Should Salaried Employees Rent or Buy a Home? Complete Guide

Rent vs EMI: Owning a home is everyone's dream. People struggle their whole lives for it. However, there are many doubts when it comes to buying a house. Let's now explore the doubts, especially when buying a house with a loan. 

The never-ending debate

The rent vs. EMI debate is constant. Paying an EMI means you'll own the house, but it's risky if you lose your job. Rent offers flexibility but it's an endless expense.

What if you lose your job?

Imagine a software engineer earning Rs 1 lakh buys a Rs 60 lakh flat. His EMI is Rs 60,000. If he suddenly loses his job, paying that EMI becomes a huge burden. Renting seems better then.

EMI vs. Rent: Pros and Cons

Paying Rent:

* Less immediate financial burden for low-wage employees.

* No huge loan stress if you lose your job.

* Easy to change locations.

* But, rent increases and you never own the place.

Paying EMI:

* You eventually own the house.

* EMI is fixed, unlike rising rent.

* It's an investment if real estate values go up.

* But, it's a huge burden if your job isn't stable.

The choice depends on your personal situation. If you have job security, an EMI is manageable. If not, renting is safer.

How to plan financially?

Owning a home is a dream, but avoid financial traps. Before getting a loan, assess your finances. Keep at least 6 months of EMI as an emergency fund to cover job loss.

What to do if you have trouble paying the EMI?

Struggling with EMIs? Consider renting out your own home for a higher price and moving to a cheaper rental. This can help cover your EMI. If you lack an emergency fund, renting is safer.

Remember these points too.

Plan for future needs like kids' education and retirement. Buying a home is a long-term investment; check for property appreciation and market stability. Weigh all pros and cons.