Renting OR Buying A Home: Is Renting A Waste?

Buying a house has been recognized as a way to settle down enduringly. However, this statement ignores many other associated parameters involving financial decisions. Is this a better option than renting a house? Or is it fine to reside in a rented house permanently? In this blog, we have considered both the options in detailed and realistic affairs.

Paying EMI vs. Paying Rent

You will often find people considering paying EMI is anytime a better option than paying rent. Fair enough! But is your decision realistic considering home expenses when it comes to buying vs. renting?

As you dig deeper, you’ll realize paying rent and paying EMI aren’t parallel. You will not find similar residences and surroundings with the same amount as rent. The reason being the increasing cost of real estate in India. Also, as a renter, an individual is not responsible for other miscellaneous costs attached to the house. It includes the age of the ceiling and roof, appliances and system, home insurances, home maintenance cost, landscaping, grass cutting, snow removal, association expenses, remodeling, and renovation cost.

Therefore, don’t dash and judge immediately that renting is a waste.

However, excluding that, buying a home has its benefits.

Did you consider all the tax advantages home loan carries? Buying a house is one of the best options when it comes to saving tax and owning an asset. When an individual buys a house, especially for the first time, he receives a reduction on the tax payments and quite a lot of other financial benefits on the principal amount. There are various sections like section 24, which says “deduction of rupees 2 lakh on the interest amount applied on the property whose construction gets completed within five years.” Other sections like section 80 and section 80C also have their other financial benefits.

Also Read: How To Buy A House With Bad Credit Score: 8 Tips

Even if you exclude those benefits, owning and buying a property in any form is one of the best investments and quite a smart way to congregate an asset.

Furthermore, this statement comes with two aspects, analyze why you are willing to earn a house? If the goal is to sell after some time and to earn money when required, then it can be a good choice or a bad as well. Bad, in the way that when you weigh all the associated expenses, including your efforts and time against the sales price, you might end up realizing the worth didn’t rise as expected. Thus, we highly recommend you to ponder over this factor and consider whether or not your primary residence as an investment is a creditable and worthy investment.

The decision shall depend on how long you will be staying in that house.

This is such an integral yet ignored factor. When you plan to buy a house, the foremost factor to be considered shall be the period you are willing to put up in that residence. This is what determines and decides if you are moving smartly with the decision of buying a house or not. If someone plans to buy a house and sell the property after a while only then the decision won’t be worthy enough. It can be risky in terms of financial loss as buying the house doesn’t just involve EMI and loan payments but also other miscellaneous and hidden expenses.

Thus, we recommend thinking about the time you are willing to stay in the house and then decide if buying will be beneficial. Other than that, if you think you can utilize the abode for a longer period and then you will consider the thoughts about selling the property. In that case, it will be worth and you won’t face any such sort of fiscal or monetary defeat.

Buying a home is about investing but make sure you don’t drop all your savings.

Reviewing your loan qualification is truly important. Most of us take consultations from banks while ignoring own decision and analysis and undeniably, this is quite a common yet costly mistake which is enough critical to avoid.

Banks generally analyze the pretax income or the ability of an individual to earn and then decide if the person is eligible for the loan. However, they are not responsible to consider other personal money factors and budgets. Also, banks often qualify the individual for loans while excluding certain debts. Thus, here the applicant shall think further at their monthly bills, personal expenses, emergency fund and look at the budget to verify what he can afford; otherwise, chances of finding financial trouble will be there.

To avoid any such trouble, we would suggest, plan wisely after doing the right research and then determine what works best for you. Keep the goal of a housing loan up to only 30% of what you earn. This will allow the applicant to have some funds saved for any emergency or any other financial calamity.

 Residing forever in a rented house will be a better option?

Well, this shall highly be your own decision, and don’t let anyone else judge. We understand how much joy owning a house can bring, most of us possess having our own house as a big target. Because there is always a special emotion attached to owning a house. However, this is a big decision and one shall not rush anytime. As it can also bring frustration and monetary loss if the decision goes wrong. Thus, think about buying a house only when you could spend 50% of the finances from your budget and after pondering over other monthly expenses and savings well. Renting a house has its perks as it delivers flexibility, stays predictable when it comes to expenses and you don’t need to worry about repairs or renovation expenses as well.


Long story short, when it comes to renting vs. buying, both options have their benefits and shortcomings. Superlatively, an applicant needs to consider their budget and lifestyle to switch to the best fit. We would recommend considering above mentioned factors while wondering about buying or renting. In addition to that, don’t forget to take into consideration how this decision will affect your personal financial and monetary account.

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