The decision of buying or renting a home lies in the personal preference of the investor. It depends on various factors like the home buyer’s financial situation, lifestyle, and personal goals. Even though it is a matter of choice and affordability, we are providing you with comprehensive pros and cons for both buying and renting a home in today’s time. In the recent bimonthly monetary policy meeting, RBI (reserve Bank of India) chose to increase the repo rate to 6.50%. As a result, in the current rate cycle, the question arises of what should a real estate investor choose to do. Whether they should buy or rent a property?
Here are a few pros and cons for both options of real estate investment.
BUYING A HOME
Even though the interest rates are at their peak, and may appear to the layman that it may be best to wait it out. However, one thing that a real estate investor should keep in mind is that the rate follows a cycle and a home loan is usually for a very long term. Therefore it only makes sense that if one is confident in being able to service the loan for the long term, as a real estate investor you should go and buy the house, considering that the real estate prices are also on an upward swing. Homeownership often brings various intangible benefits, like it’s almost an ambitious dream to own a home for most Indians. Some of the other pros of owning a home include pride of ownership, stability, and a sense of belonging to a community.
Some of the cons of owning a home include that at most times the overall cost of owning a house becomes much higher than the cost of renting a house. Also, the choice of ownership carries the burden of location. Most often the home that you can afford to buy is in a far-off location, whereas you can enjoy a lifestyle in the downtown at a rented home. Also as a house owner, you have to bear the burden of maintenance including all costs of repairs.
RENTING A HOME
The biggest advantage of renting a home is the ability to move whenever without any penalty – the moment the lease ends. Renting a home offers the flexibility to move and enjoy different localities and communities. Also if you choose to live on rent, you can claim the tax benefit on your House Rent Allowance (HRA). In a rented property, one can enjoy the same monthly payment. Also when it comes to maintenance, the landlord pays for repairs and covers all expenses. Some of the disadvantages of renting a home are that the landowner may anytime decide to sell the property, thus leaving you with a feeling of unsettlement. Besides in a rented property, one does not enjoy the pride of owning a home, the fulfillment, and the feeling of being settled that comes with buying a house.
