Is it better to rent or buy a house in Bangalore?
Buy vs Rent
Everybody dreams to own a house. However, now when the property prices are shooting up ever higher, the question always pops up whether it is better to buy a house or rent one. There have been a flurry of arguments both for and against buying as well as renting a house and you need to consider all the relevant angles before deciding on it.
Many theories have been put forward to help one discern if renting is better than buying a house at a given time or vice versa. One thumb rule says that if rent per annum of the property is within 2 per cent of the property’s worth, then renting may be a better option. However, if you are paying more than that as rent, then it is advisable to go for buying as the equated monthly installment (EMI) payable would be more fruitful than paying a high rent.
Another thumb rule says that you should just multiply your monthly rent by 240. If you can buy a house for less than that, then buying is usually better in the long-term. A house is an asset and the down payment and EMIs will go a long way to create a stable asset for you. No matter how many thumb rules are forwarded or how many indices are developed, it is always advisable to judge your respective situation before deciding.
Few things to keep in mind before buying a house:
- How long do you plan to stay in the place? If your job is transferable then renting may be a better option as it gives you mobility. Usually, it takes almost 5-6 years for a house to break even on a sale.
- The housing market of the city you are planning to buy house. In case of a super expensive housing market, renting may be better option for the time being.
- Financial condition of the household: If the household is comfortably holds surplus cash then it is easier to commit the EMI.
- Investment potential: A residential house or an office property gives returns comparable to debt products. It is necessary to know what you will do with the money that you save by renting instead of buying.
So, how about a house in Bangalore?
Bangalore property market is still stable compared to markets like Mumbai or Delhi, where the prices have shot up astronomically over the years. Hence, it is advisable to invest the rental amount as EMI to buy a house in Bangalore.
However, you need to choose the areas suitable for buying or investing in a house. Bangalore North, Bangalore South, Bangalore East and Bangalore West are advisable for property investment. Especially, Bangalore East and Bangalore North are the prime zones to buy a house as the rental values are shooting up at a higher pace than the property prices.
Bangalore Central remains a neutral zone, where real estate market is relatively expensive and you can decide whether to buy a house in there based on your financial strength.
