Is it better to buy or rent a house in India?

While owning a home is typically every Indian’s dream, skyrocketing property prices, especially in metros, have led to people preferring to rent rather than buy. In India, it has been observed that people who can afford to buy a house place a higher value on owning a home, with renting serving as a compromise.

What is the cost of buying a house in India?

Let’s say, for example, the base cost of the house is 3.75 crore rupees. In this case, the stamp duty will come up to 18 lakh rupees and the registration charges will be 3.75 lakh rupees. So stamp duty and registration charges together will cost you around 20-21 lakh rupees.

Is it better to live on rent or buy a house?

So, for the initial few years, living on rent, will give you the breather to sort your finances and save some money toward buying a house. Also if you are living on rent, you can claim the tax benefit on your House Rent Allowance (HRA).

Why is it so hard to buy a house in India?

The primary reasons are the insane cost of real estate in India and our approach to buying a house. Let’s understand this with an example of Mohit. Mohit lives on rent in a 2BHK in a prime location in Gurgaon and pays Rs. 50,000 as rent.

How much money do you need to buy a house in India?

So, buy a house only when you are able to put at least 50 percent of the property price from your own pocket and also you have double that amount as other financial assets. For instance, in Mohit’s case he should have at least Rs. 75 lakhs if not more before he considers buying a Rs. 1.5 crore house.

How do you compare owning vs renting a house?

To compare owning vs renting, the first step is to calculate the investment returns on the down-payment and other related costs that one incurs upfront while buying the house. The second step is to calculate the investment returns of the difference between the EMI payments and the rent over the entire duration of ownership.