Should I Rent or Buy a House

Introduction : Rent or Buy

There is a lot of debate in the market nowadays regarding whether you should rent or buy a house. Sometimes due to Real Estate attractiveness or real estate agents, advertisement of homes for sale or land for sale, renting to owning etc, they get confused. In this discussion, we will explore the pros and cons of both options and provide a conclusion to help you make an informed decision, considering various benefits, advantages, and disadvantages of renting or buying a home.

Pros of Renting a Home

When you rent a home, you can easily shift from one place to another depending on your job location, neighborhood issues, distance to your child's school, or any other factors. Additionally:

1. You are free from maintenance or repairs of the house.
2. The depreciation cost of the house doesn't affect you.
3. Any repairs needed can be requested from the house owner, who will take care of them.
4. You are not in debt because you don't need to take out a housing loan, which frees you mentally.
5. Ready to Shift anytime and Hassle free.
6. Can Relocate easily if annoyed by Neighbours.

Cons of Renting a House

However, renting a house also comes with its downsides, including:

1. You may not receive the same level of respect in society because you are a tenant.
2. You do not own any asset for future prospects.
3. Property rent can increase each year, impacting your finances.
4. You may have to vacate the house suddenly due to the landlord's decisions.

Illustrative Example

Let's consider an example to compare renting and buying:

• House purchase price: 50 lakhs
• Monthly rental income: 10,000 to 12,000 (around 1.2 lakhs per annum)
• Property loan interest: 10% per annum (around 4 to 5 lakhs per annum)
• Approximate monthly EMI: 50,000 rupees

Instead of buying a home, you could invest the money and deposit 30,000 rupees per month in a SIP that yields around 10% interest per annum.

Conclusion

While I won't provide all the detailed calculations, it's essential to note that property appreciation over the next 5 to 10 years will likely be comparable to your investments. By choosing not to have an EMI burden, you can maintain better liquidity. However, it's also important to consider that every family should aim to own at least one house for long-term stability and security. The decision ultimately depends on your unique circumstances and goals.