Living on Rent Vs Buying a House

May 2, 2007	(2 votes, average: 1.5 out of 5)  Loading ...
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Owning your own home can be a challenging task. A metropolitan man earning handsome salary will either live in a rented house or take a home loan and buy residential property for himself. However, with interest rates on home loans already climbing, this has also become a question that is aggravating the financing problem.

An affordability gap has come up as a consequence of the crushing combination of high home costs and lagging incomes. Prices of residential property in India have clearly outwaged wages. This can at times put you in dilemma whether to choose a rented house or to buy it.

The cost of living in metros is generally high. Both buying a house and renting it have own set of costs attached to them. For that reason, you should always evaluate the available options closely before narrowing down on any.

Paying rent often takes away a substantial amount of money which varies according to the kind of location and the area of property. Moreover, you cannot avail any financing options for the rented house as you may do while buying a house.

Indeed, taking a loan also has its own advantages and disadvantages. In case you buy a home loan from any housing finance companies (HFCs), you may find the total repayments exceeding the actual value of the house. And, this is a major factor which may discourage you.

So, what should be the parameters to agree on whether to buy or rent a house?

To save on rent: Buying a house helps you to freeze your monthly payments. You can stop paying once the loan is paid off. And this is certainly the biggest advantage. However, taking a house on rent does not provide you with such an option.

Moving out: If you expect to be moving in every couple of years or more then you probably should avoid buying your own home. Also, when the lease is up or for any other reason, you can just move at anytime if you are living in a rented premise. This is the gem that makes renting a house worthwhile.

Investment perspective: Though, living on rent would certainly be a pure expenditure, buying a house can be looked upon as an investment, as an asset is created for the home buyer. Moreover, the value of the asset always increases over the period of time which is a critical factor that most overlook.

News Published Under:   Real Estate India |