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Buying Vs Renting a House

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By Venture Briks

Buying Vs Renting a House

March 30, 2021

As an investor, one should consider both options Buying & Renting . The option which suits the most considering the pros and cons involved should be choosen .

At present, buying a home has typically become a dream of every Indian, considering the sky-rocketing property prices especially in cosmopolitan cities. This has led people to opt for renting rather than buying. However, for people who can afford to buy a house, the choice between buying and renting is always a daunting task. In the Indian context, it is observed that people who can afford to buy a house tend to put more weightage on owning a house and renting mostly becomes a compromise. There are definite advantages and disadvantages. Let us have a look:

Advantages of owning a home

# Real-estate investment is a safe investment backed by a real asset which has potential of capital appreciation and tax benefits.

# It gives a sense of security and pride of home ownership.

# Rent is an expense that is incurred every month without creating any physical asset.Paying EMI, however, has dual benefits; it not only provides for a one month of shelter, but also increases the proportional ownership in the house.

# With renting you often have to relocate which entails a lot of wasted time, money and energy, but that is not the case with owning.

Advantages of renting:

# Renting does not overburden one with EMI payments, house tax and other legal issues that are part and parcel of property ownership.

# Renting generally gives a feeling of lower liability. In metro cities you can rent a house worth Rs 50 lakh for only Rs 10,000-15,000 a month. At the same time, if you buy a home at the same cost, you have to shell out anywhere from Rs 30,000 – 40,000 as an EMI (equated monthly instalment).

# One can rent closer to work or closer to good schools, but the same properties may or may not be affordable or within one’s budget.

So choose what suits your pocket size, your comfort. After all, investments are done for long term basis.