A Robust Guide to Easily Decide Whether to Buy or Rent a House

The Decision of Procuring a Residential Property is Subject to Multiple Factors.

 

Having a House is a basic human necessity. Every person needs a home where they can spend their lives in comfort and as per their desires. The needs and parameters may vary; however, the primary goal is to have a suitable House.

Every individual eyeing a residential property has primarily two options: Renting it out or buying it. Lately, there has been a debate about the implications of both options. However, the choice is governed by multiple parameters, and the personal discretion of the buyer is the decisive factor. There are different opinions regarding which option is more lucrative and beneficial in the long run.


Milestone Financial Decision


Buying a House
is one of the most significant financial decisions of a person’s life. Not merely a Financial decision, it is also related to personal preferences and social interactions. Home location is imperative in deciding the person's overall wellbeing. Frequently, Buying a house is considered an essential juncture for an individual. However, buying a property comes with its consequences and risks.

An alternative to spending a considerable amount of money in property or real estate is to rent it out. You can enjoy the stay and leverage the space by providing a much lesser amount as rent. Thus renting is a lucrative option for people who seek flexibility and want mobility. The drawback of renting a property is that over a period of time, rent also accumulates to a substantial amount.

Thus there are numerous factors that need to consider before deciding which option to select.

Perks of Rent Vs. Buy

 

Primary Questions to Check Before Procuring a Property

First of all, it is essential to analyze your requirement and financial capability before deciding whether you should buy or rent a property.

  • How much can you spend on a property?
  • How long would you stay and for what period you are planning to take?
  • What are your long term goals?
  • Do you have enough time and resources to maintain the property?
  • Do you want to stay flexible with options or looking for stability?

 

The Pros and Cons of Buying A House

Advantage and Disadvantage of Buying a House


Advantages of Buying a House


A return for investment:
You can build equity with the property and as the value of the property goes up you can gain profit from your Investment.

Sole ownership of the property: When you buy a property, especially for residential purposes, you need not worry about answering the landlord. You can modify and renovate the house as per your wish. You can incorporate your creativity in choosing the colors of the walls, in selecting the interiors, etc. Unlike a rented property where you cannot do much without seeking approval from the landlord.

Stability and No-hassle of shifting: Most of the rented property comes with a limited duration rent agreement, Which means after 11 months or so, you need to renew the deal or find a new place to move. It is evident that when a person is living in a home, they accumulate a lot of stuff like furniture, personal items, and kitchen appliances, etc. Moving after short intervals is not a very convenient and cost-effective task. When you have your property, you need to worry about how much stuff to buy. There is no hassle or finding and shifting to a new place.


Disadvantages of Buying A House


A substantial amount of money needed as upfront cost:
You need a substantial amount of money as a downpayment to procure property. Inflation, higher prices of construction, and expensive land rates make it unaffordable for a generic buyer.

Risks associated with the property: There are so many issues like government regulations, compliance issues, environmental hassles that can affect your property. After making massive Investment in the capital, imagine receiving a government notice that the area needs to be evacuated due to environmental concerns. Buying a property makes you tied to a lot of repercussions which are not there in renting.

Maintenance Costs are High: Every property requires maintenance and upgrade after a few months. Painting, repairs of sanitary, and floor maintenance are just some of them. These costs can be substantial while renting out you can cut on most of these costs. Generally, the home-owner bears these costs.

Loss of money in case the value of property declines: The chances are rare, however, cannot be denied altogether. Just in case there is a decline in the value of the property due to any unforeseen reasons, you may lose a substantial amount of your lifelong savings in the property.


Pros and Cons of Renting a House

Advantage and Disadvantage of Renting a House


Advantages of Renting a House


Less Upfront Cost/ Not Much Paperwork:
Renting a property is comparatively more straightforward. The cost associated with renting a home or a commercial space is substantially lesser, and thus you can start living in a house of your choice quickly. You need not work upon months to collaborate with banks to get loans to finance the home or property.

More Mobility and Flexibility: You can hop between places more frequently and quickly when you rent a property. There are more options available at less cost. You may choose to live at the location of your choice. Just in case you do not feel comfortable in one place, you can shift to a different location.

No Need to Worry about the Maintenance and Repair the Property: As we already mentioned earlier, when buying a property or home, you are solely responsible for the maintenance of the damages and upgrade. Apart from the money involved, you also need to undergo the hassle of finding technicians and spending time for maintenance. When you rent a property, all these responsibilities are taken by the owner.

