Recently, we had an interaction with one of our customers and she mentioned that her dad was shocked to see how much she is paying as rent and asked her to buy a flat. Relatable right? During the Fello interaction, she asked our founders if it is better to rent a house or buy one! And this is one of the most burning questions in recent times with skyrocketing rental prices and also real estate prices. But we have the answer for you!
Buying vs renting a house is majorly influenced by two factors:
- Emotional quotient
- Financially quotient
Let’s talk about the emotional angle. We as Indians are brought up with the mindset that we should live in our own homes. And it gives us a sense of belonging, ownership, and absolute peace of mind. We have seen our families and friends always aspiring to have their own house and knowingly or unknowingly we have been tuned into that mindset of owning a house one day. So it depends on a case-to-case basis on how emotionally a person is connected with the idea of owning a house.
But now, here is the financially factual information which might help you to think with your mind as well. Let’s assume that you are planning on buying a 2BHK which is ₹1Cr and are going to take a loan on it for 15 years. If you do the math by including 7% property appreciation per year and also other expenses for the house, your net benefit from buying the house will be roughly around ₹1.3 Cr.
On the other hand, if you are staying in the same 2BHK for ₹30k rent, you will be ending up with a net benefit of ₹1.9Cr by the end of the next 15 years. This includes all the rental appreciations of approximately 7.5% per year, your HRA benefits, etc.
Check out the detailed video over here. We have also prepared a sheet for you to plug in your own numbers and make a decision.
So if you see theoretically, you can come to the conclusion that renting a flat for the next 15 years and buying it once you are financially stable is a better choice. Also here are a few pros and cons of owning vs renting a house
Pros and cons of buying a house:
Pros and cons of renting a house:
So that’s what buying vs renting a house looks like. Now is the time to take the best decision based on your needs! Also, if you are someone who is renting a house, we are making life much easier for you by paying your rent through Fello Flatmate. Save your salary on Fello from the 27th to the 3rd of every month and if you are lucky, we pay your rent!
Find out more on Flatmate here: https://fello.in/flatmate/
