Buying a House or Renting?

Amit Goenka, MD & CEO, Nisus Finance shares his answer to the question of whether to rent or buy a home. When it comes to home in any place in the world, you have two options - buying one outright or taking up a rental. It's quite difficult for everyone to buy a house outright overnight, so the next best option is to take up a rental. The question is especially true in the post-pandemic environment where with the WFH, homes have become our place of work as well and has suddenly increased our affinity to own a home unlike in the past. Buying a house comes with a large monthly expense for the next 20 years or even 30 years. In contrast, rental expenses are lower and can be flexible, especially in the era of WFH where you can negotiate the rents down or choose to change the house or locality in case it becomes unaffordable. Most banks require a 20% payment amount as the down payment towards the house. The EMI amount outflow becomes less with a higher amount of down payment. Renting a home means removing the hassle of moving without penalty each time your lease ends. As a home-owner you will also need to incur expenses on maintenance and property taxes and repairs and refurbishments. Renting involves just the monthly rentals and leave the other worries. As a home-owner one is entitled to raise your savings directly or indirectly and forces you to take a hair-cut in your discretionary spending and lifestyle. As a tenant, the options to invest the potential down payment of the margin money into high yielding assets such as equity mutual funds, corporate deposits or provident fund is much higher due to availability of surplus funds. Buying a home doesn't always mean a good investment and renting doesn’t always mean throwing money away. It’s all about choosing what’s right for you and as per the need of the hour.