Owning a home is a dream for almost every Indian and buying the house is also not right for everyone. Look, choosing between these two is absolutely depending on your lifestyle, financial status and your future goals like children’s education, your retirement, daughter’s wedding, etc. Buying a house gives you the pride of homeownership, a feeling of safety and a secure place for your family. However, renting has its own benefits too. Here, is the list of 10 reasons why you should rent a house vs buying a house and the 5th one will amaze you.

1. No headache of down payment

As I mentioned above, buying a house depends on your financial status. So if you buy a home on your own savings and take a small loan then it’s okay but if you buy it on a mortgage then you must have to pay 20% down payment on the principal amount plus 8% on loan amount to the bank. 
However, if you rent a home then there is no headache of down payment you just have to pay a security deposit which is one month’s advance payment of the rental amount.
Suppose you buy a home of Rs. 75 lacs in Delhi NCR then you’ll have to pay Rs 15 lacs as a down payment and if you rent it then you only need to pay Rs. 24,000 as your rent. 

2. Maintenance and Repairs Bills on others.

Being an owner of the home you need to take care of your home which includes maintenance and repairs of the home. Say for example, you put your home on rent and some issue occurred then you are liable to fix the issue not the tenants. 
While being on rent you don’t have to fix anything you just need to inform your landlord and the rest will be taken care of by him unless that issue isn’t made by you.

3. Makes you flexible about where to live.

Staying on rent gives you an advantage to live whenever you want to change which is not present in case of owning a home, you’re restricted to stick to the area.
If you’re on rent and your company shifted you to another location or you changed your company then it is possible for you to move one location to another while it is not possible in homeownership. 
Here, you can’t afford to buy a luxurious flat or house  but you can afford to rent it and give you more flexibility and a high standard of living.

4. No property Taxes.

In homeownership you have to pay property taxes on your property while in renting you only have to pay your rent. Real estate taxes could be a huge burden on property owners and vary from state to state. In my next article I’ll write what property taxes are and how they are calculated.

5. Decreasing Property Value.

Real estate is an illiquid market, prices always go up and down. In most of the cases the property price goes up but according to the health and circumstances of the real estate market it goes down too in many cases. Here, is an advantage of staying on rent that you don’t need to worry about property price going up or down but in homeownership you must worry about the future prices too.

6. Fixed Rent Amount.

You know you’re paying a fixed amount of rent if your landlord increases the rent amount then he/she must have sent you required notices on a prior bases about rent being increased from next financial year. And if the new rent amount doesn’t allow your pockets then you can easily change the house.
On the other hand, in homeownership the property tax and mortgage tax also increases but here you can’t change your home.

7. No pressure to upgrade.

For a homeowner you may consider this an advantage as well as disadvantage because it is too costly to upgrade the design of your kitchen or renovate your home. If it seems like your home requires maintenance or needs to re-paint it then you will have to suffer it and it doesn’t add value to your home at the time of resale. On the other hand, renters don’t bother about upgrading the home.

8. Less Risky.

Purchasing a house involves huge and life-long investment which is directly proportional to more risk and gives to stress. Your savings and plans for the future must suffer for owning a dream home than renting. On staying on rent, you may live your life to the fullest and save the money for buying your own home (when you’re able to afford it and there is no loss) and indeed less stress. Also you can better plan for your retirement.

Is it really worth buying a home?

It’s all about a brief reason why you should choose renting over buying a home. Now, let’s calculate this with pen and paper, how renting is beneficial vs buying.
I’m quoting an example of my friend, who was initially staying on rent in Noida at a rental cost of Rs. 25,000/ month. Now he is planning to get married. So, he is looking for an answer to staying on rent or buying a flat? Let’s Calculate.

Suppose, buying a flat in Noida which is approx. Rs. 80 Lacs with mortgage, time period of 20 Years.

He pays 20 lacs as down payment against the loan amount of 60 lacs at a home loan interest rate of 6.9% which calculates to monthly EMI as Rs. 46,158 which is double of his monthly rent. And he paid the total amount to the bank after 20 years is 1,10,78,032 which is also double of his loan amount. The interest amount paid to the bank after 20 years is 50,78,032 which is 84.6% of the total loan amount.

Conclusion

• Buying or owning a home gives you a pride of ownership but it also depends on your financial status and lifestyle.
• Buy a home only when you are able to spend 50% of the total amount from your own pocket, otherwise you’ll burn in anxiety and stress.
• It’s better to go with renting first, save money, plan for your future and then buy a home. It is okay to buy an affordable home first rather than your dream home otherwise you’ll suffer.
• Always do the math before buying a home. It is a more important factor before deciding to buy a home.
• I believe now you can make a better decision on renting vs buying a home.