Owning a house is everyone’s dream. Owning a house is the biggest thing most of us would achieve in life and hence it brings a sense of achievement and provides a permanent shelter for our loved ones. Owning a house is something which brings a kind of self-respect and pride within ourselves. It gives us financial security by securing our future.
But it is not possible for everyone to buy a house hence the only option left is to rent one, maybe permanently or temporarily depending on the current financial situation and future prospect of growth in income.
Owning a house is also an investment as the price of property increases day by day in almost every city so, purchasing a house is one way or another a kind of investment. But everything comes with some pro and cons. One have to consider lots of things before they reach at any decision for whether to buy a home or to live in a rented house. Let us have a look at the most important ones to find out the best way.
To Rent or Not to Rent
Benefits of a Renting House
- Living in a rented house has many flexibilities such as one being the freedom to change the residence as per requirement. Now a day job change is a common thing and job change might come with the change of location. So, if one is living in a rented house they can easily change their house according to their comfort.
- No maintenance charge is imposed on a rented house hence this can save a bit of you money on monthly basis.
- When it comes to the taxes, there are many taxes that you have to pay once you have your own house. These taxes include municipal taxes and property taxes. One is free from all these taxes if they are living in a rented house.
- Owning a house most of the time is accompanied by a home insurance. But if you live in a rented house you don’t need to save money for the home insurance premiums.
- One doesn’t have to make a big down payment when they take a house for rent. The only big expenditure can be depositing a particular amount of money as security deposit which will be returned to the renter when the rent tenure is over or when they leave that house.
The Disadvantage of Renting a House
- There is no Tax exemption for renting a house whereas you certain tax exemption can be availed when you buy a home.
- The rent of a house is not fixed. It can increase when you change the house or even your landlord can do so whenever they wants to.
- There are certain restrictions on you and your family being the tenants. such as renovation and keeping pets are not allowed in many cases.
- There is no security, privacy and feeling of accomplishment while living in a rented house.
To Buy or Not to Buy
Benefits of a Self-Owned House
Same as that of rented house buying a house also have many benefits and some of them are:
- As the price of property is growing day by day. Buying a house is surely a big investment. As how much you going to spend now on buying a house will get definitely more after selling it in future.
- Buying a home secures you and your family’s future by providing you a financial security. As by owning a house provides you an option to have a mortgage loan in future.
- One can avail several tax exemptions when they have a home that too through Home Loan.
- When you have your own home there is no need to change your home frequently because of the increased rents by the landlord.
- When you have your own home you can rent your house and move to other house whenever you need to do so.
- When you have a self-owned house, it provides a feeling of being secure and a feeling of accomplishment. It provides not only a permanent place to live in, but your family also enjoy the feeling of safety and security.
Disadvantages of a Self-Owned House
- The ownership of house comes to you after paying long tenure loan.
- For buying a home you need to make a big down payment. This down payment amount has to be paid by the borrower, and no bank gives money for the down payment. Generally the down payment is 20% of the total property cost.
- It is a fact that the EMIs are always higher than the rent.
- When you owning a house you need to give many taxes .
So, Which is a Better Option?
As from the above, it is clear that both renting and buying house have some benefits of their own along with some disadvantages, but let us now compare both of them and see which is the winning option:
- When you pay EMIs for your home loan it is worth as the ownership of the house will come to you after the tenure period will end. But when you pay rent to live in a house nothing comes to you at the end.
- When you own a house it always bring a feeling of safety and security to you and your family members as now you are no longer dependent on your landlord. Talking about financial security, owning a home makes you financially secure and stable.
- When one opt for a home loan, they borrow a particular amount and in this case the borrower knows exactly how much he/she will need to pay per month as EMI. But, in case of renting, monthly rental may vary. Which depends on the decision made by landlord and this may end up by paying higher rents only in few months.
- The decision to buy a house not only end up with saving on rents but it provides a feeling of accomplishment too. Which is difficult to have in a rented house.
- Privacy is the important thing which one can have in a self-owned house as compared to that of rented house.
- Buying a home also comes with a potential growth in the personal Finance which we can’t expect by a rented house.
- There is always a kind of self-respect and pride which comes by ownership of a house which can’t be felt by living in a rented house.
To rent or to buy, the question however tough it seems has a very simple answer. It all depends on your financial condition. It would be a wise thing to work out the numbers using a Home Loan EMI Calculator and a Home Loan Eligibility Calculator to find out whether you are eligible for a home loan or not. If eligible then what is your maximum borrowing capacity and should you get the loan, how would the Home Loan EMIs affect your budget. If all the numbers work out in the favor of a home loan then it is highly advisable to go for one. Just in case if you feel overburdened with it anytime you can always rent it out to lower your burden. An own home has always been the best investment and there has not been a better time to buy one through a home loan. With Home Loan interests at an all-time low and the real estate industry on a boom there has never been a better time. Take your time, work out the numbers, find out the options, compare and select a home loan that works out best in your case and be the proud owner of your dream home!