Reasons Buying is Better Than Renting

by Diksha Sharma Blogger and writer

One of the major decisions of life is in deciding whether to rent or buy a property in India. Many dreams to own house whereas the others feel it is more economical and practical to rent a house. The difference between the two opinions is dependent on one’s vision for life and comfort.

Here’s a list of reasons why buying is better than renting:

Cheaper and Profitable in the long run:

The price of land or home is dependent on the location, in certain areas buying can be a more affordable option for renting. Owning a home may be expensive but comes with added benefits and advantages such as being eligible to tax deductions which can further help the homeowner reduce their tax bills.

The table below will help you understand and compare the difference between renting and buying and its impact in the long run with respect to costs.

Case 1 – Rental Home
Expenses	Calculation
Rent per month	20,000 INR
Rent appreciation PA	5%
Total Rent Amount paid after 20 years	80 Lacs
Asset Value after 20 years	0
Case 2 – Own Home
Expenses	Calculation
Loan amount	40 lakhs
Tenure of the loan	20 years
Interest rate	9%
EMI during the tenure	36000 INR
Total amount paid after 20 years	86 Lacs
Asset Value after 20 Years at 10% appreciation Per Annum	2.69 Crores

As per the above example, it can hence be seen that, when you take a house on rent, you end up paying almost the same cost as owning a house. However, when you buy a home, you are building an asset that increases your wealth.

Intangible Benefits:
Owning a home brings intangible benefits to the owner such as a sense of pride and ownership, a sense of stability and belongingness to a community not only for the owner but also for their children.

Investment:

Buying a home is a form of an investment as its value may appreciate over time, building the overall equity of the homeowner. Also, when buying a home, you buy freedom to do what you like with no obligations from the landlord. With an independent apartment, the owner can also generate additional income by renting out rooms, or floors or the entire house to others.

No more obligations:

Owning an independent home will free the individual from the hassles and restrictions of the landlord. A house owner does not have to worry anymore about paying for increased rents. Your home becomes your canvas to express yourself by painting the walls, hanging wall paintings and also adding new appliances and fixtures to your house as per your preference.

When deciding whether to buy or rent a home, keep in mind the above list and also the financial aspects and your dreams of living a particular lifestyle.