Which is Better – Buying a House or Living in a Rented Apartment?

Posted on: Nov 10, 2021 | | Written by:

Which is Better – Buying a House or Living in a Rented Apartment?

Published on November 10, 2021. EST READ TIME: 3 minutes

Being a homeowner is perhaps one of the biggest aspirations of any Indian. Apart from the pride that comes with being a homeowner, the notion of having your own house is linked to building an asset and a sense of security. While there are several benefits associated with owning a home, the norms have changed over the past few years.

Traditionally, people are inclined towards owning a house because of the age-old belief that being a homeowner is a sign of affluence and adds to your stature in society. But the cost effectiveness and the flexibility of living in a rented apartment have swayed many to continue living in a rented place. The city you plan to live in, your lifestyle, which home insurance policy to buy for your home, your personal preferences, etc. are the important points to be considered while making the decision.

In this blog, we discuss what makes more sense, buying a house or renting one. Here is a list of benefits that would help you make an informed decision.

Benefits of Owning a House

● Freedom and control-

Owning a house saves you from the hassles of dealing with the landlord. From maintenance, electricity, and water issues, you are not dependent on the landlord to make repairs. You control what changes you wish to make in terms of the small repairs to complete overhaul and do not have to be under the constant scrutiny of the landlord.

● Tax benefits-

One of the key advantages of buying a home is the tax deductions you are eligible for when you take a home loan. As per the Income Tax Act 1961, repayment of a home loan is eligible for tax deductions.

● An asset of your own-

Building an asset is one of the primary reasons which encourages most people to buy their own home. With each EMI that you pay to the bank, your equity on the home goes up. Over time the price of property goes up which adds up to your wealth as well.

● Sense of security-

Having a home of your own gives a sense of security and comfort to you and your family. A home is made up of memories you have shared with your family and friends and gives you a sense of belonging.

● Sign of success-

Buying a house is associated with accomplishment and success. A home is considered a status symbol and a yardstick for measuring wealth.

Benefits of Renting an Apartment

● Cost-efficient-

Repair and maintenance costs are often overlooked but can account for a lot and add to financial woes when you own a house. Utility expenses are usually covered when you rent an apartment and you end up saving thousands per month. But in the case of a homeowner, they have to take care of these expenses out of their pocket.

● Flexibility-

If you have just started your career you might not have clarity about which city you plan to stay in and for how long. Renting an apartment gives you the flexibility of moving to any place based on the changes in your professional or personal circumstances.

● Less expensive

While the amount paid as EMI premium is often comparable to the rent of an apartment. The expenses you have to pay upfront for owning a house are high as compared to the deposit paid when renting an apartment. The downpayment made for buying a house might sometimes empty your savings account, lead to financial stress and impact your monthly budget and lifestyle. On the other hand, when you rent an apartment you do not have to worry about emptying your savings and do not have to compromise your lifestyle.

● Better location-

Property prices at the prime locations in the city are usually out of the budget for most people. Prime locations in the city are much more feasible to rent as opposed to buying a house in the posh locations of the city.

Conclusion

Whether to continue living in a rented apartment or to buy a new house is a tough decision to make. It all boils down to certain factors that you need to keep in mind while making the decision. But if you can afford to make more than half of the home’s worth as the down payment and plan to settle in the same city for years to come, buying a home would be a good option for you. If your work requires you to be constantly on the move and taking a loan means compromising your lifestyle, renting is what works best for you. No matter what you decide, protect your home from potential damages by buying a house insurance policy.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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