Own House vs Rental House: Which One is Right for You?

Choosing between Own House vs Rental House is always a tough decision. How do you choose which one is the right choice for you? Here’s an article which guides in choosing which is right for you.

Own House vs Rental House: Explore the pros and cons of owning vs renting a house. This guide helps you decide the best option based on your financial goals and lifestyle needs.

Explore the pros and cons of owning vs renting a house. This guide helps you decide the best option based on your financial goals and lifestyle needs.

Key Factors of Owning a house vs Renting:

Whether you’re in a rented house or you own a house both have their own financial advantages & disadvantages and owning a home isn’t a right choice for everyone.
Living in a rental home means you need not worry about the property tax, repair or renovation bills unlike owners.
Unlike owners, renters should pay 6 months or 1 year of rent as a deposit whereas owners can make a sizable down payment when buying a new house with the housing loan.
Owners will have to pay for EMI, maintenance, house repair or renovations whereas renters only pay monthly rent, utility bills.
In some cases, renters are asked to pay the monthly maintenance bill & water bill to the owners or the association if they live in a gated community.
Renters’ deposit amount will be deducted if there’s any external damage to the house by the renters during their stay.

Now let us discuss the pros and cons of owning or renting a house.

Pros of Owning a House

Owning a house is a dream for many. It offers stability, serves as a valuable asset, and contributes to building wealth over time. Some of the pros of owning a house includes:

Investment Potential: It acts as an investment and builds wealth in the long run. Even if we face any financial struggle in the future the house can be sold and it has a higher resale value.

Stability: If you’re a person who would stay in a place for a long time and also have stable income then buying your own house will benefit you. Instead of paying a rent every month we can utilize the amount and make a down payment to buy our own house.

Tax Benefits: Owning a house means you can avail tax exemption benefit. You can avail 1.5 lakhs per financial year under section 80C

Privacy: Living in your own house provides greater privacy and full control over the space, allowing you to make decisions about its decor and design.

Cons of Owning a House: While owning a house has its advantages there are also disadvantages. Here’s some cons of owning a house:

Down Payment: Though banks provide housing loans to buy houses, we should make a small percentage of the amount as down payment. So, you should have some savings or an emergency fund in order to make it.

Home Ownership Costs: Any house repairs or renovations, maintenance and amenities bill for the house will be borne by the owner.

Instability in Job & Place: If you don’t have a stable workplace or you have work transfers often & unstable income then buying your own house will not benefit you much. Though we can rent the place and earn from it considering the recurring expenses such as amenities bill, repairs or renovation bills may not benefit much.

Inflation: If there’s inflation in real estate, the value of your house can get affected in terms of monetary. Sometimes reselling a house may also get harder.

Pros of Renting a House

Whilst owning a house has its set of pros, a rental house also its set of pros & cons. Rental house offers flexibility, lesser spend on utility bills, and there’s no recurring bills such as maintenance, amenities and repair bills.

Flexibility: If you’re a person whose work requires frequent transfers, then renting a place will be beneficial. You can enjoy all the amenities without worrying about house expenses or renovations & repairs.

However, you should also be able to pay your monthly rent and the deposit amount to the owner.

No Recurring/ Home Ownership Costs: Renters don’t need to bear the costs of home repairs, renovations like painting, or annual maintenance in gated communities. They can still enjoy amenities like swimming pools or gyms, if available.

Lesser Utility Bills: A renter has to pay only his rent, water & maintenance bill if demanded by the owner and the EB bill. All these costs the renter a lesser bill compared to owning a house.

No Property Tax: Though there’s exemption of tax in owning a house, if we rent a house there’s no need to worry on the property tax levied by the Government of India. This saves a ransom amount of money every year.

Cons of Renting a House

Renting a house also has some drawbacks, including a lack of stability, compromised privacy, and the requirement to pay a deposit equivalent to 6 months or a year’s rent. Additionally, the owner can ask the tenant to vacate the property, sometimes with little or no prior notice.

Lack of Stability: A renter will lack stability as they may have to relocate every few years once. The reasons include factors such as increase in rent, and maintenance in case of gated communities.

Relocation: Renters who are married or having children will have to relocate to accommodate the family needs based on the workplace or school located.

Compromised Privacy: Renters may need to compromise on privacy, such as restrictions on the number of guests or occupants. They also lack the freedom to customize the home’s decor to their liking.

Deposit Amount: Renters will have to sign a contract and pay 6 months or a year’s worth rent as deposit amount which may be a hassle for the renters if the amount is hefty.

Opting for owning and renting depends on your priorities, financial obligations, and lifestyle needs. If you’re unsure about what’s best for you, this article offers a detailed guide to help you make the right choice. Share it with friends or family who are weighing their options!

Disclaimer: The information provided in this article is for general informational purposes only. It is not intended as financial or legal advice. Please consult your financial advisor before making any decisions.

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Own House vs Rental House: Which One is Right for You?