The argument for buying vs renting a house – Why pay rent when you can pay EMI and own an asset

This is the top most argument people who want to convince you to buy a home give. It could be your parents, your friends or your bank relationship manager. While at the face of it, it does make sense as house value increases while you don’t get anything from the rent you are paying. But as you dig deeper there is a major flaw in this argument. The primary reasons are the insane cost of real estate in India and our approach to buying a house. Let’s understand this with an example of Mohit. Mohit lives on rent in a 2BHK in a prime location in Gurgaon and pays Rs. 50,000 as rent. Now if he has to buy a house where his EMI would come to the same amount as his rent, he surely won’t find a house in the location he is living in. So, he has to compromise and find a house somewhere on the outskirts of the city and therefore has to compromise on the lifestyle if he wants to fulfill this dream.