No Worry About Depreciation of Property Cost: There are fluctuations in the market, and the costs of property can go down at times.  When you let out a home, the factors like property value depreciation, etc. does not impact you.


Disadvantages of Renting a Property


Shifting multiple times:
There is discomfort in shifting places and moving with all the stuff, again and again. It is a central problem with letting out a property rather than buying it.  The landlord has the sole ownership of the home and may ask to release the space at any time. Even though there can be contracts to assure there is prior notice, still shifting base multiple times is a hassle.

Finding the right location at the correct rate can be an issue: There is no assurance that you would be able to find the right property to rent out for your business or residence with the allocated budget. There might be so many constraints, and generally, it is seen that people find it challenging to find a suitable place. Though you can overcome this problem by consulting the correct Property Consultants in Noida, Delhi, Gurgaon, Mumbai, Bangalore, Kolkata or any other cities to find the suitable rented property.

Hike in rents: As per a generic system in India, the rent of the rented properties is increased every 11 months when the rent agreement is renewed. The landlord has control over the rent amount. Moreover, they can always sell their property without consulting the person staying in their property.

Money spent on rent is not an investment: The money that you pay as a rent payment does not give you any return. It is a pure expenditure, which is why most of the people prefer giving the monthly amount as EMI for their property. You do not build any equity out of the rented expenditure.

Quick Checklist to Choose What's Better For You

Here is a small checklist that can help you come up to a decision faster.

  • Want to stay at a place for a long duration?
    • Buying is the Better Option.
  • Want to Explore Newer Locations as I get Bored with the Same place quickly?
    • Renting is the Better Option.
  • Want to Decorate and Customize Home as Per My taste?
    • Buying is the Better Option.
  • Want to Create an Asset or Equity?
    • Buying is the Better Option.
  • Want to be away from the hassle of maintenance and upgrade?
    • Renting is the Better Option.
  • Want to save money for Investment on other opportunities like Stocks, New Business?
    • Renting is the Better Option.
  • Not Certain about future professional commitments?
    • Renting is the Better Option.

 

Consider the Financials with the Buy Or Rent Calculator

An excellent tool to decide whether the buy or rent is a Renting Vs. Buying Calculator, which is available easily online. The costs of both buying and renting vary considerably; however, over time, renting can be costlier than procuring a house.

The Buy Vs. Rent Calculator helps you gauge the difference in the costs for both and help you arrive at a decision more reasonably. The calculator takes into consideration factors like the typical expenditure costs of owning and renting. The tally is done based on the varying prices and returns the Opportunity Cost.

This cost will help you assimilate return you can earn by putting your money into other investments rather than one-time payment for buying the house. It considers factors like Downpayment cost, mortgage or rent amount, insurance cost, maintenance cost, inflation, and property appreciation.

The Buy vs. Rent Calculator will make the financial portion of this decision easy by weighing all the costs into a complete analysis. When coupled with your personal needs as discussed above, it will help you make a smart decision. After you decide whether to rent or buy, you can consult good Property Consultants in Noida, Delhi, Mumbai, Kolkata or anywhere you prefer for buying your house or renting one.

 

Choices Based On Individual Situation and Preferences

The decision is challenging; however, you should ascertain the perils of both. The deal is not to lose money and waste your effort in the process. One can build equity with an owned property but, it comes with financial risks. The real estate market is dynamic. The local socio-political factors are significant determiners in the valuation of the property. Another aspect is that one gets obligated when you buy a property.

Financial Reasons To Buy

Image Source: Nova House and Home

Another aspect that you must assess is your career and professional commitments. If you require to shift base often for your job, renting is undoubtedly a better option.

Renting has its demerits like - instability, and bounded to stay in the property of someone else's choice. You cannot customize the rented house much as per your need. The discretion of the owner is always needed even while making small changes in the house.

The Conclusive Words


Rent Vs. Buy
is not an easy comparison, and there are always different options for different people. Based on real-life situations and persons momentary circumstances, a lot can change. A person may choose to buy a house seeking sustainability and stability; however, another person may prefer to rent an apartment to deal with financial limitations. The decision of renting or buying depends solely on the requirements and capacity of the person considering the parameters explained.

What matters most is "Taking the right decision and finding the right kind of property suiting one’s requirement." And here comes the role of skilled Property Consultants who can help you in finding the best deal. If you are looking forward to buying a suitable property, HedgeHomes – an IIT-BITS Real estate consultancy firm is the most sought after Property Consultant in Noida can assist you the right way.

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