Deciding whether to buy or rent a home is one of the most important financial decisions you’ll make. This choice has a significant impact on your lifestyle and long-term financial security. In today’s market, with fluctuating property prices and rental trends let’s understand the pros and cons of both options, it can help you make a proper decision. Let’s take a closer look at home buying vs. renting and determine what might be best for you.
Renting offers flexibility, but it comes with certain limitations. One of the main drawbacks of renting is the lack of ownership. Renters have little control over the property and must follow the landlord’s or housing society’s rules. However, rentals tend to increase by 5-8% annually as inflation rises. Over time, this could lead to higher rent payments, which may double every decade.
Homeownership brings stability, security and emotional upliftment, offering the freedom to customize and establish community roots. Unlike stocks or gold, owning real estate provides daily satisfaction. On the other hand, renting comes with significant disadvantages, including a lifetime liability that continues even after retirement, when income may decrease. Furthermore, frequent shifting due to the property owner’s decisions can be stressful, requiring constant adjustments to new areas, communities and incurring shifting costs.
On the other hand, buying a home comes with a unique set of advantages that are ideal for long-term stability. When you buy a house, you are building a long-term asset that provides fixed liability and tenure. Instead of paying rent, you invest in property, gradually building equity and value over time. In India, properties generally appreciate by 8-10% annually, offering a steady return on investment. While the initial EMI payments may seem high, they remain constant throughout the loan period, offering financial predictability.
You can make homeownership more accessible with Government Schemes like Pradhan Mantri Awas Yojana (PMAY) offer additional benefits for first-time homebuyers. This scheme provides interest subsidies of up to Rs. 2.67 lakh on home loans for low and middle-income groups, making homeownership more accessible.
Tax benefits further improve the attractiveness of buying a home. You can claim deductions of up to Rs 2 lakh on the home loan interest under Section 24 and up to Rs 1.5 lakh on the principal repayment under Section 80C. These tax benefits can help reduce the overall financial burden.
Furthermore, low borrowing costs due to historically low interest rates on home loans in India make property purchases even more affordable. With interest rates typically between 8-10%, the effective borrowing cost, when considering inflation and income growth, can be as low as 2-3%, or even 0% if tax benefits are included.
Buying your first home is a smart decision if you’re in your 30s and can allocate 30-40% of your monthly salary towards an EMI. The long-term benefits of building equity, enjoying tax deductions and securing your future far outweigh the flexibility of renting. With its growing real estate options, Anandtara Real Estate in Pune offers a range of luxurious properties, including 2, 3 and 4 BHK Flats and commercial spaces with world-class amenities. It provides you with an investment in both comfort and financial growth.
