Its is something that continues to go on. Would you rather rent a home or would you rather pay the money you give as rent towards installments for your own home? Especially in Mumbai as the rent is so high that they can be easily used for installments...
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  • Not really.
    Looking at a 2BHK in a location like say Andheri West/Lokhandwala/Oshiwara, cost would be 1.5 Cr upwards whereas rent would be around 30-35K. Hence rent works out to be only 2% of the house cost, lesser if you consider that landlord will be paying monthly maintenance also.
    So its kind of cheaper to stay on rent currently in such areas.
    (I have given a 3 BHK for rent in Oshiwara at 45K which doesnt even give me 1% return on the market value of the flat after paying the maintenance charges).
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  • if you want a cash flow of 8% gains every year with no principal appreciation put it into FD. Rental yield in top tier cities is not going to be more than 2-3%.
    What sh-saxena is forgetting is that there is capital appreciation on top of the 2% - and if he bought it more than 1.5 years ago it will definitely be 15% +.

    So if you think there is scope of capital appreciation - and can do without regular cash flows - and are likely to stay in the same place for long better to buy outright.

    In any case you will want to buy a property some time in your life - and even if this one is not the perfect one it will be useful as appreciation/depreciation in its price will reflect market movement so you can be prepared to sell this and buy the one you want later in life.



    Originally Posted by sh-saxena
    Not really.
    Looking at a 2BHK in a location like say Andheri West/Lokhandwala/Oshiwara, cost would be 1.5 Cr upwards whereas rent would be around 30-35K. Hence rent works out to be only 2% of the house cost, lesser if you consider that landlord will be paying monthly maintenance also.
    So its kind of cheaper to stay on rent currently in such areas.
    (I have given a 3 BHK for rent in Oshiwara at 45K which doesnt even give me 1% return on the market value of the flat after paying the maintenance charges).
    CommentQuote