision when these are true:
- Appreciation has been flat for years, and there is no credible forward catalyst
- Rental demand is weak, or vacancy cycles keep repeating
- Society quality is slipping, maintenance collection is unstable, or capex is looming
- Liquidity is low (few serious buyers at your expected price)
- Your EMI is choking off better opportunities
In these cases, holding is not “long-term investing.” It is paying for denial in instalments.
Conclusion
If a property hasn’t appreciated in 5–7 years while a home loan runs at ~8%, the investor must stop treating the decision as an emotional one.
You hold only when the forward maths supports it:
- Cash Flow improves, or
- Appreciation has a credible trigger, or
- Loan cost can be reduced meaningfully.
If none of these exist, the disciplined move is to exit cleanly and redeploy.
Because investors don’t win by being loyal to an asset. They win by being loyal to returns.
Also READ: Selling Property with a Loan in Thane & Mumbai – Step-by-Step Guide
Also READ: Why Buying a Home Beats Renting (If Your Finances Allow): Myths, Math & Reality
About The Author
Arosh John is the Founder of John Real Estate (MahaRERA Reg. No. A51700001835) and Editor-in-Chief of Thane Real Estate News (TREN). With over a decade of on-ground transaction experience across Thane’s premium resale market, luxury villas, and NRI-focused investment advisory, he is widely recognised for combining micro-market intelligence with documentation discipline and pricing realism. Arosh advises buyers and investors on entry timing, resale liquidity, negotiation strategy, risk checks, and capital allocation—with a clear focus on protecting downside and improving long-term outcomes in Thane–MMR.
Disclaimer
This editorial is for general information and market education only. It does not constitute financial, legal, tax, or investment advice. Real estate outcomes depend on location, building quality, legal status, loan terms, and market conditions. Readers should consult qualified professionals and verify facts independently before making any purchase, sale, or loan decision.
