In India, urbanization is increasing rapidly. According to a report of global data, ‘ The urbanization rate in India has increased by 1.5% on a year-to-year basis’.
The rural population is moving towards cities in search of work and a better lifestyle. Eventually, it increases in demand for homes.
In a few cities of India, owning a home can cost in crores. Living in a rented house is not considered good in Indian society. Many people dream of purchasing a house whether it costs them all their life savings. See, it is not bad to buy a house but what if it gives you debt for all your lifetime? Owning a house has its own benefits but renting a house also gives a lot of perks to people. This market of giving and taking houses on rent is big and due to digitalization, there are many applications in the market that help to connect the owner to the needy of houses.
This is a very personal decision of someone whether to buy a house or to take a house on rent but here are some differentiators which can help in decision-making.
| Factors to differentiate | Owning a house | Renting a house |
| Sense of security | There is always a sense of security in the mind of the owner that he/she has a permanent place to live which is not going to be affected with the change in income source of the owner. | To live in a rental property has a lack of security. If the source of income from where rent is being paid gets affected so the home can be lost. |
| Maintenance cost | An owner has to pay maintenance costs to repair and renovate the house. If you own a house then it becomes your responsibility to pay all such costs. | In this case, maintenance cost is paid by the owner of the house so the tenant has no responsibility to pay such cost. |
| Distance from job location | Job locations are not fixed and change anytime but a person can’t change his house every time according to job location because it is a long process to buy and sell a house. | A person can change his rent house nearby his job location anytime which will eventually reduce the commute cost and travel time on a daily basis. |
| Installments or rent | Any change in the value of property is not going to affect the tenant. He is free from such headache. | Rent is paid every month to the owner. Rent is decided by the owner on the basis of the demand of that property, location, amenities and size of the house. |
| Down payment | In most of the cases, a person can not pay full payment while buying a home because one can’t afford such an amount of money at a time. People usually buy homes on installments which are paid every month every year. Installments is fixed on the basis of salary or income of the buyer and price of property. | In modern residential societies, there is access to many modern amenities for the residents like pool, bar, gym, playgrounds, parks, parking and high level security. So the people who are concerned about a good lifestyle prefer to live in rented houses in such societies than to live in a house which is on the outskirts and in a low level residential area. |
| Effect of market fluctuation | The rate of property can go up and down due to fluctuation in the real estate market. The decreased or increased worth of a house will directly affect the wealth of the owner. | The payment done in moving a rented house is security money, brokerage and advance rent of one month. This amount is comparatively lesser than the down payment |
| freedom | There is comparatively more freedom in owning a house than renting a house of throwing big parties, playing loud music and living with anyone despite of age and marital status. | Tenants have some limitations which are given by the owner of the house which would be no loud music, no big parties. In some areas, bachelors of different genders are not allowed to live together. |
| customization | A person who owns a house can make any change according to his or her preference in the interior and exterior of the house. | A person is bound to live in a rented house as it is handed over by the owner. He can not make changes in structure or in anything according to his own preference. |
| Tax benefits | At the time of income tax returns, homeowners can get tax benefits by deducting mortgage interest and property taxes. | No tax benefit, a tenant can get by renting a house. |
| Basic amenities | If someone is facing problems living in a owned house, the chances are he will have to adjust there. Because it’s not an easy process to change the house . | It becomes hard to afford a house in such residential areas where there are better amenities and facilities so most of the time in the case of owning a house end up by buying a good in not-so-good residential areas where there is lack of basic amenities and cleanliness. |
| Investment in wealth | No doubt, it is more costlier than renting a house but It is a one-time cost and then a person gets a property that is his own. He can resell it if the value of the house increases. | No matter how much rent you are paying, in the end you get nothing. There is |
| Flexibility in change of house | It is considered good to own a house in india as the owned house can be transferred to the next generation and it can be sold at the time of need of money. | If a tenant does not like the area or the society where he is living, He can easily change his rented house at that time. |
| Social stigma | The people who don’t own a house and live in rented property get problems in recognition and even in marriages. Indian society over-thinks a lot and they think that if this person becomes incapable of paying the rent, he will be homeless. | Homeowners purchase a house sometimes to increase their income source. They give houses on rent. In tier 1 cities, very high rent is charged by tenants. |
| Rent income | The tenants also earn rent income by giving part of the rented house on rent. Usually, people do it to reduce the rent burden. Sometimes it is done to get a company in the scenario when a tenant is living alone like a few people don’t like to live alone. | The tenants also earn rent income by giving part of the rented house on rent. Usually, people do it to reduce the rent burden. Sometimes it is done to get a company in the scenario when a tenant is living alone like few people don’t like to live alone. |
Conclusion
Nowadays, people’s perspective towards everything is changing and they are becoming cooler.
They prefer to live in a better-rented house than their owned house with fewer amenities. So if they can own a good house, they buy it, otherwise, they take the house on rent. One should make these kinds of decisions on the basis of his financial situation, lifestyle, and long-term goals.
