Financial Dilemma: Should You Buy or Should You Rent a House?

While it was difficult to purchase homes decades ago, it has become much easier to do so, thanks to better financial plans available at our disposal. However, there are several factors at play which must be taken into consideration before investing financially and emotionally in a new home.

  • 1) Financial Backup When you go to purchase a home, you need at least 40-60 percent of the down payment of the house handy while the other part can be paid through a loan. This not just is expensive, but also is a decision that requires you to have a stable job enough to be able to pay off the EMIs on time. Financial fluctuations can deeply impact your home loan which can create issues in the long run. However, renting a home can be a better option for those who are looking for financial freedom and flexibility.
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  • 2) Opportunity Costs: Even though buying a home is a matter of pride and security for many, this decision also needs to be taken while considering other opportunity costs. So, even if you have the financial ability to afford a home at a given stage of life, that decision must not be at the cost of your child’s education and future. Take into consideration all these financial decisions before investing in purchasing a home. Meanwhile, if you do wish to buy a home in the long run, consider renting for some years and building stability for your family while also saving for the same.
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  • 3) Mobility & Flexibility: If you are someone who likes to travel frequently or has a transferable job, then purchasing and investing heavily in a home makes little sense. Renting a home gives you higher flexibility and mobility in such cases. However, if you are someone looking to set your roots at a particular place and settle down for the rest of your days, then investing in a stable home will be the best bet for you.