Why is it Better to Own a House than Pay Rent?

Owning a house is a dream ingrained into our ambitions since youth. Even marketing and advertising strategies rely on this tendency to own a roof on your head, deliberately. However, with a large number of urban youth having to migrate to bigger cities in search of jobs or to make a better career, owning a house is one plan that keeps seeing delays.

A Look into the Dominant Sentiment

• Thanks to the expense and the expanse involved in buying a house, you might just get confused while deciding if buying a home with a loan is better or if renting is the easier route to take.
• While each has its own slew of advantages, somewhere down the line the scales tilt in favour of buying a home with the aid of a housing loan or home loan, at the right home-loan interest rate.

Security and Mental Peace is Vital

• Social security and emotional peace are the top things you associate with owning a home. True, there remains a liability to repay a home loan or housing loan with interest attached. Even then, the sense of completion you feel in having a home you can call your own is unique.
• Renting a home gives you shelter and security of living but comes with the non-security of being a permanent place or your place, for that matter.

EMIs- No longer a Burden

• Paying an EMI for a home or housing loan is a long-term process and might even cost you more than an affordable house rent. However, with fluctuating home loan rates and lower loan interest rates due to a dull market, a home loan EMI is much more affordable now than it was a few years back.
• With the right bank hopping, comparison of rates, and sensible down payment decisions, you can get to a figure that is close to your rent, if not lesser.

An Asset in Kitty

• No matter how much you debate in favour of renting, taking a loan for buying property actually is an investment. A house is an asset, which can help you reap more benefits down the line. In fact, many young buyers rent homes near their work areas and invest in a property in native places to rent out. This gives you an income that helps balance your EMI payment.
• In the longer run, you can keep renting out your home even post loan closure. This leaves you with an income in hand. Property never goes stale though it might feel cold from time to time.

Tap the Tax Benefits

• All this aside, EMI payments allow you to claim tax benefits. This helps in bringing down your overall tax liability too. The repayment of the principal bit in your home loan is eligible for deduction as per Section 80C.
• Additionally, interest payment up to INR 2 lakh can be termed as deductible from income. This rule applies to joint loan takers as well. Therefore, both you and your spouse can club up to pitch for a home loan and reap benefits on your individual tax files too!

Property Appreciates, never Depreciates

• This is a fundamental rule of property buying, and that is why buying real estate attracts so many people from all lifestyles. Appreciation benefits and gains are taxed at 20 percent, while a property sees huge appreciation rates.
• Additionally, a reverse mortgage can be taken to source a few other needs you might have when young and while you have a stable source of income.
• Paying an EMI needs cautious planning and considerable accountability. This might seem too much responsibility over simply renting a property. The latter surely offers rental benefits as deductions, lower maintenance costs as well as the flexibility of changing homes as per need.
• However, the benefits of having a home that you call your own and get to design from scratch seem much bigger a benefit in comparison.

The Way Forward

Plan your finances and scale up whenever you need to build a savings bank. Once you are sure of your repayment capacity and get an offer approved from any bank—it is worth risking the purchase of a house. After all, how long would you like to rent?