Renting vs Buying A House- My Thoughts

This is one of the topics where people have different views and opinions. I believe that this is mostly based on the preferences of the people and what are their needs and priorities. My thought is that owning a house is something that gives us great Peace of Mind but maybe from the investment point of view this cannot be a wise decision. Sometimes it can be a wise decision provided we follow thorough research before investing on the House. In India, there was a time when property rates were high during the year of 2012. Now prices are down and even after the covid pandemic there is hardly any change in the value of property in the country.

Experience of Rental.

Why you stareda in rental apartment for about 10 years and during this period I also shifted to many houses. I hardly stayed in any house for more than two years and because of these shifting was a painful process for me. Although it does not matter to me in terms of the manual effort because I always took help from Packers and movers but there is a certain cost that I need to bear. I was able to claim the relocation charges from my organization but still, I would say that this is not a good experience. I would not say that rental was not good because there were some benefits which now I do not have but I would like to mention here.

Parental accommodation we need not go through the main maintenance charges. Just pay the rent and monthly recurring charges and that is all. Most of the wear and tear expenses are borne by the owner provided I inform him.
Freedom from home loan and no Home loan EMI in Life but certainly monthly rental is an irritating expense.
We can change the location of the house and even we can live near the office so time on travel can be saved.
No liberty to make indoor changes as the owner does not approve and we need to manage in the same design or style that is already built.

Experince After Buying A House

Its been a few years since I own a house and I have had to pay monthly EMI since then. My emi amount is higher than what I used to pay for rent. This increases expenses for me and the only satisfaction I have is that I'm building an asset however this was not possible with the payment of rent. Banks designed the mi amount in such a way that the major portion of the mi it sent to the interest portion and not more than 20% is credited to the principal amount.

once we buy the house and go for the home loan then we get the read from the rental charge but EMI is added as a monthly expense and this amount is surely higher than the rent. In India, the rental amount is not so high as compared to property value so it's obvious that the owner has to pay more in form of mi as compared with the rent amount.
I get tax savings after eyes availed home loan to buy the property however even during the rental I was able to claim the house rent allowance tax. Now with a home loan, I am able to claim more tax but the difference is not too high.
The experience is good in terms of Peace of Mind because now I need not to spend anything for shifting and even I can make things as per my convenience and preferences without seeking approval from anyone.
now I also need to manage the house maintenance and other expense to maintain the house. I often buy things to make the interior better but this has become another expense for me.
The property market went down after I purchased the house so there is no much appreciation in value and this way it is a loss-making decision. I spent all my savings along with some liability from the bank side. Now I lose the interest which I could have earned with my money and even I am paying interest to the bank for the liability I have taken. The only saving I have now is the rental amount but I pay much more than this in form of EMI.

In my opinion, it is very important for us to think it through it before we decide to buy the house. I would say that if you do not have enough money in your savings then you should avoid buying a house because this way you will be ending up paying more am I which I think is not a good decision. I paid about 30% from my saving and remaining 70% is paid through the home loan so my mi is higher. I really feel bad when I look at the break up of monthly mi because a major chunk of the repayment is gone towards the interest. Let's suppose if I am on the rental then I just need to pay the monthly rental and some additional charges including the security and that is all. Although I will not have the feeling as we get with our own home but it's still this way I'll be able to save more money than what I am paying now.

If you take a wise decision then I would say you should not buy a house but if you think with emotion then in India a lot of people do this. This way they end up paying the heavy emi amount every month where is the value that they are getting in terms of returns is not up to the mark. Nothing I'm already paying the home loan then it is fine because now it is in my budget and I'm able to manage it but there was a time when the EMI payment was a bigger challenge for me. Usually, home loans are for the long term starting from 15 years to 30 years, and this way we must ensure that there is enough surplus to deal with any sudden expense or emergency.

Overall I would say that buying a house is a good idea only if you are holding a good amount of money and are least dependent on the liability. But if things are not the same then it's better to stay away from buying a house and better to stay in the rental accommodation because this will be good and you will be able to save more money.

*Thank you.

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