Many people dream of owning a home. To achieve this, they use their hard-earned money throughout their lives. Others take a bank loan to build their dream home, while some live in a rented house without any worries. What are you thinking?
The housing market is facing many challenges. Should you buy a house in such circumstances or stay in a rental home? Which of these is the best choice? Let’s see now.
Benefits of buying a house: Buying a home with a bank loan has definite tax benefits. As per Section 80C of the Income Tax Act, the principal amount (up to Rs. 1.5 lakh) is tax-exempt.
Also, under Section 24, interest paid on a home loan (up to Rs. 2 lakh) is exempt from tax. A house is a great asset. Its value increases by approximately 8-10 percent annually. It will provide financial security for you and your descendants for generations.
Initially, the EMI you have to pay may seem high. But your income will increase in the future, and inflation will have an effect. So, paying a fixed EMI becomes easier as time goes by. Owning a home gives a sense of satisfaction, security, and financial stability.
Disadvantages of buying a house: You must have money to buy a home or take a bank loan. Even then, a substantial down payment is required, in addition to registration fees, stamp duty, etc.
After buying a house, repairs and renovations should be done from time to time, which can put some financial burden on you.
You can’t sell the house anytime and make money. Home prices vary depending on market conditions. Moreover, the property selling process takes a long time to complete.
Advantages of staying in a rented house: The rent payable for a rented house is much lower than the home loan EMI, so the financial burden is less.
If the rental house is significant, you will only need to give enough advance for 2 or 3 months. Buying the same house requires a substantial down payment.
Moving from one house to another is difficult, but that is not the case in a rented house. You can quickly move to another home of your choice.
Disadvantages of staying in a rented house: No matter how long you stay in a rental home, you cannot own it. Moreover, you must follow the rules and regulations set by the house owner and adjust everything.
As time goes by, rents of vacant houses increase, usually by 5-8 percent annually. You can pay rent as long as you are employed or earning, but house rents must be paid for life. When health problems and financial emergencies arise, paying house rent on time becomes difficult.
Have you seen it? Should owning a house suit your needs and finances, or should you stay in a rental home? You have to decide for yourself.
Note: The points mentioned in this article are only for your understanding. It is always advisable to consult a certified financial expert before making important financial decisions.