Renting vs Buying an Apartment in India

Price, taxes, rentals, equity, stability, interest, rates, and so on; these are some of the many aspects that come to mind as soon as you think of buying or renting a property in India. There have always been discussions around the pros and cons of buying versus renting in India, this dilemma exists since the time real estate markets were established in the country. This topic of discussion takes particular importance in the current scenario when considering the increase in property prices and interest rates.

Real estate affordability in India has becomes a valid concern. The Crisil report has observed that over the past decade, there has been an average increase of 6% in property prices. And the recent valuation of India’s home loan market stands at a whopping ₹ 24 trillion with the expectation of this number doubling down in the coming five years. 

All in all, when it comes to finding a place to call home, one of the biggest decisions you'll need to make is whether to buy or rent. And what works best for you will depend on your personal circumstances and goals. In this article, we'll explore the benefits and drawbacks of buying vs renting an apartment in India, and help you weigh up the factors that matter most.

Benefits of Buying an Apartment in India

Long-term investment: One of the most significant advantages of buying an apartment is that it can be a long-term investment that can appreciate over time. Unlike renting, where you are essentially throwing away money each month, buying an apartment gives you the opportunity to build equity and create wealth over time.

Greater control: When you own an apartment, you have greater control over how you can use the space. You can renovate or remodel to suit your needs, and you don't have to worry about getting permission from a landlord to make these changes.

Stable housing costs: When you rent, your landlord can increase your rent at any time, which can make it difficult to budget and plan for the future. When you own an apartment, your EMI payments will stay the same, giving you more stability and predictability in your housing costs.

Tax benefits: In India, owning an apartment comes with tax benefits. You can deduct the interest paid on your home loan from your taxable income, which can help you save money on taxes.

Sense of ownership: Owning an apartment gives you a sense of pride and ownership that you don't get when you rent. You can make it your own, and you have a stake in the community where you live. You do not need to seek permission from anyone to make any kind of changes or even straight up renovate the place.

Drawbacks of Buying an Apartment in India

Higher upfront costs: Buying an apartment in India requires a significant upfront investment, including a down payment and closing costs. This can make it difficult for some people to get onto the property ladder. Many individuals fall into the trap of owning a home by simply thinking of the rent amount they’d have to pay every month. But one should be vary of the additional maintenance cost along with the risk of converting your liquid assets into a less liquid state and tying yourself down.

Maintenance costs: When you own an apartment, you are responsible for all maintenance and repair costs. This can be expensive and time-consuming, especially if there are major issues that need to be addressed.

Limited flexibility: When you invest in owning an apartment, it can be very difficult to move if your circumstances change. Selling a property can be a lengthy process, and you may not be able to get as much money as you paid for it. Not to mention finding the right buyer who will adhere to the smooth buying/selling process you’d expect. 

Risk of depreciation: While property values generally appreciate over time, there is always a risk that your apartment could lose value due to various reasons such as the build quality and the neighborhood to name a couple.  

Limited Space

One of the biggest disadvantages of buying an apartment in India is the limited space. In most cases, apartments are smaller compared to independent houses. This means you will have limited space to store your belongings, and you may also find it difficult to accommodate guests. Additionally, after a few years if you wish to have a bigger family or have to accommodate your aging parents, moving to a bigger and spacious place will become a task. You will need to find the right tenants for this place or you need to sell this apartment before you invest in a different property.

Limited Control

When you buy an apartment in India, you will have limited control over the building and its surroundings. For example, you may not be able to make changes to the exterior of the building or the common areas. This can be a disadvantage for those who want to personalize their living space and make it their own.

Resale Value

Finally, apartments may not have the same resale value as independent houses. This is because there are so many apartments available, which can make it challenging to sell your apartment for a good price. Additionally, apartments in older buildings may also have lower resale value compared to newer buildings even though they are located side by side.

Conclusion

While buying an apartment seems like a good use of the same money you pay as rent one must think much more in depth on the floors and cons of buying versus renting apartments in India. but if your financial situation a love you to come roots in the community, Apartment is a good choice whether it is for personal residence or as an investment especially if you have picked a good locality which of this lifestyle and livelihood opportunities in abundance. Whether you chose to buy or rent, make sure to opt for a reputed builder and a good neighborhood.