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EMI vs. Rental--What Is The Better Option?

The debate between renting a home and buying one is an ongoing one. Investing in a home is a major financial decision that requires careful deliberation and consistent effort; however, it reaps many benefits. Renting a home, on the other hand, seems like a quick and easy option at the outset but may not seem worthwhile in the long run.

Let’s take a look at the pros and cons of both these choices.

  1. EMI vs. rental amount:One of the most profound arguments in favour of buying a home is that the money you spend every month as your rent can easily be directed towards your EMI instead. This will ensure far greater long-term benefits.

  2. Down payment vs. security deposit:It is advisable to pay off about 15-20% of the property’s value as down payment. This can work out to be significant amount. On the other hand, the security deposit to be made on a rental home is typically up to two months’ rent. If your requirement is immediate and you have limited cash in hand, a rental home might be a better choice for you.

  3. Tax benefits: As a homeowner, you can avail of many tax benefits under various sections of the Income Tax Act. These tax concessions can be availed of against both the principal amount of the home loan as well as against the interest paid.

  4. Scope for appreciation:Investing in a home allows your money to grow over a period of time due to the scope for capital appreciation, which is never the case with a rental home.

  5. Source of income: You can use the home that you own as a steady source of rental income. This income can be useful to you later in life, or even at this point in time to pay off your EMIs.

  6. Maintenance expenses:As a homeowner, you will have to pay for the maintenance and repairs, which is not the case with a rental home. However, this gives you the freedom to maintain and furnish your home according to your own needs and preferences.

  7. Maintenance expenses:As a homeowner, you will have to pay for the maintenance and repairs, which is not the case with a rental home. However, this gives you the freedom to maintain and furnish your home according to your own needs and preferences.
    Without a doubt, investing in a home comes with many long-term benefits like capital appreciation, stability and security, and an additional source of income. However, it is important to assess your current financial flexibility before deciding which way to go.

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