Buy An Apartment On Loan Or Live In Rented One?

It is a conversation that you must have had with your colleagues at work. Some would have opinion that to buy an apartment is better while some would think the opposite. Owing your own house is every Indians dream or our parents dream for sure. But buying property in metro cities can be daunting with skyrocketing prices. This is why some people feel that renting an apartment is better than buying one. Both options have their advantages and disadvantages. Let’s dig into them.

What If You Buy An Apartment?

Buying a house or apartment gives a sense of pride to you because it will be your own. You might have a point that when you give out a given sum of your salary in rent, it does not create any asset. But when you pay EMI it ensures that you have a roof over your head for a month and you also get one step closer to ownership of a real estate.

When you live on rent there is a cost of shifting every time you have to change your apartment. This wastes money as well as lots of energy. It is also true that finding an apartment is a daunting task. Sometimes you also have to take day off from work to see apartments from one locality to another.

If you buy a house it is a safe investment because real estate prices keep on increasing year after year. On the brighter side you also save taxes when you pay monthly EMIs.

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What If You Choose To Rent An Apartment?

Renting a house saves you from horrors of giving interests every year. You also get saved from property tax and other legal problems that might arise on your property. You also cannot ignore that paying EMI is a responsibility and when you choose to rent you feel less responsible.

In major metro cities a house that is worth Rs 80 lakhs or Rs 1 Crore can be easily be rented for a sum of Rs 25000-30000. If you buy the same apartment on loan for 10 or 20 years; your EMIs will go somewhere up to 40000 or 50000. It also depends upon the amount you have paid as a down payment.

Do not forget that you will also pay interest that can sum equal to the value of your apartment which is huge. It is also possible that you can’t find budget friendly apartments to buy in a well-established locality. You end up compromising with the locality and wait for it to develop in another 10-15 years.

It’s not an easy decision to make but there are few points that you should consider before making a decision.

  • Identify your financial responsibilities. If you don’t have many then you can use the sum of money you have been saving for years in paying the down payment.
  • If you are choosing to rent then make sure that you are investing a sum from your salary in places that will give you good returns in 5 or 10 years.
  • Do not splurge your money just because you don’t have the responsibility to pay EMI.
  • Don’t buy an apartment unless and until you are sure that you want to settle in that particular city.
  • Do not be blind and do whatever others are doing. Do your own assessment and make your own decisions.

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Siddhant Baranwal

Siddhant is a Content Creator. He has been doing this for past three years and have managed to gain good attention of audiences for his work. He is an active reader and has huge respect for art and theatre.

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