Today at All About Loan, we will discuss about the decision to BUY or RENT a property. This is one of the widely discussed question that comes when one always keep thinking about.
Since buying home usually is a long term decision in India, before buying a Property one should do his Math properly. A wrong decision could have long term repercussions. We at All About Loan have had clients whom we helped buy a under-construction property in 2016, they got possession for same in 2019 and during this Covid Pandemic time they decided to move to their Home town permanently. Now since the property is vacant, EMI is still being paid they have decided to Sell off the flat at a discounted price! Such decisions can really lead to long term losses!
In the above scenario, renting a property would have been a better decision for them!
Analysing the same via Numbers & Math
|Property Cost- 2 BHK
|Booking- Renting Year
|Approx EMI paid till date (Considering ROI 8%, Tenure 20 years and Loan amount 45Lakhs)
|EMI 37,640*5 years 22.58Lakhs
|Rent Each month 20k 20k*5 years 12 lakhs
From the above numbers it is evident that Renting the property would have been a clever decision for one rather than Buying a property. If we take into consideration factors like PRE EMI during booking time to Possession, Rent being paid on alternative Property where one was staying, fluctuations in ROI the costs will be much more to One who bought the property vs One who rented it.
In Indian context, Renting is considered mostly a compromise by People. On other hand someone who is financially stable puts much more weightage on the decision to buy a house vs Rent it.
Advantages of Buying a House
Advantages of Renting
The decision to Buy or Rent is a tough one. One should do a Self-analysis of long term goals, Finances, Math and then take a decision. For better analysis you can connect with us and we will help you take a decision.
We at All About Loan, are a team of experts and ex-bankers who have been serving numerous clients. For your loan queries, you can connect with us on below details.