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Hello everyone, welcome back to the channel
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Renting a house or buying a house? This is a topic which has been on debate for a long time
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And let us see which one is the better choice in today's video
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So without further delay, let us get started on it. So the first thing which has to be taken care of is your financial stability
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So it depends on your own financial constraints, like what exactly is your financial position
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So if you have a stable income, and if you have a good credit history, or if you can
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meet out your monthly payments without risking up your day to day living, then you can very
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well go for buying an apartment or buying a house, that would be the ideal choice
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Or if at all you have a job kind of thing where it is going to be, your salary is going
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to be intermittent, where it is not going to be a fixed salary every month. Say for example, you are in a marketing where you totally rely on your incentives kind of thing
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And situations like that, it is always preferable to stay in a rental apartment, because you
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may not know whether you will be getting up a fixed income every single month
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So the incentives depends upon your targets and achievements. So whenever it is going to be a fixed salary or a fixed income in your account, which will
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be able to sustain your in payments as well as a day to day living, it is advisable to
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go for buying an option or otherwise it is better to stay always in a rented apartment
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The second point I would suggest you is about your short term and long term goals
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For example, if you are in marketing and sales, and you have to be a frequent traveler between
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cities or between states, then it is definitely not wise to buy an apartment or a house in
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your residence. It is always preferable, prefer to have like a relocating job or relocating positions where
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you can change your apartments or change your house that gives you the flexibility
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So renting gives you the flexibility to change your locations. So if you are transferred to a point A or to a point B, you can very well relocate because
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you are in your rental apartments. Considering that you plan to stay in a place for over years, at least like 5 to 10 years
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then it would be advisable to go for buying an apartment or buying a house
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So that is again going to be a better investment choice. So that also depends upon your investment goals or in your plannings, whether if it
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is a long term or if it is a short term plans. Then again, the buying an apartment is again going to be with a con where you have to pay
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your maintenance cost, because this house is going to be your own, you need to take
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care of everything, whatever happens in the house, there are repair works, whatever it
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is the maintenance of it, the paintings, renovations, all of these has to be taken care by you
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Whereas on a rental apartment, this is all taken care by the landlords, the house owners
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they normally take care of all the additional costs or if there is a problem with your sewerage
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if the problem is in your plumbing, all these are to be taken care by the owner of the building
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So if it is your rented apartment, the landlord will take care of it
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Whereas if it is going to be your own building, then it is your discretion whether you have
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to like take up those additional costs. So that will automatically become an overhead cost to you
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So whenever you are buying a house, always keep in mind about the forthcoming maintenance
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cost as well. Then there is an advantage of buying a house as well, where according to the Indian Income
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Tax Act, you have a section 80, 80C as well as section 24, where you can have rebate on
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your interest paid, your principal as well as your interest paid. So that is tax implication wise, buying a house is going to be definitely good because
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your 80C will take care of your payments, whatever payments you are paying as your
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interest, that will be automatically deducted from your income tax. Then again, buying an apartment is again a good choice when if it is coming to a market inflation
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Say for example, a community or a neighborhood is like just developing or if it is like shooting
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up in the market price, you can very well acquire and buy them at a very cheaper price
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because that is prone to get increased. Say for example, a bus terminus is going to be like starting up or if it is a metro station
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going to start up in your nearby neighborhood. So you can very well buy positions and keep them at a lower price
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As the price increases, you can very well sell that off and then you can reap the benefits
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or the profits or profit. So always keep a watch on your market
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Also if you are buying these apartments, you can very well give it for rentals as well
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That is going to be again a good choice for you. So the future value appreciation is something which you need to take care of because areas
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normally depend upon your availability or your reachability with the city. So if you are buying in the outskirts of the city where you are living in, always make
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sure that there are enough modes of communication or transportation between these two places
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so that the price increase or the appreciation automatically happens over a course of time
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So as a conclusion, I would say that like there are both pros and cons on all of it
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So if you have a down payment, if at all you want to buy an apartment, the first thing you need to take care of is your down payment
