Is buying your dream home the correct decision for you. Read on before making a decision:
Almost all of us dream to have a house of our own, but in this era of high pricing and low budget is buying a home worth it. Just like any other thing, there are pros and cons of buying as well as renting out a house. Buying a house gives you the option of generating rental income in the future too. But buying a home or any property is a huge investment and one should take calculated risks regarding financial implications based on one’s income. This is necessary to avoid bad loans and other issues. Let us check out the merits and demerits of both cases.
Advantages of buying a home:
- Rent is an expense while EMI is an investment. As you clear out every installment you own a bigger share of the property.
- You need not change your address every few years and there is no worry to pay additional brokerage fees involved in finding a new house. No hassle of moving in and out of a new place every two or three years.
- In many countries, you can get a tax benefit, if you are buying a house on loan and paying EMI.
- You can generate rental income in the future if you are in a financial crisis.
Advantages of renting a house:
- You can get some income tax deduction on the rent that you pay.
- There is no stress of regular EMI payments as well as other overheads like maintenance, property tax e.t.c.
- You can get lower rents on the heavy deposit amount. Usually rent is always lower than EMI.
- You can easily change your home based on your work or study location.