do you buy or do you rent?
there is no place like home and you’ve heard this throughout your life. it is a place where you put your feet up, be yourself without judgement and plan for the life you want to live. home is an abstract concept. people spend their lives looking for a home. it's a journey one has to undertake just to understand what home is. but a house? now, that’s a different subject. a house you can find. a piece of real estate where you live and can grow your standard of living if used correctly.
and owning real estate is one of the primary ways of growing wealth. according to a survey by ANAROCK, about 57% of the people prefer property over fixed deposits, equities and gold as an investment. since the lifting of the lockdowns, real estate has been a popular choice of investment. and last year, rent and home prices saw some much-needed correction.
we did a comprehensive piece on why this is the right time to buy real estate. the opportunity to buy is unique because of the liquidity in the market, the ability to work remotely and to find good deals in non-attractive cities outside major financial centers.
buying a house also removes the hassle of relocating every time the rent agreement expires, which again is a waste of time and money. real estate is also a safe store of wealth. their value increases over time, one gets tax benefits on the home loan and a sense of security and independence.
but there is a reason people prefer to rent rather than buy.
One reason people prefer to rent is the hidden costs that accompany owning property. for many, an EMI along with other maintenance cannot be as affordable as just renting out a place. also, not everyone in the early phase of their careers can accumulate enough for the down payment of a house.
renting also doesn’t tie you in one place and allows you to freely move in order to pursue better career opportunities. imagine this, you’ve just bought your dream home in Delhi. it comes with a sizable EMI and maintenance charges, but you get a very lucrative career opportunity in another city. if you move, then you have to continue paying the EMI in Delhi and rent in whichever city you move to.
one can also claim tax benefits as house rent allowance (HRA) while they live on rent.
ultimately, owning or renting comes down to a personal choice. can you afford it and is this where you want to lay your roots down? once you have those answers, the rest flows from there.