Renting Vs. Owning a home in India: a perspective!
This is a question that many people ask themselves as they work and raise a family. It’s a cross-road that we stare at some time or the other in our lives. Plus, it takes some mulling and soul-searching before we chose one of the two options: Buy versus Rent!
Some of us feel that renting a house is more beneficial. You have all the flexibility that you can ask for by taking a house for rent. You don’t have to get tied down to one city or one locality, and renting a home alone allows you greater breathing space! It gives you a ‘pay and use’ option with no strings attached!
Some others may argue that renting burns a hole in your pocket. Instead of renting, buying a home appears to be a better deal to them. They may assert that paying an EMI seems more sensible to them rather than pay for a monthly rent. Even if you move places, you can always put you property on rent, and get some rental income out of it!
Both the arguments are valid. In this article, we shall put forth both perspectives- renting vs. buying a home. Both are good depending on your priorities. The article merely aims at facilitating clarity on what goes into both options.
Eventually, you decide what works best for you!
Renting vs. owning a home:
1. Why Rent?
- You’re not limited to living in a certain area, and can change your home at your convenience
- Renting gives you the flexibility to move and shuffle between a bigger or smaller place
- For a working professional on the run, renting seems like a better option
- You also get semi-furnished options while renting a home, and all you need to do is pack your bags and get inside a home
- Going through the hassle of purchasing and then furnishing the house
- Renting works out stress-free and relatively cheaper commitment
- It gives you more breathing space in the short as well as long term
2. Why Purchase?
- A place you can call home. After all, it belongs to you
- Buying a home gives an unparalleled sense of security
- The sense of accomplishment along with the status symbol of being a homeowner is a marvelous feeling
- Real estate is an investment that yields decent returns in the medium to long term
- You leave a legacy by passing on your property to your loved ones (your legal heirs)
- Not burdened by the increasing rates of rentals in the surrounding areas when you live in your own home
- Owning a house could also generate additional income, in the form of rentals or from paying guests
3. Things to consider while purchasing your own house in India
Reason for purchase:
- Ask yourself if you are purchasing the house as an investment or as a home you wish to live in
- Does it satisfy a deep sense of satisfaction, pride, and love for your family as you buy your own home?
- Do you feel protected in your own home? Feel at ease where the roof above your head is your own?
- Well, the feeling is intense and indescribable when it comes to ‘how you feel with your own home’! To quote Maya Angelou- “The ache for home lives in all of us. The safe place where we can go as we are and not be questioned.”
- Plus, on the other hand, landlords get a decent income by renting out their home spaces
- So, you could be buying a home to live in, and have more than one home for renting purposes
- What’s your definition of a great location? Is a great location one that’s closer to the main road, and extremely well-connected, or posh?
- The answer more often than not lies within a home buyer. Frankly, there is no such thing as a great location that may apply to all within the family!
- Location eventually boils down to home buyers’ and family priorities.
- No one can define OR give a list of what a great location is!!
- Location is all that matters to you!
- For instance, for a few buyers Gachibowli in Hyderabad may be a great location. For some others, the serene environments of Sainikpuri in Hyderabad may actually be a better location
- You need to choose a location which will cater to your needs, and will turn out to be a great place to live-in (in the long run)
- It would be ideal if your house is takes care the needs of your family members in the short, medium, and long term
- Priorities matter- For some, being closer to place of work is more important. For others, living in a peaceful locality could be critical for a better quality of life
Rates differ in ‘same’ as well as ‘different’ localities:
- Dip your foot in the water and try to understand how the rates of properties vary in a ‘locality /area of your choice’ and ‘your requirements’
- Take an example from Hyderabad, India: A home (apartment or builder-floor) in an expensive location like West Hyderabad (Hi-tech city, Nallagandla, Madhapur etc.) is more expensive because land prices are more here. Similarly, localities in North-East Hyderabad(Sainikpuri, Yapral, A.S.Rao Nagar) are cheaper since the land prices are lesser in this part of the city, which is why apartments are relatively more affordable
- Rates are also dependent on the quality of construction and specifications within a certain locality
- Being sure of the ‘quality and specifications’ you are looking at matters!
- Cheaper sometimes can mean sub-standard specifications and quality of construction. Let’s take an example from Hyderabad again:
- If you have a budget of Rs 80 Lacs, you could get a spacious 1500 sft home in Sainikpuri with high specifications with a good builder
- If a builder offers you the same area with lower specifications for Rs 75 lacs, you may be tempted to consider it as a better deal
- This is where you need to check for the reputation of both the builders and take a decision
- If you’re lucky or have broken the code, you can find the right property in a good locality for the right price!
- A cheaper property in the same locality, more often than not, may not be good in quality!
Which is the better option: Renting or owning a home?
This is the main question people keep asking themselves. You may find contrasting views. What’s important is to understand that buying and renting are both financial decisions. What differentiates buying a home is the emotional decision!
So, either way, the final decision should be taken based on your priorities, self-introspection, and family considerations.
You may have many reasons to choose rent or purchasing over the other. Owning a home is always seen as an “achievement” by society.
“If you rent, the rent goes up every year. But if you buy a 30-year mortgage, the cost is fixed.”-John Paulson
Some people are not influenced with the logic of ‘sacrificing today’s comfort’ to buy one’s own home. Renting makes perfect sense to them!
Similarly, within the same population, you find ardent home buyers who simply love the sense of pride that you get by buying your own home!
Hence the real answer lies to the people themselves! Either ways you won’t be wrong, since it is your life, your money, your family, and your priorities!
“Desires dictate our priorities, priorities shape our choices, and choices determine our actions.”– Dallin H. Oaks
To know more about “Your 3 BHK apartment in Hyderabad: Dilemma over ‘Standalone building flat’ vs. a ‘Gated community flat!” Click here!