Buy vs Rent a House

Should I buy or rent a house? This is a big question, which has to be answered considering your lifestyle, preferences, investment objectives, family needs, type of employment and so on. A majority of young people start their independent lives, staying in a rented apartment. They choose to buy a house once they have a stable job and start a family. By this time, the property prices would have appreciated big-time, making the purchase unaffordable. This is especially true in metro cities.

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Buy vs Rent a House

Benefits of Buying a House

• Buying a home offers safety and security as well as increase in the value of the property.
• The market price of a house property is expected to appreciate over a period of time, making this a profitable investment.
• You may enjoy a peaceful living without facing the restrictions imposed by the neighbors.
• Once you buy a house, it can be renovated or decorated according to your preferences and requirements.
• You can rent the property and the monthly rentals can be used to pay the home loan EMIs if you had availed a home loan to buy a house. (This would usually be done for a second house).
• When you avail a home loan to purchase a house, you get a tax deduction of Rs 2 Lakhs a year under Section 24 on home loan interest repayments and Rs 1.5 Lakh a year under Section 80C of the income tax act. First-time home buyers get an additional Rs 50,000 a year on home loan interest payments under Section 80EE.

See Also: Should You Buy A House Or Stay On Rent?

Demerits of Buying a House

• A homeowner must pay property taxes, maintenance expenses and even avail home insurance.
• The value of a house property may not appreciate if the location becomes less desirable. A Recession and high-interest rates are other influencers.
• Tenants can easily shift from one location to another after serving the predetermined notice period, buying a home may not be a good idea if you are expected to work in different locations.

Merits of Renting a House

• Renting a house property offers flexibility vis-a-vis owning a house and is not a long-term commitment.
• Vacating a house is much easier than the headaches involved in buying a new house. 
• Staying in a rented property is a good idea if you cannot afford to buy a house.

See Also: 10 Things To Consider Before Buying A Home

Disadvantages of Renting a House

• You can neither earn return on investment nor create wealth if you reside in a rented house.
• A tenant has no control over yearly rental variations that are impacted by inflation.
• Unlike a homeowner, tenants cannot enjoy total freedom and cannot make any changes to the property.

Bottom Line

Buy vs rent a home is a healthy debate, which has been in existence for several years. Before you buy or rent a house, spare a thought to understand the advantages and disadvantages of each option and take a decision accordingly.

See Also: 4 Things Before Buying A Home

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