The question of whether to purchase a house or stay in a leased place has always been a debatable thing. The change from being a tenant to a house owner is a complicated one, both financially and emotionally. Investing in a property is no doubt a smart choice; provided you consider the below mentioned factors:
- Owning an apartment is an expensive thing and if you do not have the means to pay for it out-and-out, you will need to opt for a Home Loan. In case you opt for home loans, then it is important to keep in mind that banks tend to give you a loan around 80 to 90% of the cost of the property. This means that the rest 10 to 20% needs to be given by you. Moreover, you will have to ensure that you have sufficient cash to make the down payment.
- Another important factor that you need to consider is the ratio of debt and income. This is basically the number of loans that you have taken in proportion to the income. When taking a loan, most lenders look at this proportion to ensure that you do not default on your debts and loan payments.
- When purchasing a house there are other expenditures to think about such as insurance, property tax, maintenance and annual repairs. You also have to think about which city to buy the house in, the Metros or the Tier II cities like Mohali that will be soon developed as smart cities.
- When you buy a house, keep in mind that you need to give up on flexibility. In case you shift jobs and your new office is at a distant location from where you stay then that can be an issue. Obviously, there are ways to cope with this but it is something to think through when deciding whether to buy a house or rent one. If you can buy a house in the city center, in cities like Mohali you can surely save up on the travel time and easily reach your workplace.
As mentioned above, there are a range of factors that needs to be considered while making the decision to stay on rent or buy a house. Real estate is an ideal asset class to possess and can act as a guard against inflation. But, you should not buy a house just because it is good to own a property. A careful analysis of the above mentioned factors should help you to determine if you can purchase an apartment or buy a villa in Mohali or similar Tier II cities or continue to stay on rent.