Renting vs Buying A Home

Rising income levels have led to increasing levels of disposable incomes and with that the need

for appropriate channels for long term investments. A few decades ago, owning a home was

something people thought about in the later stages of life, say post 45 years. However, this has

gradually come down and an increasing number of youngsters – starting in the age group of 25 to

30 years are considering buying a home for themselves.

At the same time, there is an increased mobility in the job market; an aspiration for greater freedom

and disincline towards settling down at one particular geographic location. This makes for an

interest analysis of the question, is buying a home as opposed to renting one really advantageous

for the consumer in the present times.

Firstly, the best advantage of buying a home is that it gives you a sense of ownership of a huge

asset very early in your life. It grounds you and is a definite sign of success. A home is a place that

shapes most of your dreams, aspirations and of course lifestyle. Thus home ownership at an early

stage in one’s life is a big plus.

Real Estate investment, if made with sound advice and appropriate location, is an appreciating

asset. Which means that those who invest early can take advantage of lower purchasing price and

an appreciating value year-on-year. The easy availability of credit, increasing rental prices also

make home ownership an attractive investment vehicle.

The factors one must give consideration to while evaluating the question of buying a home versus

renting one are given below:

- Your current financial strength

- Stability of your existing income and projected income

- Your current and future expenditure

- The ease of disposability for a property you plan to acquire

Buying a home gives you freedom from monthly rental which often can be equal to the EMI you

might be paying. Although, one must factor in the booking amount, registration, overheads and

monthly maintenance charges. Yearly taxes, depreciation and other incidentals must also be taken

into account.

Home buying is not an isolated decision and therefore must be taken in context of what your daily

needs are, what are the amenities you absolutely need. The location. The price. And of course the

consent & happiness of your immediate family.