Trying to unravel the complicated concept of comparing property cost to rental value?
Indeed, it is a crucial aspect to think about at any stage in life.
There are pros and cons of both, and considering the pre-eminent aspects of your life, you take a decision.
Will it be fine if, under the spell of a perfect investment, you invest in a property and then burden yourself with EMIs for another decade?
Or, are you planning to live a life where you still stumble while writing a permanent address in your documents?
There are a million ways to get over both, however, the best choice is made after proper consideration and comprehension!
More than a professional guide, you need an hour to investigate on your own.
Making it easier for you with this post;
In the simplest form, we would be discussing here the concept of both renting and purchasing:
For renting the costs include a security deposit and then the monthly charge. However, it is somehow twisted when we speak of purchasing a property.
Let’s take a dig into it.
– Home Loans: The buzzword for the ones who don’t wish to pay in a single go!
Firstly, you need to qualify for the loan i.e your debt to income costs should be less than 50%. That is, the subtotal of your monthly debt payments, loans, taxes, and insurance divided by your monthly take-home income should be less than 50%.
Secondly, your CIBIL scores mustn’t be less than 620 approx. Explaining CIBIL here, it ranges from 300-900. The closer you are to 900, the better your credit score is.
Thirdly: If you are eligible for a loan than you must consider the costs besides the down payment. A bank only pays 80-90% of the total price of the house, then there is 1.5% approximately the tax for land, then you should also be considering the cost of insurance. At least, you must have 20% of your desired home’s cost liquid.
Approximately 50% of your total income would go in monthly EMI.
Rest, you can consult the professionals to guide you in these terms.
Renting would require you to muddle into the hassle of shifting every year, whilst purchasing a home is a one-time investment.
Your home is your safe haven, it can be your investment and asset for a lifetime.
Nevertheless, you need to consider your job’s aspects too.
If you are sure of growth in terms of income, and there is stability, you should rather consider buying a place.
When you’re young, there is no as such family responsibility, and you can always adjust in terms of expenditure.
While, when there is a family, you need to prioritize and think about what would be derailing!
Then, if you are young, there are always chances of switching your location.
these viewpoints are often ignored, but should rather be taken under crucial consideration before deciding on something.
Here are the July trends for rental in Mumbai:
Also, read to understand Why this is the right time to invest in properties?
Rental is cheaper, without-a-doubt!
Is it a wealth asset?
Is it financially making sense to you?
Is it a secure option?
To all, the answer is no!
Property prices, go higher every year. Therefore we can say that this is the lowest it can be, following the demonetization act and the RERA act.
Now, you need to prioritize what is best for you, how your investment affects your future and current goals.
You can always consult professional Real Estate Consultants to have proper guidance, or you can research on your own about current real estate trends.
I would conclude myself by saying that, investing in real estate is never a loss. However, you need to consider, your priorities, financial aspects, and future plans.
At the end of the day, the place you call home will make a difference.
Subscribe, to read our upcoming post about most common mistakes while purchasing a property!