Why Rent Is Better Than Buying In An Overpriced Property Market?
Most of us come face to face with a dilemma when looking for a property in the market. The question – is it better to rent or buy? Many experts say that the property market is overpriced at present and it is wiser to opt for renting than buying. Read on to gain some insight and make a better choice for yourself.
A Global Overview
Reports from markets across the world claim that more than 50 percent of the housing markets were considered and the result that came out shows that renting is much more affordable than buying. These reports are not based on approximations but precise calculations.
Some reports state that that housing prices have gone up since the calculations were made which broadens the gulf. Hence, the whole buy versus rent debate tilts toward renting being the better option.
Why Renting is Gaining the Upper Hand?
Most people buy homes or properties of their interest by taking loans or with a mortgage. But with the rising interest rates, it is only normal to find people not being able to afford houses. Economists have also reported that new tax laws and limits might fuel this situation leaving many people homeless, if not for the option of renting. Evidently, renting gained prominence and buying lost the spotlight.
The Metropolitan Situation
Metropolitan cities across the world were considered to prove the claim that renting a property is better than buying it. It was found that the situation in these cities is such that the home pricing is rising over the years much more than the appreciation in rents. Though it depends on the area, time period, etc. experts say that an average renter will find that he/she is only spending about 30 percent of his/her income.
What About India?
Indian cities like Bangalore which are abuzz with the young generation, thanks to the technological revolution and coming up of startups along with the advancement in the cyber world poses a similar situation. Buying property here is termed as not wise and even foolish and as a result, most of the working population in Bangalore live in rented spaces.
You will find that cities like Bangalore are home to many paying guest (PG) houses who provide the many guests of the city who ventured into the area for work or study purposes with multiple options to choose their living space from. If you want to be a PG in Bangalore, it is quite easy to find many places listed online because of the increasing market paying guest houses have as of now.
Negative Experiences of Buyers
Many Stories, Similar Beginnings
Most of the sad tales buyers narrate have a similar storyline. It all starts with the buyer and his/her family spending a major chunk of their weekends doing the tedious process of house-hunting. It is not easy to find a hood that matches one’s demands at an affordable rate.
The Compromise Period
Gradually, you will start compromising on different aspects of your dream of owning a house. It is said that most people give up on factors like the view after a certain period of time. There are very few people who manage to find their dream place at an affordable rate after weeks of relentless scouring.
The Problem the Loan Poses
Most people end up investing more than they planned to on the house or property whose aspects were forcefully fit into the buyer’s dream. Paying off the loans, therefore, becomes the next big hurdle they come face to face with. But it is true that some people manage to pay off their loans before time after stressful days haunt them a bit.
Life slowly changes as people make advancements in their career or due to some other reason. This makes them want to move and settle in some other place but the property that is bought becomes the problem then. They are pushed into the rush of finding suitable people to let out the property that was bought while they themselves are looking for a home.
Benefits of Renting
One of the major advantages of renting over buying is the constant change that produces very little baggage. You get to explore different locales with different views, people and comfort. You also get to live in many types of interior and exterior environment at a rate that suits your pocket. You need not worry about moving when you have to for work or family purposes as there is no property tying you down to one place.
In addition to that, selling a property is nothing less than a huge ordeal. Therefore it is better to keep the idea of home ownership away unless you feel owning a home is better for you and you are fine with dealing the challenges it poses over time.
How Does Renting Boost Income Stability?
The job market is such that it fluctuates without any prior warnings. You might need to change jobs or companies due to multiple reasons. During such times, paying off loans or a part of your income/savings getting deducted for funds pertaining to home loan EMI can make your financial life more threatening. It is ironical since most people see home ownership as an aspect of stability.
But if you are living on rent, you always have the option of changing your hood or adjusting the contract according to your needs. This actually ensures that you are financially stable even if your income is fluctuating.
All the stats and expert opinions that have come out recently indicate that renting is a much better option than buying for the working generations. As a result, many online platforms have come up to make the process of renting easier and hassle-free.
Renting a house actually supports the idea of stability more than owning one which breaks the argument as home ownership was generally cited as a symbol of stability until now.