Which one is better: Living on rent or buying a house?

Should you go for owning a home or living on rent?

It is really a BIG decision.

Every person wants to have a house of his own. Still, most of us spend the majority of our lifetimes in rented accommodations due to professional or financial reasons.

If you too are facing the confusion of buying a home or renting a house, this article is for you.

Which one is better

Here are some of the important factors you must consider before deciding the best option for you –

Living on rent

Advantages –

-Costs less than buying a property.

-Can shift anytime.

-Little paperwork.

– No property taxes.

Disadvantages –

May need to pay a hefty security deposit to the landlord.
Rising rents.
May not fit your lifestyle.
Shifting frequently is a laborious process.

Homeownership

Advantages –

Security and stability.
No landlord’s interference.
No need to worry about increasing rents.
Can modify your place as you want.
Good of wealth creation. It can be considered an investment as the property prices increase over a period of time.

Disadvantages-

Have to pay EMIs for years.
Pay for home repairs and maintenance.
Real estate value can decline.

Both options have some great valid points. Your decision must be based on your financial health as well as your personal and professional goals.

Here are some important questions that you should ask yourself before making the decision –

Does your financial situation allow you to spend a big chunk of your savings on buying a property in your desired location?

Is your job or business stable?

Do you have sufficient means to afford to pay the EMIs for a long time?

How long do you want to stay in the city?

If you change cities often because of the nature of your job, it is better to live on rent. It is a good option for people to have shelter for themselves in an unfamiliar place with spending much money. You don’t need to pay taxes, mortgage payments, interests, monthly maintenance and repairs, and other hidden expenses, as that is the landlord’s responsibility. If you are not going to live in the city for more than 4-5 years, it is not advisable to buy a home.

Also, before buying a property at a new location, you can rent for some time to get to know the neighborhood better.

Buying a house is more of an emotional decision, rather than a financial one. Many of us consider it a wastage of money to pay the monthly rent to the landlord. If you are going to stay in the same city for a long time, say 10-15 years, you can go for buying a house. Although the property prices are sky-rocketing, low-interest rates have made it possible for a common man to opt for a home loan and afford to have his own place which he can call home.

When the property prices go up, you can make good money by selling it on the higher value. Living on rent for a long time can cost higher than buying a house. But take the decision of buying a home only if you are financially capable of paying the down payment and then pay the EMIs for 20-30 years. You must save sufficient money for your monthly expenses after making the monthly payments. Also check the real estate prices, interest rates, tenure, appreciation rate, etc carefully before going for a home loan.

So what do you think makes the most sense? What option suits you better? Please let us know what you think in the comment section below.