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Rent or buy?

Last updated: December 20 2017
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  • Rent or buy?

    Do I rent or do I buy? Many people struggle to find the answer to this question. And although most people will eventually decide to purchase a home, because of their financial situation, some prospective buyers might want to wait to commit.

    Though it is always considered to be wise to invest in a property, however the current cost and the future cost of the property should also be taken into consideration.

    To decide whether it makes more sense to buy or continue renting, consider this: it is often far cheaper to own a home than to rent one. It sounds almost counter-intuitive - spending a couple hundred thousand bucks on a house should make you broke, not help you save money!
  • #2

    #2

    Re : Rent or buy?

    I want to sell then buy...

    Hi I am vinod aggarwal

    I have a flat of 1000 square feet in an area and am willing to shift to a posch resedential ... i have talked to many brokers but no one is giving me a good deal... I am looking for an 800 square feet flat there.... I am also confused with whether I should buy first or sell first....

    do you know any good realtor in east delhi...

    Comment

    • #3

      #3

      Re : Rent or buy?

      Estimate future cost - is renting a viable option?

      But I believe that even you have money in your pocket the most important thing to consider when contemplating the purchase of a home is not its cost now, but its cost in the future. Exactly.... I'm talking about the resale value.

      In other words, how will your monthly installments or EMI for you home compare with monthly rent payments ten years down the line? As a lessee, you are not protected from increases in the cost of living, also known as inflation, so your landlord can increase the price of your monthly rent at his or her discretion.

      In metros like Delhi, the forecast for annual increases in your monthly rent payments is 10% per year. Although that increase in rent might not sound like a whole lot, if you continue to rent year after year, it certainly adds up.

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      • #4

        #4

        Re : Rent or buy?

        estimated cost...

        hi

        i want to know the process through which i can evaluate my property....

        Comment

        • #5

          #5

          Re : Rent or buy?

          Let me guide you....

          I remember this issue as i myself have been through this...
          mate you can chose property evaluation tool from various real estate site.,.. and i would suggest you to chose a real estate site that is in acquaintaince with the locale you are residing or where you have your property as they can give you the true measurement details and evaluation....

          i think i answered your question fully...

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          • #6

            #6

            Re : Rent or buy?

            Rentals in cities at an all time high

            As global firms and some of their overseas staff flock to India to tap opportunities in its burgeoning economy, premium residential rents in cities like Mumbai and the capital, New Delhi, are going through the roof.

            Add a rising number of high-income Indian professionals and a shift to a nuclear family from the traditional extended one, and the number of people looking for good homes is pushing rents to levels seen in the more desirable parts of London and New York.

            Industry experts believe that rising property prices and hike in home loan interest, have made property investments for the fixed income salaried class difficult. But the rental prices in the recent years have also rised to astronomical figures.

            Even then, be it an expat worker or an Indian professional, the mind-boggling demand for high-end rented homes will continue.

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            • #7

              #7

              Re : Rent or buy?

              To buy or rent depends on whether you are an investor or a user. Makes sense to buy.

              Incase you are an investor in the short term, think twice. Incase you wih to decide whether to stay in a rented place or an ownership, then I would recommend; buy. When you buy and put up money or go for a loan, it's investing. incase of loan, you also get tax benefits, bringing the cost of the flat lower. Far as rent, that's money down the drain. Long term, with inflation and scarcity, property prices will always rise.


              Originally posted by kushwant View Post
              Do I rent or do I buy? Many people struggle to find the answer to this question. And although most people will eventually decide to purchase a home, because of their financial situation, some prospective buyers might want to wait to commit.

              Though it is always considered to be wise to invest in a property, however the current cost and the future cost of the property should also be taken into consideration.

              To decide whether it makes more sense to buy or continue renting, consider this: it is often far cheaper to own a home than to rent one. It sounds almost counter-intuitive - spending a couple hundred thousand bucks on a house should make you broke, not help you save money!

              Comment

              • #8

                #8

                Re : Rent or buy?

                Originally posted by vinod View Post
                Hi I am vinod aggarwal

                I have a flat of 1000 square feet in an area and am willing to shift to a posch resedential ... i have talked to many brokers but no one is giving me a good deal... I am looking for an 800 square feet flat there.... I am also confused with whether I should buy first or sell first....

                do you know any good realtor in east delhi...
                Any views on this. ..

                Comment

                • #9

                  #9

                  Re : Rent or buy?

                  Here are certain factors that can help you decide whether to buy a property or rent it out:

                  Non-Financial Factors

                  Sense of security: For many, owning a house is a sign of psychological security and a status symbol. Culturally, home ownership, like gold, is also seen as an asset one can turn to in times of financial difficulty.

                  More control: Rented houses come with their own set of restrictions on what a tenant can do. Typically, landlords do not permit major modifications or customisation. Also, there is a disincentive to spend on the house, which you don’t own.

                  Location & life uncertainties: Often people have to move to different cities or even countries due to their career needs. Home ownership in such cases is not considered a wise option until made purely for investment purpose or generate rent out of it. Also, if you haven’t really zeroed in on the ideal location in a city, it may make sense to rent it out rather than buy. The decision can also be influenced by where you want to live –suburbs, close to the workplace or in city’s central localities.

                  Financial factors

                  EMI vs rent: Both involve a monthly outflow of finances. However, many people see equated monthly instalment (EMI) as a contribution towards building a significant asset, rent, on the other hand, can be viewed as a monthly expenditure that doesn’t build an asset.

                  Income level & certainty: Your finances are a decisive factor in buying/renting a home. Paying EMIs could be a huge burden on your budget and are spread across a period of an average of 10-20 years. Factor in your household and investment expenditure, if you plan to buy a home. Also, consider income stability. Uncertainty about future cash flows makes renting a better option as it gives you the flexibility of moving to a place with a lower rental.

                  The mathematics: A number of calculators are available online for you to make the right decision of whether to buy or rent a property. These calculators take into account hard numbers like the initial down payment, amount of loan, property appreciation, and compare it with expected rent payout and opportunity cost of money saved and share recommendations. But, these calculators inherently assume financial discipline and optimum investment of money saved as down payment. Typically, the maths works out for a buy decision if one intends to stay there for a long period.

                  Tax benefits: To encourage home ownership, the government extends tax breaks on both interest and principal. A home owner can also get tax breaks on capital gains when a house is sold provided certain conditions are met. Home buyers can avail deduction on principal repaid and also, on interest payment for both self-occupied and rented houses. This lowers effective cost of home ownership.

                  Comment

                  • #10

                    #10

                    Re : Rent or buy?

                    This is one question you have to answer for yourself. Depending on several factors, mostly personal, you could choose your option. In case you opt for buying a property because you have saved enough funds, do make sure that you do not end up parking all your money in an immovable asset. There might be long term damages in case you choose to do that.

                    Comment

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