A COMPARATIVE SNAPSHOT – BUYING VS RENTING

Among several questions that every millennial needs to face, one important question is, “Which is better? Buying a house or renting?” To find the answer to this question one has to undertake an extensive amount of research. We can’t conclude which is better outrightly. But however, a brief analysis weighing the pros and cons of both options will be the first logical step. This blog presents you with a snapshot of the advantages and disadvantages of renting vs buying a house.

THE BENEFITS OF RENTING:
To begin with the discussion of ‘rent a house vs buy’, let us look into the pros of renting a house/apartment first:

1. Rent is cheaper:
Paying rent is comparatively cheaper than paying the EMI of the home loan. For instance, let us take a decent 3 BHK flat in Bangalore of Rs 1 crore, in downtown with good connectivity. The rent for such an apartment might be easily 15k to 25K. But the EMI with roughly 40% down payment of 7% will amount to Rs 46,500 per month for 20 yrs. Do the math!

2. NO head-ache of down payment:
Paying the down payment involves setting aside a huge chunk of cash at one ego. On the other hand, if you take the security deposit for renting an apartment it would just be for a short term of 2-3 months rent.

3. ‘0’ allied costs:
There is no headache of complicated taxes like property tax, maintenance costs, repair bills, parking charges etc.

4. Convenience:
The nature of jobs of the millennials is highly nomadic. Frequent shifts, transfers and promotions can be supported only in the case of a rented apartment.

5. Flexibility:
Nowadays you find good apartments almost in every key location. For instance, in Bangalore, if you search for 2 BHK apartments in Sarjapur road, Apartments in Whitefield or Flats in Electronic City, the search results will be too voluminous that one might get literally tired. Thus, you will be able to find a good apartment in every location you desire. And you can easily shift to the new location in search of proximity to a desired workplace or school, bringing down your transportation costs.

Benefits of buying a house:

• • An asset: renting a house can never earn an asset for you. The rent paid will be just an expense every month and not an investment. There is almost ‘0’. But by buying an apartment the amount of tangible and intangible benefits will be enormous.
  • Claim Tax benefits:It is a known fact that, under Section 24, one can claim a tax deduction of up to Rs 2 lakh on the interest paid for self-occupied homes, and Rs 1.5 lakh under Section 80C on the principal amount. Why miss it?
  • Higher appreciation:Currently, property prices are set to appreciate after the fall in the past few years of high COVID. Especially in metropolitan cities, there are a lot of prominent real estate builders in Bangalore, Chennai, Hyderabad, Bombay etc who offer affordable homes in key areas of rising property value.

• Sense of security:Buying a house will always deliver a feeling of security both physically and mentally. You can never experience the same. Fighting with the landlord for every trivial thing like repairs, maintenance etc can be avoided.

Conclusion:
However, the above-stated benefits of buying vs renting are subjective on other factors like market trends, budget, individual financial goals and a lot more. Stay smart and weigh the pros & cons fairly, to strike the right balance!