Why owning a house is better than living on rent

Often, when it comes to finding long-term accommodation

We are confused about deciding - what makes sense? Living in a rented house or getting a property? I am a homeowner! Based on this you might think I am an advocate of homeownership over renting. Nope, not at all? It's just a matter of experience which makes you think that buying a home is a smarter choice.

How to decide whether to live on rent or to buy a home?

Well, this is quite simple and can be decided by calculating the price-to-rent ratio (P/R ratio). This number will give a rough idea of whether homes in your area are fairly priced or not.

What are the benefits of homeownership over rental accommodations?

Firstly, buying a home gives you a sense of security and pride in homeownership. That's why expert's advice, youngsters should consider buying a house in the early stages of their career.

You don't have to face any increasing rentals.

Besides, when you live in your own house there is less likelihood of interference in your life.

Similarly, when you buy a home with a loan, you are aware of the EMI required to be paid over the long term. This makes the future costs predictable and more stable.

To make this process easy? Ccheckout the financial implications on rented home v/s own home

Case 1 - Assume a person living in a 3 BHK rented home and pays a rental amount of Rs 20,000 per month.

• Average rent appreciation is 5%
• Expected rent after 20 years is 40,000
• Expected rent after 40 years is 80,000
• Amount paid in 40 years is 2.9 crores

Case 2 - A person buys a 3 BHK home for Rs 40lakhs on a home loan for 20 years.

• Tenure is 20 years
• Interest rate is 8.3%
• EMI is 34,200
• The total amount paid in 20 years is Rs 82lakhs 

In this case, the rent amount saved by a homeowner who lives for 40 years is 2.1 crores.

Other added advantages of owning a home of your choice over the rented ones

Seriously, owning a home could generate additional income - either in the form of rentals or from paying guests.

Besides, rentals may seem cheaper compared to EMI in the short run. But when compared in the long run it is far higher than the cost of the house and rentals cannot be recovered.

Equally, a rental property cannot be mortgaged by a tenant. But it is easy for a homeowner to mortgage the property.

Renters have to shift out of a rented home anytime (at the request of the owner).

Now let me be clear - owning a house gives you stability and freedom when compared to a rental property. So, if your finances are in good shape and property prices are not exceptionally high in your preferred location then you must take a stand...