Is buying better than renting a house | Pros and Cons

Thinking of buying a house and stuck in the dilemma of "rent or buy", or may be questioning yourself: Is buying better than renting a house? Answer to this question: I post this article to helps you in making decision quickly.

You may definitely see so many around you speaking like “if you want to survive in a social environment, buy your own house”.

And also from the other perspective you also hear that taking a home at rent is a better choice than going to your own house because it saves you a huge cost.

Instead of listening to all these, you should analyse yourself according to your requirements, which option is better for you.

So let us try to find out the answer to this question with the alternative approach.

Means, we will see both the alternative to buying a house or renting a house and try to analyse with renting vs buying a house pros and cons.

After reading this article you will be able to analyse yourself, which option is better for you according to your requirement.

 

Live in renting house

It is usually to be heard that in big cities like Delhi, Mumbai, Bangalore etc, people want to live in rented houses because there price of buying a house is too large and people sometimes cannot afford it.

It is a fact, if people can afford to buy their own house so why will they go for a rented house. In such a situation, thinking of living in a rented house itself is not a bad decision.

So for more clarity let us look for the advantages and disadvantages of renting a house.

Advantages of renting a house

Cost saving

It is a major benefit of living in a renting house instead of taking a own house at loan because monthly rent saves a lot then monthly EMI.

If you buy a house on loan then you have to make the down payment but in a rented house there are no such conditions. You need to pay rent for the monthly cost of living.

In this way you can save money and can invest in anything else which gives good returns.

Expenditures related to house

If you live in a rented house then you need not to take tension of expenses like repair and maintenance, insurance of house, property tax etc. You just need to pay expenses which are included in your monthly rent. So you will save the cost.

No fear of value erosion of property

If the value of property reduces, you do not have to take tension because you are not the owner of the property.

Disadvantages of renting a house

Landlord 

You have to follow the instructions of your landlord because he is the owner of the house. This may become sometimes irritable.

No return of rent expenditure

There is no return on rent expenditure you incurred. You just pay monthly rent to take monthly shelter. If you buy a house you will become the owner of the property.

Increase in rent

There is always a slight increase in rent every year. Your landlord may demand higher rent and then earlier and this may affect your monthly budget.

On the other hand if you buy your own house at loan then you have to pay a Fixed EMI.

Social factors

These are major factors which make you think is buying better than renting?

Thinking about what the relatives, friends are saying. We sometimes feel force to buy our own house, which is a big disadvantage which people feel living in a rented house.

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Buying a house

Now in the emerging world buying a house becomes the need of everyone. Everyone wants to have their own house. Those who can afford buying a house without taking a home loan than buying is not a big issue for them.

But who does not yet can afford housing but wants to buy it, usually taken home loan. In which they have to make a certain down payment for purchase of house and pay remaining amount by loan from the bank. They have to pay monthly EMI for the period of loan tenure.

But the question again comes on the rent vs buy decision. You must analyse yourself which is beneficial for you according to your requirement.

Advantages of buying a house

Psychological satisfaction

It is the biggest factor people prefer to buy their own house. It creates respect for themselves among their friends and relatives that they have their own house. This gives psychological satisfaction.

Ownership

Instead of living as a tenant under the landlord it is better to have your own house of which you are the owner.

In a renting house, you have to follow the instructions of the landlord.

If the landlord sells the house you have to vacate from the house and find another rented house. But if you buy your own there is no such problem.

Price appreciations

If you buy your own house you can get the benefit of price appreciation of property.

Your property price can increase which gives you benefit if you want to sell your house at a later point of time. Moreover it becomes your asset.

Tax benefits

If you buy a house by taking out a loan you will get various tax benefits. One is under section 80c of Income Tax Act 1961 (in India) you can take tax benefit of maximum rupees 150000 in respect of principal repayment of loan.

And under the head house property you can also take tax benefit of interest paid on a housing loan which will save your money.

Disadvantage of buying a house

Expenditure related to house

If you buy your own house you have to take responsibility for it. You have to bear expenditure like repair & maintenance, insurance of house, property tax etc.

But if you live in a rented house you need not to take tension. This sometimes becomes the reason that people want to live in a rented house in order to save such cost.

Taking loan

For buying a house you may need to take out a loan and you have to pay a fixed monthly EMI. If your income is not such that it covers your monthly EMI then this becomes a major problem.

For payment of EMI you may need to take another loan and in such a situation you may face a debt trap.

Down payment

If you are buying a house by taking a home loan you have to pay a down payment and for the remaining amount the bank grants you a loan.

So to make the down payment you need to arrange funds which itself is a big challenge.

Conclusion

Back to the questions: is buying better than renting? You can conclude this by taking into account renting vs buying a house pros and cons.

If you have money or you can afford to take out a loan then buy a house is better for you, because owning a house is a need of the time.

But at the same time if you feel that according to your requirement renting a house is better for you then goes for it.

But before making any decision you must analyse both the options and then go ahead which is better for you, ignoring what your friends or relatives are saying.

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