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For example, you are buying an apartment or a house worth 1 crore, then you need to pay
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at least 25% off as your down payment, which is about 25 lakhs. So you need that amount
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Then again, that is going to be taken care from your savings. So your savings is going to be wiped off completely
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After that, there is going to be a registration cost as well. So the place where I am living in, there is almost 11% as your registration cost
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So that again comes to 11 lakh at most. So again, I need to take out 36 lakh initially as an investment from my pocket
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So that savings is going to be completely exhausted. The rest 75 lakhs is going to be taken as a home loan from a bank where an EMI will
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be calculated about 8.2% or 9% depending upon my Sibyl score. So that is going to be debited every month from my account
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So the down payment is something which you need to take care of. So do not think about buying a home unless and until you have a down payment in hand
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That is the first thing. Then about the recurring cost. The recurring cost is nothing but buying an apartment is going to be your monthly EMI
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So that has to be taken care of. Then the maintenance of it. As I said earlier, there is going to be maintenance cost involved in it
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Further, there is going to be like property tax and appreciation. There is going to be governmental tax which are going to be happening on your property
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So every year you will be paying on that as well. And about your house renovations as well
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Once in three years or once in five years, you are planning to have like a complete whitewash
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of your home or you wanted to replenish with your tiles and marbles. So all those are going to be including additional recurring cost of your villa or your apartment
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Then long term investment wise, it is going to be definitely good if you are buying them
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at a cheaper price. If you are acquiring this property at a cheaper price, then there is definitely going to be
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a better ROI when compared to that. So but buying an apartment definitely needs about your down payment as well as your recurring cost
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Then having this factor said, there are advantages of renting an apartment as well
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If your job requires you to travel frequently between places, then renting an apartment
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is the ideal choice. And if you do not have the down payment, you can very well be in rental apartments
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And if at all you wanted to like have that feeling of comfort or like being in a community
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with a group of people, then having or staying in an apartment is going to be definitely
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good because you live with a community of over 100 or 150 families where you will be
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like in fact your children would feel really comfortable to grow up in communities
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So that would be one of the best choice. There is a safety as well as security in an apartment or in a community in a rented apartments
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But when buying, there is again going to be a peace of mind, you feel that comfort in you that this is your own property, you are living in your own property
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So that permanence and that mindset is something which cannot be acquired in a rental apartment
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However, as a point or as I would say that like it is an emotional thing, like it is
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about one's own emotional choice. It all depends upon your financial situations, your financial budgeting and constraints along
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with your mode of work like whether you are a frequent traveler or you need some kind
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of safety and security at the place. So both has their own pros and cons
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If at all you ask me for my suggestion, then I would say that if you are in your mid-twenties
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or late-twenties, then it is definitely not an age to buy a house
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Again I repeat, this is not a financial advice, this is my own way of perception. So you can, you may have a different idea or ideology
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If you have some, please do leave your comments there. But what I would say is like in the twenties, try experimenting or try finding out ways
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to multiply your money, try compounding them and it is the mid-forties or the late-forties
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or the ages for you to buy an apartment or a house because the money which you are going
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to spend on buying this apartment or a house, the down payment as we saw in our example
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almost about 36 lakhs, this 36 lakhs if you are going to save it as an SAP for over of
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I would say like 3 years, 50,000 every year, every month. So that is going to be like almost 6 lakhs, then 36 lakhs is going to be 6 years
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6 years if I am going to pay almost 36 lakhs as my SAP amount, in a period of 20 years
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this 36 lakhs is definitely going to cross over 1 crore to 1.2 crores
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So that will be a very good amount for you to buy your own property with cash rather
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than going with an apartment, in a loan with another bank. So that is going to be giving you a better ROI
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But if you are getting something at a very cheaper price, then it is always advisable to buy them at a cheaper price
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But the market is so clutch like with inflation that every property price are almost like
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doubled up. Nothing is there available in the market. Even a 800 square feet property comes about 50 lakhs
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So it is always advisable to be in a rented apartment when you are in your mid-ages and
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then like plan for your own living when it comes to your 40s and late 40s
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So that has been it. That is my comment on this. If you have a different opinion, do leave your comments on the chat box below and I
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will catch you up in the next video. If you like this video, do share it with your friends and smack that like button as well
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I will catch you up in the next one. Thank you
