Real Estate: Renting vs Buying a Home: Pros and Cons
Rent reduction: The rent will be less than the EMI home loan. In NCR, you can rent a house Rs 1 crore, 3-BHK for Rs 15,000-25,000, but the EMI with 40% @ 7% down payment will be Rs 46,500 per month for 20 years.
Deposit: You don’t need to rack up a big down payment at the start of your career. For rental, you only need to provide a 2-3 month security deposit in advance.
No additional costs: You don’t have to worry about paying property tax, maintenance fees, repair bills, parking fees, etc.
Ease of task sorting: You don’t have to worry about house maintenance or renting if you need to change cities or countries for your job.
Location flexibility: You can decide where to rent based on proximity to work or school, reducing your transportation costs.
Build an asset: The amount you spend on rent can be used to pay the EMI home loan for building a lifetime asset.
Fiscal advantages: You can get a tax deduction of up to Rs 2 lakh on interest paid for a detached house under Section 24, and Rs 1.5 lakh under Section 80C on the principal amount.
Low Lending Rate, Higher Appreciation: Currently, home loan rates are low at 6-7%. Real estate prices should appreciate after the fall of recent years.
No hassle of moving: You don’t have to constantly worry about moving if the landlord wants you to leave.
No owner problem: You don’t have to put up with the whims of the landlord when it comes to maintaining the home or arguing over who will pay for repairs, painting, and other upkeep.
Emotional safety: Having your own home provides peace and mental stability and the freedom to keep it as you wish.
Increase in rents: Besides the 8-10% annual increase, the landlord can increase the rent at any time or ask you to evict.
No tax benefit: You do not benefit from any tax incentive for renting.
No freedom: You have no choice but to alter or make structural changes to the home without the owner’s approval.
Exit after retirement: You will have to continue paying rent after you retire when you have no source of income.
Company limits: You will need to adhere to company rules, which may include restrictions on pets, limited vehicles, etc.
More expensive: Buying a house is more expensive than renting. in addition to the initial purchase cost, you must pay maintenance, property tax, renovation and repair costs.
Illiquid assets: Real estate has much lower liquidity, which means that if you need cash, you cannot sell a house immediately.
Depreciation: As we have seen in recent years, there is no guarantee that property prices will always increase