In India, we all dream of living the city life. We all want to have all the facilities around us and live with convenience. However, a convenient and comfortable life comes at a cost. Whether it involves paying rent for house in Mumbai or buying a flat in any other part of the country, you need to pay and fit the expenses within your budget.
Some people believe that renting a house is a liability because the money paid as rent is not generating an asset. Others believe that paying a home loan for the entire life is a hassle, and renting is more convenient. Hence, it is significant to understand the pros and cons of buying versus renting a home. Especially in cities where living is expensive, it is necessary to make an informed decision. The pros and cons of renting and buying are being discussed ahead and would help you decide whether to look for 1 RK flats for rent in Gurgaon or buy one.
Advantages of Renting
- Lower short-term investment – the investment of renting a house is much low than paying the home loan EMIs every month. You can find flats for rent in Delhi NCR starting as low as 15,000 per month. However, if you were to pay the EMI of a home loan, you would need to pay about 40-45,000 rupees every month. There is also no interest in renting a home. But, you have to pay high interest on the home loan.
- Down-Payment – If you are young, likely, you do not have huge savings to pay as a down payment to buy a flat. If you rent a house, you only need to pay a lump sum of rent for two to three months as a security deposit. Hence, renting does not require major savings to be spent on a down payment.
- No Additional costs – Living a salaried life means that you would have limited funds to spend each month. If you rent a house, you do not have to worry about multiple additional costs, such as property tax, association fee, maintenance fee, parking fee, etc., to the society in which you have bought a house.
- Flexibility – We all want to live nomadic but comfortable lives. We want to work and live in any part of the world that we can. We wish to get job opportunities abroad or live a few months in the hills. This flexibility cannot be gained by buying a house. You would always have to be worried about maintaining the house in your absence or renting it to someone else. All these issues do not occur while renting. You can rent a home wherever you want and move whenever you wish to.
- No debt – renting helps you to find suitable accommodation that satisfies your needs. You can live in a neighbourhood with good schools, hospitals, etc. But, you do not need to worry about a home loan or any kind of debt.
Advantages of Buying
- Build an asset – one of the major advantages of buying a house is that you build an asset for yourself. You can live in this house for your whole life and are secure during retirement. Also, renting is not always cheap. The rent for a house in Mumbai can be as low as 25,000 rupees a month. Not everyone can afford such an amount. In such a situation, buying a flat is more beneficial than renting because an asset can be built.
- Reduce your tax burden – it is true that buying a house can put you in debt. You would need to pay an EMI towards the home loan every month. However, the Indian taxation laws provide tax benefits for taking home loans. Under Section 80C of the Income Tax Act, you can claim a deduction of 1.5 lakhs. Under section 24, you can avail of a further deduction of 2 lakhs.
- Low interest – The loan market is highly competitive today. Hence, banks and other lending companies offer loans at less interest. Getting a home loan is no longer as it used to be. Also, the EMIs can replace the amount you would pay for rent. The benefit is higher because, in the end, you would have an asset to enjoy.
- Appreciation – real estate is a good investment because property rates appreciate. Your investment would most likely be profitable by a huge margin.
- No threat of tenancy – tenancy is difficult and complex. As a tenant, you would always be dependent on the landlord. While living in 1 RK flats for rent in Gurgaon, the landlord can ask you to move out when they want. As a result, you would need to find a new house and go through the hassle of shifting. However, this issue does not arise when you buy and live in your own house.
The decision between renting and buying a home is difficult. It can be a challenge to ensure that you are making the right decision. Both processes are beneficial but bring many challenges too. Hence, it is necessary to realize your long-term plans and financial situation to decide. If you want a settled life in a city of your choice, you should buy a house. However, if your career is unstable or you wish to make a living out of travel, you should rent to gain more flexibility.