Have you been confused between buying and renting a residential property?

Well, you are not the only one! 

Buying a home is one of the biggest decisions that one takes in their lifetime. The financial consideration and long term implications involved lead to excessive brainstorming before arriving at a decision. Both options seem to have their respective benefits and one truly needs weight in the constraints of each before arriving at a decision.

The only commonality that exists for both the options is that either option will provide you with a roof above your head. You will get a place to live comfortably with your family but what needs to be looked into is which option provides greater benefits. 

Why do people want to own homes?

Before we discuss whether buying or renting is better, let us understand why one wants to buy a home. None of you will disagree that if given a choice between buying and renting a home, you will choose to buy. The only thing that may stop you is financial constraints. The cash outflow for the monthly EMIs is definitely higher than the rent expenditure that you would pay for the same property. However, should this deter you from making a home purchase? Let’s try to find out.

Long term Security

The foremost thing that an individual looks into before taking a financial decision is what will provide them with long term security. When you are living in a rented home there is uncertainty about the rent agreement. This may result in you being forced to leave the rented property. Once you own a home you are the perpetual owner of the property, unless you sell it over to someone else. This provides a big relief and security to the owners.

You are the boss

Those of you who have spent time in a rented apartment would have realized the problems associated with it. There are limitations to the modifications that you can do inside the premises. Let alone working on major overhauls there is no freedom to even put a nail on the wall. The landlord does not like it and you simply can’t do anything about it. Some landlords may also place restrictions on coming in late which can be detrimental to your lifestyle. When you buy a home you are the sole owner and decision maker. This gives you the freedom to do what you want. 

Emotional Well-being

Owning a residential property is the dream of almost every individual. With a rented apartment there is always the fear of the landlord asking you to move out. Once you purchase a home it brings great emotional stability. Your family has its own space and no longer has to feel stressed about anything. Over the years your family also forms a strong attachment to the property. This is the reason why many homeowners do not want to sell their house even after moving to a new property. 

Social Accomplishment

When you purchase a new home it brings a sense of accomplishment in society. It shows that your hard work has led you to become successful and independent. Owning a home is not an easy task and buying a property will display your achievements to the people around you. People will congratulate you and admire your hard work. The feeling of moving from a rented home to your own home is absolutely surreal in itself. 

Lucrative Investment Opportunity

If you are going to stay in a particular city for a long period it makes sense to buy a home. This will give you the feeling of belonging permanently to the city. In addition to that, it is also a great investment opportunity. Rent is just an expenditure that does not generate wealth. On the other hand, purchasing a house will help you to build up a strong net worth in the future. Once the EMIs are cleared you will have a large asset value in your name. You will also tend to benefit from the appreciation in the value of property prices in your area.

Easy to Finance

Home purchases are generally backed by bank loans. You just need to contact a bank and submit your home loan request. After approval, you can select the tenure of the loan. Most buyers prefer to take home loans for a period of 20 to 30 years. This evenly spreads the purchase price of the residential property. Home loans carry low interest rates that make it affordable in the long run. In 2020 the banks are offering the lowest interest rates on home loans. This will help to take care of your financial expenses.  Easy financing options will allow you to purchase a home even when you are young.

Increase in proportional ownership

While taking a home loan is a safe and easy method to finance your new home it has another accompanied benefit. With the payment of each EMI your proportional ownership in the property increases. This is not the case with a rented property. Even though you may have been paying rent for years, the fact is you will always remain a tenant and no unit of the property will get transferred to your name.

Potential Future Earnings

We always look forward to establishing permanent sources of income. If you buy a new home now and if you and your family will have to relocate to a new city in the future, you may then use your property to earn regular cash flow. This can be done by letting out the first home on a rent to a tenant. In this way, you can earn rental income from the property without having to dilute your ownership. You can then use this money to meet your monthly expenses or make further investments in other assets.

So, we see that there are several advantages to buying a home. This includes social as well as monetary benefits to both you and your family. Renting seems to be a good option but it will not help you to create any asset value in the long run. While taking any decision it is important to see both the short-term and long term benefits of your decision. When you consider this you will realize that buying a home is certainly better than renting.

If you are planning to buy a home, you can contact us to get advice from an expert.