What is the Difference Between Renting and Buying a Property?

Buying your own dwelling v/s renting is a huge dilemma among most of the people. While the former is a huge financial commitment, it assists you in gaining a big asset and secures your future to an extent. Many people are opting for the same because the interest rates are plummeting too. This article helps in weighing the pros and cons of buying v/s renting a property. Read on.

From an Investment Perspective

Buying a house is one of the huge investments you can make. Before you invest in a house, keep some factors in mind like prevailing market conditions, circle rates, location of the property, maintenance of the house etc. Since, the last decade, the prices of real-estate have reached to the pinnacle. And in the imminent years, your property can be of a much higher value than what you paid for in the first place.

For renters, on the other hand, it is not a big down-payment. The money saved by them by paying EMIs, registration fees, stamp duties, property taxes etc. can be easily invested in buying a house instead. Or they can also invest their savings in mutual funds to PPF account for their imminent future.

Costs Involved

Buying a house involves many expenses like from downpayments to the EMIs if you have taken, loan processing fees, registration costs, annual maintenance charges, home insurance and property taxes.

Renting, on the other hand, involves only rent-payment on a monthly basis. If you do not decide to buy a house, you should be committed and be able to pay the monthly rent even after your retirement.

Benefits of Each Option

For renters:

  1. Renters can save money for their future purposes.
  2. Renting can be a better option if they find a place in an urban location with very high property prices.
  3. It makes it easy for them to relocate for the purposes of jobs or any other reason.
  4. Apart from the rent, it involves zero maintenance cost on the occupied house.

For home-owners:

  1. Owning a house ensures more stability as there are no complaints of the property owner because you finally own the place.
  2. Owning a house ensures that it secures the future of you and your family.
  3. Loans by BC Loans have EMI amounts are deemed to be uniform throughout the tenure, rent amount, on the other hand, is deemed to increase over time.
  4. It helps you reap many advantages like tax benefits etc.