Real estate ownership is seen as an investment to build equity and a medium of tax deductions. But, renting may also have its advantages giving you more flexibility with little responsibility. Moreover, in India, many people believe buying a home is a sound investment compared to renting. This can be attributed to the age-old thought process that being an owner is the key to happiness.
However, in a cosmopolitan city like Bangalore, you have to base your decision on your current situation and plans. If you plan to settle in the city, buying a 3BHK Apartment in Bangalore may be ideal for a bigger family. If you are on a sleeker budget a 2BHK Apartment might be perfect for you. But, if you move around the country for work reasons, spending on monthly rents might be better.
Let’s explore the details of each to help you determine whether renting or owning is your best choice.
- Investment V/s Budgeting
Renting a 2BHK Apartment in Bangalore, may not be financially burdening but buying one can be. It is important to calculate monthly EMI and compare it with a monthly income to get a clear idea if you are ready to invest in a home. For instance, if you have a monthly income of 1 Lakh, your EMI should not exceed over 25% of your salary. You should also consider making timely EMI payments to ensure lower interest rates on your home loan. Also, you should only consider buying an apartment when you can afford at least 20% of the cost of the home as a down payment. If all these factors are in your favor, you may take the step of buying a home. However, if you feel your pockets may be strained by such decisions, renting is the perfect option that will give you the required time window to sort out your finances.
- Convertible V/s Permanent
If you live in a rented apartment in Bangalore, you can easily change your location and relocate to a different city or country. But, buying a home is a permanent investment involving a lot of emotions and creating a space for your family for building memories of a lifetime. Therefore, renting an apartment in Bangalore may be ideal when you are financially not settled. But, once you get through that phase buying a 3BHK apartment in Bangalore is always a better choice.
- Liberty V/s Liability
In a rented apartment, you have to stick to a lot of rules and regulations and would be fully liable for monetary deductions from the security deposit in case of any damage to the property. However, if you own a 2/3 BHK apartment in Bangalore, you can enjoy an entire space to yourself and not be answerable to anyone. Tenancy restricts your flexibility where you need to follow the house instructions dictated by your landlord. On the other hand, ownership makes you take charge of your house and mitigate raised complaints on your own.
- Designing Interiors V/s No Interiors:
When you have your own space you can decorate creatively and give shape to your interiors as you imagined. You are a free bird in your huge 2 or 3 BHK apartment. However, while living in a rented house you cannot plan and design your interiors according to your requirements.
- Tax Benefits in Buying V/s Renting
You can enjoy multiple tax benefits as per Budget 2019. Timely interest payment on home loans qualifies you for a tax benefit of up to 2 lakhs. However, if the stamp value of your property exceeds 45 lakhs, you can enjoy tax benefits up to 3.5 Lakhs. Although you can avail of tax benefits in a rented apartment on the total annual rent amount, it is important to understand you will own no assets at the end of the day, regardless of the number of monthly rent payments you made.
Which option is best for you is about your convenience and comfort, not money. There will be people to tell you owing makes more sense in the long-term and renting is a waste of money. But, such blank statements are useless. If you are planning to settle down and finances allow you to buy a 2/3 BHK Apartment in Bangalore, go ahead with it. If you are in two minds, consider renting. At the end of the day, it is you who should decide what’s best for you.
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