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Whenever the question of moving into a new home is contemplated, the question of buying or renting a home is definitely going to come up. With the sky-rocketing prices of property, especially in the urban zones, the tendency is usually to rent. However, the majority of people in India consider the buying of a home as a milestone event.
But before that, it’s very important to understand what we are going to be talking about! Let us first learn basics before we proceed with purchasing or leasing a home:
when buying a home, the full value of the property is paid to the owner or the vendor. The property is transferred into your name, and you can reside in your property, rent it out, sell it later, or leave it as inheritance for your offspring.
When a person rents a house, he makes a lease agreement with the owner of the house for residing on the property for a certain period against a fixed price (rent). The agreement can be extended or renewed according to the option decided by the landlord and the tenant.
Now, every option has its corresponding set of financial implications and pros and cons. Thus, if you are confronted with the question of renting or buying a home in India in 2024, you are here.
We will cover all the critical factors, which will enable you to make an informed decision.
In a rented house you cannot make changes that you want to. But when it comes to your own home, you can do whatever pleases you. A house which is owned, doesn’t require you to get permission from outside to make any interior changes. Alterations in a rented home is not possible unlike a home that’s owned.
Financial experts and the investors within the market are quite clear about their views towards the hike in the real estate sector. They are certain that prices will go higher every year, and therefore investing in a house may yield profit for you in the future and build an asset for the generations to come.
Once the home loan is settled, all you have to pay is the maintenance fees, which are much lower than the rent. Thus, the amount saved can be invested somewhere else or used for enhancing your lifestyle. Further, it is advisable to purchase a home when you have children. You can also make them the legal heir of the property, which would entitle them to claim the house later.
The rent that you pay for living in a flat goes to the landlord. But when you invest that same amount in a monthly installment towards your home, it actually becomes your investment into an asset. A decent liability of EMI can build your future and make an investment which could earn a good profit.
You will need some regular maintenances while living in a house, and for a rental house, you will need to wait for your landlord’s authorization to make any repair. But when it comes to undertaking repairs in your own home, then you no longer are reliable on someone else’s decision and permission.
Where tax benefits are concerned, it is better to go for mortgage loans rather than rent options. You are not just able to claim tax benefits on the interest portion but also the principal portion. Filing the details of a home loan will cover most of your income for tax savings options, and hence becomes a preferred choice.
Some additional benefits of owning an appreciating asset are the following:
Irrespective of how the “rent or buy” question is considered, the option is buying. With the improvement in affordability with the rise in income levels, higher disposable incomes, accessible and innovative loan facilities, and tax advantages, purchasing a home seems like a practical and beneficial choice in the long run.
