Buy A Home Or Rent A Home
November 11, 2016
For years now, conventional wisdom has dictated that buying one’s own house as soon as one can is a wise decision. But in the past decade, this wisdom has been turned upside down on its head, as there is an emerging section which thinksexactly the opposite - investinga huge amount in buying a property isn’t all that viable.
Truth be told, both the options have their pros & cons, so to decode the wiser decision between buying a house and renting it, you’d need a perspective. If you were to ask us, we would say buying a home is always the wiser decision, sohere we’ll look at what you can lose if you continue to live in a rented house versus what do you stand to gain if you plan to buy a home of your own.
Rent as monthly expenditure: Is it worth it or not?
When you live in a rented property, you have to pay a fixed monthly amount to the landlord. It is not always a sensible decision to pay a hefty amount (because rented homes are not very affordablenowadays) just to live in a property that’s not your own.Instead, you can transform the amount that you pay as rent to your landlord into EMIs for your own home. This way, by paying monthly payments, you are not just buying a place to live; you are little by little building one of the strongest assets of your life.
Early Financial Discipline
Since you would be paying the home loan EMI every month, you will have to budget your other expenses as per the amount you pay towards Home Loan EMI, while also diverting a specific amount towards your savings.
For a home loan that is backed by mortgage guarantee, the tenure is relatively longer, which means that you’ll be paying a comparatively lower EMI amount per month. What’s also worth noting here is that you are building your very own asset in the process, which adds further motivation to inculcating financial discipline from an early age.
On the other hand, that isn’t the case with rented property. Rented property brings fixed monthly expenses which will increase year on year, without any flexibility, making it difficult to keep a tab on your expenses or be financially disciplined.
Security and stability in own house vs. in rented house
If you have ever lived in a rented house, you must be aware of the instability associated with it and that ‘ever so often’ pain of relocating as well. And then there are the rent hikes or a sudden notice of vacating the property for some reason or the other. The permanent solution to this annoyance is to invest in a house of your own.
An ideal way to make investment
To invest is to ensure a protected future. Every person has to think of some way or the other to invest his savings and earn good ROI. If you live in a rented property and are planning to invest your hard earned money, then a sensible decision would be to invest in a real estate property. With the increasing inflation and the rising demand for property, real estateprices too are bound to rise in the future.That is why it is always better to make an investment in real estate as and when you can. The earlier you invest in a property, the higher will be the growth in its value.
Privacy in own house vs. Privacy in rented house
Living in a rented property means frequent visits by landlords for random checks. It also means that you cannot even hammer a single nail on the wall without getting permission. This is definitely not the case with a self-owned house. You can experiment with anything and everything in your own house, because it is your very own humble abode!
Benefit of tax redemption
While tenants cannot avail tax benefits on a rented property, there are several tax benefits which government exclusively offers to homeowners. This is definitely an important benefit when purchasing your own house.
Above all, there is a reason which cannot really be quantified -Pride. The feeling of ownership brings a pride of accomplishing and achieving something big in life. So there it is; our take on why owning a home is a tremendously prudent investment. What’s yours?