The buying versus renting debate

The debate over ‘Buying Versus Renting’ has been going on for the longest time now. Since property transactions involve large sums of money, this is a huge decision. People sometime use their lifetime of saving to buy an apartment. In metropolitan cities, where the cost is so high, it is almost impossible for a common man, to buy a house in his lifetime. But we associate pride and honor with property in India. Owning their own house or land is every man’s dream in India and the common man saves every penny he can in the hope of this dream. You can search for your dream home or property from any real estate Mumbai Firm.

But Urban Indian’s are realizing the futility of this exercise and are rethinking if they should put all their sweat and blood towards a dream of owning a house in the future. After all is this the smartest investment decision? Let’s find out.

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Personal Choice

Owing your home is a good bet for a lot of people, but not for financial reasons. If you want to live in the home you want to buy, then this home becomes a liability, not an asset. Which means you will have to shell out money frequently to maintain this house, but it will not give you any financial gain.

But this can also be a cause of relief to many. You are not at the mercy of your landlord. If you are renting flats in Mumbai, then you have the additional tension of relocating every year as most house contacts here last for only a year, and most property owners refrain from renting out an apartment to the same tenant, for more than two consecutive years.

Additional there is the freedom to do what you want with the house- be it the renovations or your lifestyle. You know you are not answerable to anyone, and this can be liberating. Also once you own a flat, you know that come what may, you will always have a roof over your head.

The Pros to Renting

The crazy property prices in metro cities, which are not even in proportion to inflation, make it wiser to rent an apartment, even if your income is high. For example- If you are planning to by a flat for 2Crs, you will have to gather at least 40lakhs as down payment. Plus every month 40 percent of your salary will go towards your EMI payment. It will take years to repay your loan, and every month for many years you will have to live on a strict budget since almost half your salary is going towards your house payments. In the end due to the high loan rate, you end up paying 2 to 3 times the initial cost of your house!

In this scenario it is better to rent an apartment and save up money. If you really want to own a house, it’s better to buy one in the suburbs or in your hometown where property rates are lower.

The Pros to Buying

In addition to the mental relief, there are some other pros to buying. Once you buy your own house, your monthly expenses are reduced. Apart from paying your electricity, water and maintenance bills, you will not be shelling out huge amounts of money every month for your housing. If you are earning a good income, you can spend this money on your life style, travel, children’s education, invest further or just save up. You are assured of having your own house after your retirement or in your old age, when you are not able to work.

There are pros and cons to both buying and renting. This decision has to be made considering your income, lifestyle and future goals in mind.

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