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Should you buy a home or rent one?
Though it may sound a bit clichéd, it is the dream of every couple to be ensconced cozily in the privacy of their very own home. With today's lifestyle offering myriad choices, young couples aspire for modern, comfortable lifestyles, considered luxurious by yesterday's standards. For most people, buying a new home satisfies a basic human need. It brings with it a sense of security.
The decision to buy a home involves emotional and economic factors. If you are a couple undecided as to whether to buy a house or rent one, here are a few pointers.
There are several factors to be cautious about while buying a house.
- Do you have enough money? Bear in mind the fact that the initial cost of homeownership can be substantial. Figure out whether you will be able to pay the initial cost. Do you have enough money to put down to buy a home? Would you require a loan. You need to work out all the financial aspects of buying a home.
- Does your job need you to relocate often? If your job requires frequent moving from one city to another and the chances of relocation are high, it doesn't make sense to buy a house right away. In addition to the expenses, you will also have to consider the prospect of renting your house out. All this entails running around and following up and hence in such cases you could consider renting.
- Do you plan to switch jobs? If you are planning to switch over to a new job, probably in a year or two, consider postponing your decision to buy a home.
- Does your job include accommodation? If you are given a family accommodation, which is convenient and is by all means better than what you'd get if you stay in your own home, then it's a good idea to postpone your decision to buy.
- Is what you can afford what you really want? If your budget would permit you to buy a home, which is far away from your work place, then think twice before making such a purchase. Although, the idea of living in your own home sounds appealing, the fact remains that it would be a strain to have to travel long distances to work. This would ultimately start stressing you out and your married life would suffer. You need to be careful what you look for when buying a home.
The disadvantages of rentingare mainly economic and financial.
- By owning your home you build equity by way of appreciation in the value of your home. Purchasing your own home is a good investment vehicle. Keep in mind the fact that if you were to let it out on rent and could procure around 1.5 % as rent, then it is a good investment as well.
- Owning a home gives you tax benefits as well. Interest paid on housing loan is an allowable deduction for Income Tax purposes. The principal repayment of loan qualifies for a rebate subject to certain conditions.
- In the long run owning a home works out cheaper than renting a house. The only thing you have to be careful about is staying within your budget. Hefty monthly payments could put a strain on your marriage.
- Owning your home gives you the benefit of extra living space and choosing the way you want to live.
- You can also invest in long term interiors solutions like flooring, POP for the walls, built in wardrobes, etc.
- Not only does your own home give you a sense of security and stability but also gives you a sense of pride in ownership, which is unparalleled.
- Last but not the least investing in a home acts as a hedge against inflation.
Irrespective of whether you buy or rent a house... at the end of the day - home is where the heart is!
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Geetha Dasarathy
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