I am writing this from a Canadian perspective, so some of my assumptions vis-a-vis mortgages and the housing market may not apply to Pakistan.
There are a probably at least 10 different responses to your questions, and each response boils down to risk/reward/effort.
Should I buy a house for just myself and my parents (2 bed room and a guest room) or should I plan for my parents and my future wife (3 bed rooms and a guest room )?
I did the latter. Think this through: if you buy a house now for just your parents and yourself, later on you have to buy another house and go through the rigmarole of selling your current dwelling. Work effort: buying a new house, selling the old one. Risk: what if you can't find a house in the future that aligns with your preferences vis-a-vis location, income, etc.? Reward: future wife will have more input into buying said new abode, happy wife, happy life. If you buy a house now for you and future wife, Work effort in the future: none. Risk: what if the wife doesn't like the house? Reward: potentially huge cost savings against buying a new house in the future. One less thing to worry about. One less expense post-marriage, etc.
I want to be an active investor. I am 26. Shall I invest all of my salary paying for the flat every month or should I have savings for investment?
You say you have three months of salary saved away, which is great. Personally, I would go with six months, but that is just me. I don't know what mortgage options are available in Pakistan, but one option would be to have a fixed mortgage, save any excess income after paying for the flat and your regular expenses, and then on a regular basis (say every 6 months or every 12 months) make a lump-sum contribution with whatever excess savings you have. True, you will not be paying off as fast, but this way you are also building a buffer just in case something happens which your three months savings cannot cover.
Should I also save for retirement for now? Ideally I want to, but the flat is pretty costly.
Again, risk, reward. Risks of saving for retirement now: you contribute less to the flat, so the interest rates on the flat may go up when your mortgage is up for renewal. Reward: you have started saving for retirement; as an active investor, starting early will provide for more opportunities for compounding . Risks of paying the flat off completely now: you have less for retirement. Con: flat is the biggest expense, so once paid off, makes future-you less stressed financially.
Edit: I am reading Automatic Millionaire right now. It says home should be one's first and most important investment. Before investing anywhere else. Do you agree?
There are number of theories on this. Some say that owning property is foolish. Some say not owning property is foolish. Again, risk/reward/effort. I do agree that owning a home is a huge investment, but mainly because the risk of not owning ones home means that in the future I may not have the means to afford a place to live. The reward is that I do not have to worry about future-me not having a place to live. Risk of not owning a home: I am homeless in the future. Reward: I can take excess funds for investing, and hopefully have an income stream in the future that can handle any rent requirements.
As I said: there is no one correct answer to your questions. Outline each question, articulate your risk/reward/costs for each, and take it from there.
