Buying vs Renting a House – Which is better?

I live in the city of dreams, Mumbai My flat costs ₹7 Crores but I pay just ₹1.5 Lakhs in rent Buying it on EMI would’ve costed me ₹5 Lakhs p.m. even after paying ₹1.4 Crores in down payment Here’s why I won’t buy a house

[1] Rent is not burnt Rather than buying, if I invest: ₹1.4 Cr of Down-Payment and ₹3.5L (EMI less Rent) p.m say, in Nifty 50 Index Fund which gets me 12% p.a. for next 20 yrs? I’ll have ₹48.13 Cr Even if flat grows at 7% p.a., it’ll be worth ₹27 Cr


[2] Buy a Home after having FIRE score How much money you need to never ever worry about money? Me: ₹6 Crores! At 10% growth I get 60L p.a I need 30L a year to live the dream life and another 30L reinvested to match 5% inflation After 20 yrs, I can have that house + ₹20Cr


[3] Disproportionate Asset Allocation If I buy a house worth ₹7 Crores today, Most of my net worth will be allocated in a flat A flat is generally a laggard in terms of capital appreciation What for? Saving just ~2% per year?


[4] Is it just about the EMIs? Did you forget that buying a house comes with: Registry [4-7%] Brokerage [1-2%] Heavy & recurring repair & maintenance Annual Property Taxes and what not!


[5] More clarity over which city to live Right now, I am in Mumbai because of my work What if I feel like shifting to Goa? Or say, Manali? Buying a house will lock me not just emotionally but financially as well It might make more sense to buy a house in 40s


I appreciate that some of you might have very strong personal reasons to buy a house and I respect that Just that, financially it might make more sense to defer this choice! What’s your opinion now?


Credits: Finance with Sharan



The age-old debate of buying versus renting a house continues to puzzle many prospective homeowners. Both options offer distinct advantages and drawbacks, and the decision ultimately depends on individual circumstances, financial considerations, and lifestyle preferences. Let’s explore the pros and cons of buying and renting to help you make an informed choice about the place you’ll call home.

Buying a House:


  1. Equity Building: Homeownership allows you to build equity over time as you pay down your mortgage. Unlike renting, where monthly payments provide no ownership stake, buying a house enables you to build wealth through property appreciation and mortgage principal reduction.
  2. Stability and Control: Owning a home provides stability and control over your living environment. You have the freedom to personalize your space, make improvements, and establish roots in a community without the uncertainty of lease renewals or landlord restrictions.
  3. Potential Tax Benefits: Homeownership offers potential tax advantages, including deductions for mortgage interest, property taxes, and certain home-related expenses. These tax benefits can help offset the costs of homeownership and reduce your overall tax liability.
  4. Long-Term Investment: Real estate has historically been a solid long-term investment, with properties often appreciating in value over time. Buying a house can serve as a financial asset and a source of retirement savings, providing a sense of security and financial stability for the future.


  1. Financial Commitment: Purchasing a home requires a significant financial commitment upfront, including a down payment, closing costs, and ongoing maintenance expenses. It ties up a considerable portion of your capital and limits liquidity compared to renting.
  2. Maintenance and Repairs: Homeownership comes with the responsibility of maintaining and repairing your property. From routine maintenance tasks to unexpected repairs, homeowners must budget for upkeep costs, which can add up over time and require time and effort to manage.
  3. Market Risk: Real estate markets are subject to fluctuations, and property values can decline due to economic downturns or changes in local market conditions. Buying a house carries inherent market risk, and homeowners may experience financial losses if property values decrease.

Renting a House:


  1. Flexibility and Mobility: Renting offers flexibility and mobility, allowing you to relocate more easily for work or personal reasons without the commitment of homeownership. It provides the freedom to explore different neighborhoods and living arrangements without being tied down to a specific property.
  2. Lower Upfront Costs: Renting typically requires lower upfront costs compared to buying a house. While renters may need to pay security deposits and monthly rent, they avoid the substantial upfront expenses associated with down payments, closing costs, and mortgage fees.
  3. Maintenance-Free Living: Renters are not responsible for property maintenance and repairs, as these tasks are typically handled by the landlord or property management company. Renting offers maintenance-free living, freeing renters from the burden of homeownership responsibilities.


  1. Lack of Equity Building: Unlike homeownership, renting does not provide the opportunity to build equity or ownership stake in the property. Monthly rent payments go towards the landlord’s investment, offering no financial return or wealth-building potential for renters.
  2. Limited Control and Stability: Renting lacks the stability and control of homeownership, as renters are subject to lease terms, rental increases, and potential eviction. Landlords may impose restrictions on pets, renovations, and lease terms, limiting renters’ freedom and autonomy.
  3. No Tax Benefits: Renters do not enjoy the tax benefits associated with homeownership, such as deductions for mortgage interest and property taxes. Rent payments are not tax-deductible, resulting in fewer potential tax savings compared to homeowners.


The decision to buy or rent a house depends on various factors, including financial considerations, lifestyle preferences, and long-term goals. While homeownership offers equity building, stability, and potential tax benefits, it requires a significant financial commitment and ongoing maintenance responsibilities. Renting provides flexibility, lower upfront costs, and maintenance-free living but lacks the wealth-building potential and long-term investment benefits of homeownership.

Ultimately, the right choice depends on your individual circumstances and priorities. Consider your financial situation, future plans, and lifestyle preferences when deciding between buying and renting a house. Whether you choose to buy or rent, make sure to weigh the pros and cons carefully and seek professional advice if needed to make an informed decision about your housing needs.

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