Buy Vs Rent is a nonending debate which is continuing since ages. Whether to buy or rent a home is a common question one may face in their life. Taking a wiser decision is important but it is not that easy to chose one of them. Especially when you are living in the urban areas like Mumbai, Navi Mumbai, Pune, or Chennai then it becomes even more tough decision as buying home in these cities is very costly. Even if you are making handsome amount of money, buying home is still difficult.

If you are new to the city life then you might not have seen people borrowing lacs of money from bank to buy a home. But one thing is sure buying a home with home loan is always a better option than to rent a home in urban cities.

Buy or Rent Home

Here is the reason why buying home is much better than renting home.

We will take an example of a person who wants to stay in the apartment in Navi Mumbai. Suppose he is paying a rent 12K and the property value of the same home is about Rs. 50Lacs.

Suppose in case he thinks of buying the home in the same building or the property that matches similar to his home and costs Rs. 50 Lacs. Then at very first he will need a down-payment of Rs. 10 Lacs, and will need to take Rs. 40 lacs home loan from the bank or any money lending company. He will need to pay the EMI to the bank like @ 7.00% (as per present interest rates), he will need to pay Rs. 31,000 as a EMI to the bank for the next 20 years.

In this case you could see he is paying Rs. 19,000 more for EMI than his present rent of Rs. 12K i.e. approx. 2.55 % more, he is paying as a EMI.

Looking at this example you may think why he should go for buying a home if he has to pay multiple times than the present rent.

The reason is simple if he buys the house he may get advantages of the following things that he may not get in the rented house.

Advantages of Buying Own Home

1. You will get a security of staying in own home
2. No more bossing from owner
3. Can do own interior work
4. Eventually after 20 years you will not need to pay anything and will have your own assets which will have a value multiple times than he bought now.
5. Will have feeling of ownership and will get rid of feeling of wasting money in rent (as one may think the rent that one pays never give them back anything than just a shelter for a month).
6. It will help him to do forced saving for down-payments and EMI. Eventually he will get more sensitive about wasting money on unwanted things.
7. If the habit of saving money inculcate forever then he can even opt in for early repayment of home loan, which further help you to save on interest to be paid.
8. You can also take an advantage of ITR filing against your home loan and save money on your income tax.
9. Your EMI will remain same and will not increase by 10 % like the rent increases every year by 10 %
10. Will have a feeling of stability.

Fewer Disadvantage About Buying Own Home

1. You might not be able to switch job far from your home. Else might need to rent a home again in case you switch the city.
2. You might not get to stay in luxury homes because of budget constraint.
3. Will need to pay maintenance for your property
4. It will be a Long Term financial responsibility once you start with the EMI you can not take a break in between
5. Not feasible option for those who lives not more than two years at one place

Many people often seen working on saving down-payment, so as to buy a lavish home of their own. But here is a twist more you wait more will be asset value and more will be the down-payment. In such scenario it is better to buy a home within your budget weather it is lavish or not. Buying a home as much early as possible is a wise decision.

But for many people buying home do not seems feasible as they have jobs which often need to change cities. Few people also can not indulge in long term financial liabilities as they do not have persistence and fixed set of income sources from where they can pay the EMI. And many people do not buy a home till retirement, and wait till the time they get lump some amount of money as retirement benefits for investment at once.

There are people even who stays purposely in the rented house to live burden free from the hefty amount of EMI. And there are people who keep on investing their money in their businesses rather than building a property.

Conclusion

After all the Decision is yours but with respect to the above debate in can be concluded that buying home is always a better option than renting a home. If you do not have bottlenecks, then is always a wiser decision to live in own home than a rented one.

Navi Mumbai Houses is an online portal to search rental properties in Kharghar and other Navi Mumbai area.