Choosing whether to rent or purchase a Property in Pune is a significant choice that will impact not just your lifestyle but also your financial well-being.
Renting vs. owning a home has always remained a hot topic. Real estate ownership is marketed as a long-term investment that will likely provide capital gains while also serving as a source of tax savings. Renting has many benefits, including the fact that it requires little to no responsibility and allows for more flexibility. People, on the other hand, often think that purchasing a house rather than renting is the more financially sensible choice.
Although owning a house is often preferable to renting, it’s essential to note that owning is not always preferable to renting, and renting is not always as easy as it seems. Consider the pros and cons of homeownership to determine if renting or purchasing is the best option for you.
Pros of Renting a home
- In rent vs. buy, when you rent, you have the option to relocate whenever your lease expires without incurring any fees.
- The most common misconception regarding renting is that you are “throwing away money” every month, but that isn’t correct. Housing is required, and this will always be expensive in one form or another for most people.
- The leaking faucet, as well as any other broken or worn-out items, are the responsibility of the property owner. As a result, you won’t have to worry about including such unexpected expenditures in your budget.
- In renting vs. owning a home, there are no upfront fees in renting since there is no down payment. Except for a security deposit, which is often equal to one month’s rent, you won’t have to write an extensive check or pay the expenses associated with obtaining a mortgage.
Cons of Renting a home
- In renting vs. buying a house, when you leave your rental, the only things you take with you are your belongings, which include furniture and dishes that you own. It is the equity of the property owner that increases, not yours.
- There will be no improvement in your credit score. While paying your mortgage on time helps enhance your credit score, paying rent on time does not have the same effect.
Pros of Buying a home
- In renting vs. buying a home, homeownership provides intangible advantages such as security, a sense of belonging to a community, and a sense of pride in one’s possession.
- As you own the home, you have the freedom to remodel it to your specifications, which is something that tenants do not have.
- With a fixed-rate mortgage, you will pay the same amount each month for principal and interest until the loan is paid off. Rents are subject to rising at the end of each yearly lease renewal.
Cons of Buying a home
- The property market is booming, with sellers often receiving their asking price and more. This makes it difficult for first-time purchasers who may not have saved up the necessary funds for a down payment. It also makes it difficult for individuals who like deliberating over meaningful choices.
- Depending on the type of mortgage, closing costs can range from 2 percent to 5 percent of the purchase price. They can include a slew of fees and property taxes, mortgage insurance, a home inspection, the first-year homeowner’s insurance premium. Typically, it takes approximately five years to recoup such expenditures.
