One of the most significant decisions is whether to buy or rent a home. As a result, one should carefully consider all options. The option will be determined by a variety of factors, including the buyer’s financial situation, lifestyle preferences, and market conditions. Both options have advantages and disadvantages, making it difficult to determine which is the best option. In this blog post, we will discuss buying vs renting a houseand decide which one is a better choice.
Let’s get started.
Why one Must Buy a New House?
One of the most significant benefits of buying a house is taking ownership. Owning a home can be empowering and give an increased sense of pride and stability. Homeownership also provides many financial benefits, such as building equity through principal payments, tax deductions on mortgage interest and property taxes, appreciation over time, and usually more stable monthly payments than renting (due to fixed-rate mortgages).
In addition to the financial aspects, becoming a homeowner allows one to customize the space to fit their needs and desires. They can paint walls, remodel, or add features such as a pool at their discretion (depending on local regulations). In addition, buying a home can help build credit and create wealth by using the equity in the house.
Is Renting a Home a Good Option?
There is no definitive answer as to whether renting or owning a home is preferable. The answer is determined by the buyer’s personal circumstances, such as finances, lifestyle, and personal goals. The benefits and costs of each must be weighed against one’s income, savings, and lifestyle.. Renting offers flexibility, predictable monthly expenses, and someone to handle repairs. However, homeownership brings intangible benefits, such as a sense of stability and pride of ownership, along with the tangible ones of tax deductions and equity.
What are the Returns on Buying a Home?
When a person buys a house in Mumbai, the house transforms into an asset in 30 years. The asset provides tax benefits and capital appreciation.
For Example: Let’s say an individual buys a house worth Rs. 50 lakhs in Mumbai and invests Rs. 10 lakhs in its improvement over the next 10 years. They will get returns in two ways:
1) Capital Appreciation – The value of the property increases from Rs. 50 lakhs to Rs. 70 lakhs after ten years, i.e., a 40% return on investment (ROI).
2) Rental Income – Assuming that the same person rented out their house for Rs 30 thousand per month, the person would have earned about Rs 36 lakhs in 10 years, resulting in a total annual ROI of 12%.
What are the Returns on Renting a Home?
When someone rents a house in Mumbai, they can invest in a mutual fund based on their income. It’s mainly because they can select the price of rent in the form of a monthly income. For example, if the rent is Rs. 15,000 per month and one invests in a mutual fund that earns a 10% return annually, they can expect to receive an income of Rs. 1,800 per month on their investment. This essentially means a 12% return on the rental amount invested.
Advantages of Buying a New House in Mumbai
The property market in Mumbai is highly competitive, and prices have been steadily rising for years. This means that buying a house while prices are still low will provide an excellent return on investment as values rise over time. Additionally, many attractive tax incentives are available when purchasing a house in Mumbai, which can make it more affordable.
The Bottom Line
Buying a new house in Mumbai is an excellent decision for those looking to make a long-term investment. Piramal Realty has several projects in Mumbai that offer superior quality construction, modern infrastructure, and other amenities like swimming pools, gyms, and many more. With an easy approval process and flexible payment plans, Piramal Realty can assist in finding the ideal new home.
Frequently Asked Questions
1. Is buying a home a better option than renting?
The buyer’s personal circumstances, such as finances, lifestyle, and personal goals, greatly impact the answer. The pros and cons of each must be balanced against one’s income, savings, and lifestyle. Renting provides flexibility, dependable monthly expenses, and repair assistance. However, in addition to the tangible benefits of tax deductions and equity, homeownership provides intangible benefits such as a sense of stability and pride of ownership.
2. Will I get any return after purchasing a home?
Yes, you will. You will get capital appreciation and tax benefits as returns.
3. What are the benefits of buying a home?
Buying a home may appear to be a stressful experience, but the payoff is enormous. Here are some of the benefits of buying a house:
- Investing and building equity
- Improving credit
- Greater privacy and control over your living space
- Long term stability
4. What happens to the rent that you pay?
The rent you pay for a home adds to the landlord’s wealth. With that rent, they can improve certain things on the property and bring in new products, appliances, etc.
5. Why should you not rent a house?
Renting a property can cost more in the long run as the rent keeps increasing with time. When buying a home, one pays for it once and owns it forever.
Disclaimer- This article is based on the information publicly available for general use. We do not claim any responsibility regarding the genuineness of the same. The information provided herein does not, and is not intended to, constitute legal advice; instead, it is for general informational purposes only. We expressly disclaim any liability, which may arise due to any decision taken by any person/s basis the article hereof. Readers should obtain separate advice with respect to any particular information provided herein.