Buy or Rent

Buy or Rent – Factors That You Must considered before deciding whether buying or renting house.

Buying a house is a one of the big dream in every Indian. There’s a huge sentiment attached in it. However, real estate prices are in an upward spike and so the interest rates on loans. That is the why a lot of people to evaluate whether they should rent a property (house) or buy one.


Below are some points to be considered before deciding whether buying or renting house.

Financial status:

First you need to think that – how much of your own money can you set aside for buying a house/renting a flat? This is a very fundamental question applicable for people who may be thinking of taking a bank loan to purchase a property, as well as those wanting to stay on rent. Along with that you need to think will your income be sufficient to cover your monthly loan installments (EMIs) and your personal-living expense comfortably.

Financial stability:

If you are not sure about your employment prospects in the near future, you can postpone your home buying decision and rent instead. For example, if you are thinking about changing your job that may impact your earnings, so it may be good to postpone your buying decision till your job change happens. Till you think that you are financially stability, better to rent rather than buy.


If you are a person who is in a job that involves relocating to a new place within a small span of time. It would always be better to rent a home rather than buy one. Buying a property ties you up to that particular location but renting can allow you to move near to your work location.

Inflation and Cost of living:

If there are a signs of economic downturn or inflation, it may be advisable to postpone your buying decision and rent a house. What happens if inflation shoots up after you buy the house? The cost of living starts upward spike. This hike indirectly impacted in our everyday life.

Return on Investment:

In fact, from a very long time it was believed that buying is always better than renting. Every Indian believes that Real estate is a very good investment option.

Hidden costs in buying/renting:

True cost of buying and owning a house is much more than the hidden maintenance cost of the house. Following are some of the additional costs which home owners have to accept before/after buying the property.

Registration and stamp duty and Insurance:

In most of our states, stamp duty is 5-7% which mean that a for a property worth Rs 50 lacs, the stamp duty will be around Rs 2.5 to Rs 3 lacs. In addition, registration fees amounting to 2% of total property cost has to be paid to the courts for registering the property. Also, you will have to insure your property once you buy it. This will take care of risk that may arise due to any unforeseen circumstances. In fact, most banks and financial institutions give loan only if the property is insured.

Renovating and Furnishing:

Once you buy a house, to live in it, you may have to decorate the interiors. Even though this amount will vary depending upon your individual preferences, roughly it may involve expenses amounting to ½ – 1% of the total property cost.

Repair and Maintenance:

Home maintenance and costs of repairs is a sizeable expense which is borne by homeowners. Depending upon the condition, age and size of your house, you may have to set aside funds annually to take care of periodic maintenance charges and any repair work that may be required. When renting a house, you will not have to worry about the maintenance costs associated with it. Pipe leaks, need for painting the walls etc. are expenses that a house owner has to deal with and honestly maintaining a house can be pretty expensive in today’s scenario.


We all know that both renting and buying a house has its own pros and cons. But at the end of the day you will have to think before all the factors mentioned above before deciding the big decision.







Anjali Radhakrishna

Comments are closed.